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