What is (CPE) Cost per Engagement?

What is (CPE) Cost per Engagement?

June 6, 2024
Cost per Engagement (CPE) is an online advertisement model where you only pay for when a user engage with your ads. Unlike CPC/PPC, where clicking on the ad is considered as an engagement, in CPE it goes beyond that. Any type of interactions such as clicks, likes, video views, shares, and comments, etc. are considered as an engagement. This help you get more meaningful user interaction, providing you the information to accurately assess the performance of your ads.

If you compare it with PPPC (Pay-per-Click) or CPM (Cost-per-Mille), CPE ads are a low-risk option to ensure you get something in return. Now, some might say, how is it better than PPC, when in both the models, advertisers need to pay when the user engages with the ad. Well, the answer is “Quality Engagement”.

In PPC, the user might click on the ad, and just leave. However, in CPE, you can define what you constitute as a meaningful interactions.

Actions that Can Be Defined as Meaningful Interactions in CPE

Likes: When a user likes your ad or post, indicating a positive reception.
Shares: When a user shares your ad or post with their own network, increasing its reach.
Comments: When a user leaves a comment on your ad or post, showing a higher level of engagement.
Clicks on Interactive Elements: This could include clicking on a “Learn More” button, filling out a form, or interacting with embedded elements like polls or quizzes.
Video Views: Specifically, watching a video for a certain duration (e.g., 10 seconds, 30 seconds, or the entire video).
Downloads: When a user downloads a resource from the ad, such as a whitepaper, brochure, or app.
Sign-Ups: Completing a sign-up form or subscribing to a newsletter directly from the ad.

Add to Cart: Adding a product to the shopping cart from an ad in an e-commerce setting.

What are the Benefits of CPE Advertising?

Advertiser Sets Engagement Metrics: In a CPE campaign, the advertiser defines the specific types of user engagements they value and want to pay for. Engagements can include actions such as likes, shares, comments, video views, clicks on interactive elements, or other predefined interactions with the ad content.

Ad Display and User Interactions: The ad is displayed to users across relevant platforms or channels, such as social media feeds, websites, search engine results pages (SERPs), or mobile apps. Users have the opportunity to engage with the ad by taking specific actions determined by the advertiser.

User Engagements Are Tracked: The advertising platform tracks user engagements with the ad content based on the predefined metrics set by the advertiser. This includes recording likes, shares, comments, clicks, video views, or other interactions as they occur in real-time.

Advertiser Pays for Engagements: With CPE, advertisers only pay when users actively engage with their ad content by taking the specified actions. The cost per engagement is predetermined and agreed upon between the advertiser and the advertising platform or publisher.

Engagement Metrics Are Measured: The advertising platform provides detailed reporting and analytics on the performance of the CPE campaign, including the number of engagements, engagement rates, engagement types, and other relevant metrics. Advertisers can monitor campaign performance and optimize based on the results.

How CPE is Calculated?

Cost per engagement is calculated by dividing the total cost spent by the total measured engagements. Therefore:

CPE = total cost spent / total measured engagements

When to Use Cost per Engagement (CPE) Paid Marketing Model?

Brand Awareness Campaigns
It helps Increasing brand visibility and recognition. You can set your ads encouraging users to interact with the brand through likes, shares, and comments, thereby spreading brand messages organically through user engagement. On top of that, you only pay when a user interacts the ad the way you wanted.

Social Media Marketing
CPE is pretty effective in boosting engagement on social media platforms. Since, social media algorithms often favor posts with high engagement, paying for interactions can increase the post’s visibility and reach.

Content Marketing
Content markers can promote their blogposts, articles, videos, etc. through CPE, and pay only when users engage with it, such as sharing, and commenting. This leads to higher content visibility and more organic traffic, driving additional user interest and interaction.

Event Promotions
CPE can be helpful in generate buzz and awareness around events, webinars, or product launches. Engaging users with event-related content (e.g., liking or sharing an event post) can help in spreading the word and increasing attendance.

Product Launches and Announcements
If you are going to launch new products or services, then CPE can help in gaining impression, as well as maximizing its reach through shares. The good news is that, you only pay for the shares by defining it as an engagement in your ad setting. Plus, you can also define likes as an engagement if you want to track how many people are interested in your products/services.

Customer Feedback and Surveys
Whether you are a consumer goods company or any organization looking for measurable data to deliver the best customer experience and services, then CPE could be of real help. You can use this ad model to gather user opinions and feedbacks to understand your customers’ needs. Through accumulating necessary information, you can improve your offerings, as well as build a stronger relationship with your audience.

Influencer Marketing
If you want to delve into influencer marketing, then choosing CPE is one of the best way. This is because, you can check the effectiveness of your influencer marketing through measuring actions like likes, shares, and comments.

An influencer with a high CPE may still be effective if you receive meaningful interactions for each post. For example, Influencer A has 5M followers, generating 3 million impressions and an average of 150k engagements (likes, shares, and comments) for each post. In such cases, they may charge a high CPE, or perhaps not—it depends on what you are getting in return. With CPE, you can track this effectively.

Monitoring CPE over time aids in optimizing future campaigns by identifying top-performing influencers and content strategies. In essence, CPE validates influencer partnerships, boosts brand credibility, and guides campaign optimization.

Lead Generation
CPE helps you collect leads through interactive ads that require user actions. Paying for meaningful interactions ensures that leads are more qualified and interested, potentially increasing conversion rates.

Tips and Tricks to Encourage Users to Engage With Your Ads

Encouraging users to engage with your ads is crucial for maximizing their effectiveness and achieving your marketing goals.

Here are some tips and tricks to boost ad engagement:

Compelling Visuals: Use eye-catching images, videos, and graphics that grab users’ attention and convey your message effectively. High-quality visuals can make your ads more appealing and encourage users to engage with them.

Clear Call to Action (CTA): Include a clear and compelling CTA that prompts users to take action, whether it’s to learn more, shop now, sign up, or download. Make the CTA stand out visually and use persuasive language to encourage clicks.

Personalization: Tailor your ads to the preferences and interests of your target audience. Use demographic, behavioral, and contextual targeting to deliver personalized ads that resonate with users and drive engagement.

Interactive Elements: Incorporate interactive elements such as quizzes, polls, games, or interactive videos to make your ads more engaging and immersive. Interactive content encourages active participation and keeps users entertained.

Offer Incentives: Provide incentives or rewards for engaging with your ads, such as discounts, coupons, freebies, or exclusive offers. Incentives can motivate users to take action and increase ad engagement.

Social Proof: Highlight social proof such as customer reviews, testimonials, or user-generated content to build trust and credibility. Positive feedback from satisfied customers can persuade users to engage with your ads and take the desired action.

Limited-Time Offers: Create a sense of urgency by including limited-time offers or promotions in your ads. Limited-time deals or flash sales can prompt users to act quickly and engage with your ads before the offer expires.

Undoubtedly CPE is a great digital ad pricing model for advertisers seeking for impressions, and interactions at a limited budget, but there are cases where alternate pricing models can be a feasible solution. Do check out our other posts to learn more on different pricing models like CPC (Cost Per Click), CPA (Cost Per Action), CPM (Cost Per Mille), CPI (Cost Per Install), CPV (Cost Per View), flat rate, CPL (Cost Per Lead), CPS (Cost Per Sale), and more.