What is price-per-probability?
Price-per-Probability is a lead buying principle: pay for each lead in proportion to its predicted probability of converting, rather than paying one flat price for every lead from a given source.
Most lead buying is priced by category. A Medicare Advantage lead from a given vendor costs a fixed amount regardless of whether that specific lead is likely to enroll. Because conversion rates within a single source vary enormously, a flat price systematically overpays for weak leads and underpays for strong ones.
Price-per-Probability treats the predicted conversion probability as the thing being purchased. If one lead is several times more likely to convert than another, it is worth several times more, and the bid should reflect that. The practical effect is that budget moves toward leads that convert instead of being spread evenly across everything on offer.
This requires two things to work: a scoring model accurate enough that the probability estimates are meaningful, and a bidding mechanism capable of acting on them in real time. Without both, the principle is just a description of what buyers wish they could do.
Note on terminology: in prediction markets and sports betting, contract prices are often read as implied probabilities — a contract trading at $0.20 implies a 20% chance. That is a different concept that happens to use similar language. Price-per-Probability as used here refers to lead acquisition pricing, not to market-implied odds.
How RiskLync uses this term: Price-per-Probability is the principle RiskLync's bidding approach is built around.
Related terms
- Pre-bid lead scoring — Pre-bid lead scoring is the practice of predicting how likely an insurance lead is to convert before paying for it, using only the limited data available at the ping stage of a real-time auction.
- Conversion propensity — Conversion propensity is a model's estimate of how likely a specific lead is to result in a completed sale or enrollment, usually expressed as a probability or a score derived from one.
- Decile lift — Decile lift compares how often leads in the best-scoring tenth of a population convert versus the worst-scoring tenth. A lift of 10x means the top decile converts ten times as often as the bottom.