Expert answer / 24
Why is our cost per lead going up in Australia in 2027?
Short answer
Cost per lead often rises when more advertisers compete for the same high-intent searches. AI is answering some early research questions, leaving fewer clicks to compete for. A landing page that converts poorly or ads with weak Quality Scores can push the cost higher still.
What helps protect your cost per lead?
Focus your budget on the searches most likely to bring in valuable customers, and make it easier for those visitors to convert.
- Tighten your keyword and audience targeting.
- Improve the conversion rate of your landing pages.
- Make ads more relevant to the searches they appear for.
- Regularly remove spend that isn’t producing results.
Why can this outperform heavy discounting?
Putting more money into a campaign without fixing its conversion problems can mean paying more for the same number of leads—or fewer. A better offer and landing page can help hold the cost down even as auction prices rise.
- Auction pressure: More advertisers are competing for commercial searches.
- Tracking accuracy: Missing data can make cost per lead look worse than it is.
- Landing page performance: Even a small drop in conversion rate can push lead costs up.
How do I bring cost per lead down?
- Calculate cost per lead and cost per sale for each campaign.
- Find expensive keywords that rarely convert.
- Improve the landing pages those searches lead to.
- Raise bids only on terms that already convert profitably.
- Review search terms weekly and add negative keywords to cut wasted spend.
Factors to consider by type of business
- Online and ecommerce
- Keep product feeds accurate and protect margins as Shopping competition grows.
- Local services and trades
- Emergency searches may stay expensive. Non-urgent terms need strong conversion rates to make financial sense.
- Hospitality
- Seasonal demand can push costs up quickly. Booking-focused pages help make each click count.
- Professional services and B2B
- A lead may look expensive when the sales cycle is long, even if its lifetime value makes it worthwhile.
Other considerations that affect results
- Auction pressure
- More advertisers can concentrate competition on commercial searches.
- Tracking accuracy
- Incomplete tracking can distort reported cost per lead.
- Landing page performance
- A small decline in conversion rate can substantially increase lead costs.