Solved: Lowering Facebook Lead Ad Costs Effectively

Hi there,

Thanks for reaching out about your Facebook Ads campaign. I'm happy to give you some initial thoughts on your situation.

You're asking if a $2 cost per lead is normal and how to get it lower. The short answer is, it's not a simple yes or no. A $2 lead could be fantastic, or it could be a complete waste of money. It all comes down to the quality of that lead and whether they eventually become a paying customer. Chasing the lowest possible cost per lead is one of the most common traps people fall into, and it almost always leads to burning cash on people who will never buy from you.

Let's unpack this properly. We need to shift your perspective from "how cheap can I get a lead?" to "how much can I afford to pay for a *good* lead that turns into a profitable customer?". That's the only question that actually matters.

Is $2 a "Normal" Cost Per Lead? Let's Reframe the Question...

The first thing to get your head around is that the cost per lead, in isolation, tells you almost nothing. I remember one campaign we worked on for a B2B software client where we were happy to pay $22 for a single lead from LinkedIn, and other campaigns where we've generated thousands of signups for a consumer app at under £2 each. Were both campaigns successful? Yes, because the value of the customer in each case was vastly different.

A $2 lead who downloaded your free content, never opens an email, and certainly never buys your product is infinitely more expensive than a $50 lead who reads all your material, books a call, and becomes a £10,000 client. The cheap lead cost you $2. The expensive lead made you a huge profit. Which would you rather have?

This is why you have to stop focusing on the upfront cost and start thinking about the entire journey. Your ideal customer isn't just a demographic like "women aged 25-40". Your ideal customer has a specific, urgent, and expensive problem—a nightmare that keeps them up at night. Your downloadable content needs to be the first step towards solving that nightmare. When you target people based on their *pain*, not thier demographics, you get much higher quality leads. They might cost a bit more to acquire, but they are far more likely to convert, making your overall acquisition cost much lower in the long run.

The real question isn't "Is $2 normal?". The real question is, "Based on my business's numbers, what is a profitable and sustainable cost per lead for me?". To answer that, you need to do a bit of maths.

You'll need to calculate what you can actually afford to pay

Before you spend another penny on ads, you need to know the single most important metric in your business: your Customer Lifetime Value (LTV). This number tells you the total profit you can expect to make from a single customer over the entire time they do business with you. Once you know this, you can work backwards to figure out how much you can afford to spend to get that customer (your Customer Acquisition Cost, or CAC) and, from there, how much you can afford for a lead.

It sounds complicated, but the calculation is straightforward. You just need three numbers:

1. Average Revenue Per Account (ARPA): How much revenue does an average customer bring in each month?
2. Gross Margin %: What percentage of that revenue is actual profit, after you've paid for the cost of goods or services?
3. Monthly Churn Rate %: What percentage of your customers do you lose each month?

The formula is: LTV = (ARPA * Gross Margin %) / Monthly Churn Rate

Let's say your product costs £100 a month (ARPA), your gross margin is 70%, and you lose 5% of your customers each month. Your LTV would be (£100 * 0.70) / 0.05 = £1,400.

A healthy business model often aims for an LTV to CAC ratio of at least 3:1. This means you can afford to spend up to £1,400 / 3 = ~£466 to acquire a single customer. If you know that, on average, 1 in every 20 leads becomes a customer (a 5% lead-to-customer rate), then you can afford to pay up to £466 / 20 = £23.30 per lead.

Suddenly, your $2 CPL looks incredibly cheap. Maybe too cheap, which often signals a problem with lead quality. Use the calculator below to plug in your own numbers and see what a realistic lead cost looks like for your business.

I'd say you shouldn't ever use a Traffic campaign for leads

Now, let's address your last question directly: "would doing a traffic campaign to send people to a landing page with an opt in box be cheaper?"

The answer is an unequivocal, absolute NO. This is probably the single most costly mistake beginners make, and it stems from a misunderstanding of how the Facebook algorithm actually works.

When you set your campaign objective, you are giving a very precise command to an incredibly powerful machine.

• If you choose "Traffic," you are telling Facebook: "Please go and find the people in my target audience who are most likely to click on links. I don't care if they read the page, I don't care if they sign up, I just want cheap clicks." Facebook's algorithm is brilliant at this. It will find all the serial clickers, the people who mindlessly tap on anything shiny, and it will serve them your ad because their attention is cheap. You will get a lot of clicks and a very low cost per click, feel great about it for a day, and then wonder why not a single one of them signed up.


• If you choose "Leads" or "Conversions" (optimising for a lead event on your website), you are telling Facebook: "Please go and find the people in my target audience who, based on their past behaviour, are most likely to actually fill out a form and give me their contact details." This is a completely different instruction. The algorithm will now ignore the cheap-and-easy clickers and instead focus on users who have a history of converting. Your cost per click will almost certainly be higher, but your cost per *lead* will be dramatically lower because the traffic is infinitely more qualified.

Think of it this way: awareness is a byproduct of effective conversion advertising, not a prerequisite for it. You don't need to "warm up" a cold audience with cheap traffic. You need to hit them with a compelling offer that solves a real problem, using an objective that's aligned with your actual goal. You are paying Facebook to find customers, not window shoppers.

So, how do we get your *effective* CPL down?

Now that we've established that you need to know your numbers and use the right campaign objective, we can talk about genuine optimisation. Lowering your cost per *quality* lead isn't about finding cheap tricks; it's about systematically improving every part of your advertising funnel. This generally comes down to three core pillars: your targeting, your message, and your offer.

You'll need to look at your audience targeting...

Since you're targeting a cold audience, this is likely the area with the most room for improvment. A lot of people just throw a few broad interests into the targeting and hope for the best. That's a recipe for failure. You need to be far more strategic.

For a new account, you should start by testing detailed targeting based on interests and behaviours. But the secret is to choose interests that are as specific as possible to your ideal customer. Think about what niche things only your target audience would be interested in. For example, if you're selling a tool for Shopify store owners, targeting the interest "Business" is useless. It's far too broad. Targeting "Shopify" is better. But targeting interests like "Shopify Plus", "Ezra Firestone", or specific Shopify apps that your customers use is even better. You're looking for interests that act as a strong filter for your buyer persona.

I usually structure my testing by grouping related interests into themes. You'd have one ad set for competitor software interests, another for industry influencer interests, another for related tool interests, and so on. This lets you see which 'angle' resonates most. After a few days, you can clearly see which ad sets are bringing in leads at your target CPL and which aren't. Turn off the losers, and scale the winners. One campaign we worked on for a B2B software client used this exact method to get registrations for as low as $2.38 each on Meta, which is exceptional for B2B.

Once you have enough data (at least 100 conversions, but ideally more), you can start creating Lookalike audiences from your best leads or customers, and retargeting website visitors. These audiences almost always outperform cold interest targeting, but you need to feed the machine with good data first.

I'd say you need a message they can't ignore...

Your ad copy and creative are the next lever. Your ad's only job is to stop the scroll and get the right person to click. It does that by speaking directly to their problem. No one cares about your product's features; they care about their own problems. Your ad must reflect that.

A powerful framework for this is Problem-Agitate-Solve (PAS).

• Problem: Call out the specific pain point they're experiencing right now. Use their language. (e.g., "Struggling to get your new products noticed?")
• Agitate: Pour a little salt in the wound. Describe the consequences and frustrations of that problem. (e.g., "Are you spending hours creating amazing things, only for them to get buried by the algorithm, leaving you with zero sales?")
• Solve: Introduce your free download as the simple, immediate first step to relief. (e.g., "Our free 'E-commerce Launch Checklist' reveals the 5 simple steps to guarantee visibility for your next product drop. Download it now and stop creating in the dark.")

This structure works because it creates an emotional connection. You're not just offering "informational content"; you're offering a solution to a real, frustrating problem. That's a far more compelling reason to hand over an email address.

You probably should improve your offer...

Finally, and most importantly, is the offer itself—your free downloadable content. This is the value exchange. You're asking for their contact information, which is valuable. In return, you must provide something of even greater value for free. If your lead magnet is a generic, low-effort PDF, you'll get low-quality leads. If it's a high-value tool, a unique template, or a guide that delivers an immediate "aha!" moment, your conversion rates will soar, and the quality of your leads will be much higher.

Think about it: is your free content something they can easily find with a quick Google search? If so, it's not a strong enough offer. It needs to be unique, valuable, and solve a small part of their big problem instantly. This not only gets you the lead but also perfectly positions you as an expert and builds trust, making the eventual sale much easier.

This is where you also need to decide between using Facebook's native Lead Forms or sending people to a landing page.

• Facebook Lead Forms: These are very low friction. The form pre-fills with the user's Facebook data, and they can submit it in two taps without ever leaving the app. This usually results in a lower CPL. However, because it's so easy, the intent can be lower, leading to lower lead quality.
• Landing Page: This adds friction. The user has to click away from Facebook, wait for your page to load, and then manually type in their details. This extra effort acts as a filter. People who can't be bothered won't convert, which is a good thing. This usually means a higher CPL but also significantly higher lead quality.

There's no single right answer; you have to test what works for your business. Start with a Lead Form campaign for speed and cost-effectiveness, and run a separate Conversion campaign pointing to a landing page at the same time. After a week or two, you can compare not just the CPL, but the *quality* of the leads from each.

What should you actually expect to pay?

So, back to your original question about cost. Based on our experience across hundreds of campaigns, the cost for a lead or signup can vary wildly. The below table gives you a rough idea based on the type of country you're targeting. These are just ballpark figures, but they provide some much-needed context.

As you can see, for leads in developed countries, your $2 CPL (which is about £1.60) is right at the absolute bottom of the expected range. This is a massive red flag to me. It strongly suggests that while the cost is low, the quality is likely even lower. You are almost certainly reaching an audience that is very easy and cheap to convert but has no intention of ever buying from you. My advice would be to focus on the optimisation strategies I've outlined above. Your CPL will probably go *up*, but the number of actual customers you get from your ad spend should increase dramatically.

This is the main advice I have for you:

To pull all of this together, here are the actionable steps I would recommend you take. This isn't about finding one magic bullet, but about building a solid, scalable system for acquiring customers profitably.

I know this is a lot to take in. Moving from a simple "what's a good CPL?" mindset to a full-funnel, data-driven approach is a big step. It involves understanding your business economics, customer psychology, and the technical nuances of the advertising platform. Getting all these pieces to work together seamlessly is what separates campaigns that burn money from those that build empires.

This is where professional experience can make a massive difference. An expert can help you quickly identify the biggest opportunities in your strategy, avoid costly mistakes (like running that traffic campaign), and implement a testing framework that gets you to profitability much faster.

If you'd like to go over your specific campaign and strategy in more detail, we offer a completely free, no-obligation initial consultation. We can take a look at your account together and give you some more tailored advice on what your next steps should be. Feel free to book a time that works for you.

Regards,

Team @ Lukas Holschuh