What Is Cost Per Engagement Advertising?

Engagement is a major factor in gauging the success of a mobile ad campaign. Smart marketers are turning to CPE advertising both as a strategic campaign pricing model and a clever way of fostering user interaction.

Simply put, cost per engagement (or CPE) advertising is a type of marketing in which advertisers only pay when users engage with their campaigns. That means initial impressions are free, but once a user engages in some way, the advertiser incurs a cost. In this pricing model, marketing teams can be sure they’re getting something in return for their ad spend. It’s a low-risk way to ensure that your ad spend is producing results, since there are only two end results, both beneficial in their own ways: a user engages with the ad (mission accomplished!) or doesn’t (you don’t pay).

What counts as engagement?

This question isn’t as easy to answer since engagement can be defined in many ways when it comes to smartphone usage. Broadly, it means that users are interacting with the ad in whatever given way is presented. Some examples include:

  • Taking a survey
  • Reviewing a product
  • Playing a mini-game
  • Sharing content on social media,
  • Pausing a video
  • Signing up for a free trial

It’s up to the advertiser to figure out how they want users to engage with their ads and set that definition. There is one thing that all CPE advertisers generally agree on, though–the engagement must be the result of some high-quality action. That might mean significant interaction time between user and ad, which makes it more likely that the product advertised will be remembered. In other situations, the campaign might lead the user right to a product or service that’s specifically relevant to their interests. So while engagement can come in a variety of forms, it has to be meaningful in order to be considered successful.

How is CPE advertising different from other pricing models?

Cost Per Engagement ad campaigns share some similarities with other kinds of mobile advertising pricing models. For example, CPI (Cost Per Install) and CPV (Cost Per View) campaigns also rely on some kind of response from users in order to be considered successful, and in those cases, again, the advertisers don’t pay until users have completed said response.

CPE advertising is a little different, however. Where Cost Per Install and Cost Per View campaigns are pretty specific about the action that needs to be taken, Cost Per Engagement keeps things more general. This gives advertisers the freedom to define what counts as engagement on their own terms, which also makes it easier to quickly adapt to new advertising trends and mediums.

What are the benefits of Cost Per Engagement advertising?

  • Better budgeting. Cost per engagement campaigns ensure that marketers don’t blow their budget on ads that never gain any traction with their intended audiences. Not only do users need to have some sort of proven interaction with the ad, but that interaction must be something meaningful that directs the user to a targeted result or allows them to spend more time engaging with the product. If customers don’t engage, advertisers don’t pay, leaving more budget free to explore additional tactics or double down on what’s working.
  • Flexible, creative advertising. Using a CPE pricing model allows advertisers to adapt to trends and increase creative output. CPE ads need attention-grabbing visuals and engaging copy, often for several stages of a digital funnel. If a CPE ad is urging the user to vote on something or make a choice, that call to action needs to be strong. The entire process needs to be consistent and compelling.
  • Increased engagement. It’s not enough to get these potential consumers to simply look at ads anymore; with the amount of information people are bombarded with on a daily basis, a static ad might quickly be forgotten. Once a user starts engaging, however, brand awareness goes up, as do the chances of that user reaching whatever the end goal of the ad campaign is, whether that’s buying a product, installing an app, or using a service.

How is Cost Per Engagement calculated?

what is cpe advertising 2
The basic formula for finding CPE is simple. Just divide your total amount spent by the number of measured engagements, and voila: you’ve got your cost per engagement! So for example, if you spent $10,000 for 5,000 engagements, each engagement cost about two dollars.

How are Cost Per Engagement campaigns deployed in mobile games?

CPE campaigns are often delivered to audiences via value-exchange advertising formats like offerwalls. The mobile gaming space is home to some of the most successful CPE campaigns ever run. Here are some ways mobile game devs are getting players to interact:

  • Taking a survey. Online survey data is highly sought after by companies trying to gather market intelligence. A game might offer in-game currency if a user follows a link and completes a quick survey. From the user’s perspective, the short amount of time it takes to answer a few questions is a small price to pay for getting more coins or in-game goodies.
  • Providing an email address. Companies are always looking to gather valid email addresses in order to increase their email marketing reach. A game ad might nudge the player towards providing an email address to the advertiser via an easy-to-use form in return for some sort of in-game reward.
  • Signing up for a free trial of streaming services. Streaming giants like Hulu and Spotify can advertise their services, gamers can sign up (and input credit card info) in order to get their timed free trial, and once again, the player is rewarded.
  • Downloading a game and reaching a specific milestone. A popular tactic employed by game publishers is to use CPE campaigns that require players not just to download the game, but to reach a specific progression milestone before receiving their reward in the source app.

What all of these examples have in common are that they’re win-win scenarios for advertisers and users. The marketing pros get their meaningful interactions, gamers get to keep playing with increased in-game currency or items, and everyone’s happy on both sides.

Of course, there are plenty of mediums besides mobile games where CPE ads would work well; for example, they’re also rising on social media. Games are just a natural environment for cost per engagement campaigns because they can easily provide players with digital rewards in return for engagement, increasing the odds of interaction.

Is Cost Per Engagement Advertising right for my game/app/product/service?

If you’re wondering whether the time is right to implement your own Cost Per Engagement campaign, ask yourself a few questions:

  • Are you interested in modern, creative forms of interactive advertising?
  • Do you think you can find ways to reward users while meeting your advertising goals?
  • Is your target audience one that uses mediums where CPE ads make the most sense, like mobile games and social media?

If so, CPE ad campaigns could be a great way to push your marketing forward. No method of advertising is foolproof, of course, but knowing you’ll only pay if specified results are achieved certainly lowers the risk factor. And if you need help managing your CPE campaign–or just want more advice from the experts — reach out to the mobile advertising experts at Tapjoy to set up your first CPE campaign!

 

Want to learn more about the world of in-app advertising pricing models? Check out “In-App Advertising Cost – The Complete Marketer’s Guide”.

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