There’s no doubt that the metrics used in Digital Advertising can often become slightly confusing for users. We have complicated things for ourselves over recent years, and have seen ourselves shift from only using standard pricing models. Although, we still do rely on these models, we’ve now delved into new realms and one of the newest emerging metrics appearing is Cost Per Engagement (CPE). CPE works slightly different to other traditional models. For example, with metrics such as CPC, you pay only if the customer clicks or with for example, or with CPI, you only pay when the user installs an App. Both of these models are easily measurable and reliable.
With CPE however, advertisers themselves specify a metric within their app and only pay when the user has completed said action. That is to say, the advertiser will pay only when a user engages with an ad unit. An engagement is an umbrella term referring to any interaction with an ad.
So, what can be determined as engagement?
- When the user hovers over the ad and the whole ad unit opens up displaying the creative
- If the ad is in the form of a poll, engagement occurs when the user takes the poll
- Online games in the form of an ad
- When users reach a certain level in a game
- And many, many more.
CPE is based on the idea that only more committed users and impressions are truly worth it. With CPE, advertisers only have to pay for an impression if it involves a particular form of “engagement,” not just clicking on the ad. At the end of the day, what a game app developer wants to see is engagement with their ad and CPE ensures this. The user receives their reward after having engaged with the app- they’ve been playing the game for a while, they’ve signed up to various products within the app, they’ve reached a certain level – they’ve seen what’s on offer and are likely to keep on using it. Therefore, CPE helps increase retention rates, LTV, and increase ROI – ultimately what every developer is looking for.
What makes CPE rather enticing is that it enables more transparency between the user and the advertiser and thoroughly helps in reaching the KPI objectives of a certain campaign.
KPIs you said?
That’s right, CPE helps smash KPIs. CPE campaigns are based on setting KPIs that go past the point of install. (Check out our previous post on KPIs in CPI campaigns for a more in-depth explanation of how they work.) In your campaigns, you’ll want the user to go that one step further within the app and you should set out KPIs as something like completing a certain level of a game. That way, you’re more likely to keep hold of and create high quality users.
With CPE, you’re able to track the user from when they convert and download until they properly engage. However, you should go one step further. For example, if your campaign KPI was to reach level 2 of your app, using tracking and optimization tools, you can set another KPI at a later stage, say level 5, and analyze how this KPI reveals other, more important actions, such us making in-app purchases, obtaining premium items, etc. With this information, it’s much easier to optimize your traffic sources and see the way your campaign is panning out, and ultimately, detect the best users for your App.
So, what KPIs are hit with CPE? As mentioned above, LTV improves. A user who takes the time to complete a registration or get to a certain level is more likely to have a higher LTV than a user who installs and never bothers to use the App again. Sp, too does the ROI. Most advertisers are willing to pay out higher CPEs because those users who have completed X amount of actions or reached a certain level are more likely to continue using the App and therefore, they boost the ROI. CPE in general allows advertisers to stipulate clear-cut KPIs, thus making campaigns more attainable and achievable.
In short, CPE could be the perfect model for those looking to captivate on high-quality users. At mobusi, we offer the possibility of using CPE in our campaigns, along with most other important metrics – that’s what makes us stand out from the rest, we offer all options, cover all bases, reaching advertisers goals. Interested in working with us or becoming one of our extremely satisfied partners? Contact Us!