Cost-Per-Engagement? How Digital Advertising Models are Changing

March 21, 2016

When it comes to running digital ads, the vocabulary can be incredibly confusing. Years ago this world was simple: You ran ads by cost-per-click or cost-per-impression. Now pricing options are different depending on the end goal of the ad. And then there are also ads for mobile.


When it comes to mobile ads, what has been somewhat dominating the scene is pricing by cost-per-install (CPI). But now many advertisers are looking at cost-per-engagement (CPE) as an alternative.


Why CPE is Becoming a Viable Option


When trying to scale, most apps choose CPI campaigns in an effort to ramp up users. This has been the traditional method advertising in mobile apps. CPE offers a different way to target users. For example, brands could use this to get inactive users to become active again or for a user to complete a certain action in the game they are playing (passing levels or achieving badges). Instead of an install, CPE creates an active user – a user that is involved and engaging with the app.


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CPE Blends Advertising and Marketing


Advertisers that chose a CPE method instead of an install can rally a campaign around a certain action. What this can do is focus ads around a marketing initiative such as entering a contest or visiting a certain web page. Marketers and advertisers have the opportunity to work together on CPE ads that add value to a certain business initiative in the company.


And this goes for mobile and web as well. While CPE is gaining traction in the mobile landscape, brands can use CPE ads outside of this realm as well. This type of ad is creating an experience for the user, rather than just a click. It allows a company to create an experience and encourage the user to partake in it.


Downside of CPE


The biggest downside of a CPE campaign is that the “engagement” must lead the sales, and that can be harder to track. With CPI ads, it’s easy for brands to find the correlation between installs and sales, but when asking a user to engage, it can be harder to find the monetary value. And with all ads, there needs to be a high ROI.

Brands need to think carefully about the engagement they want to happen and make sure it will in fact increase sales – maybe not directly but at least indirectly. Brands will also need to make sure that the experience (or engagement aspect) leaves a mark on the user – that they don’t complete the action and move on but rather continue to engage with the brand. This will take the marketing and advertising teams working together to find the best way forward.

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