Cost Per Engagement

What is cost per engagement (CPE)?

Cost Per Engagement (CPE) refers to the amount an advertiser pays each time a user interacts with an ad. This could mean actions such as likes, comments, shares or clicks and it's a model that helps measure the effectiveness of ad campaigns in engaging users. 

It’s a performance-based advertising model where advertisers only pay when users interact with their campaigns. Initial impressions are free, but charges are incurred when a user engages with the advertisement. The goal is to drive targeted and profitable user behaviors within an app or on a social media platform. 

To calculate CPE, use the formula: 

CPE = Total advertising costTotal engagementsTotal advertisin⁡g cos⁡tTotal engagements

Key benefits of cost per engagement:

• Focused spending: Advertisers pay only for actual interactions, ensuring budget is spent on engaging users rather than just views.  
• Effective campaigns: It also provides clear, measurable data on the effectiveness of advertising campaigns. 
• Enhanced ROI: CPE campaigns can provide better return on investment (ROI) and return on ad spend (ROAS) compared to other models by targeting and paying for genuine user engagement. 
• Improved user interaction: Engaging advertisements encourage users to interact more, leading to better customer retention and loyalty. 

Now that you understand the definition of cost per engagement, let’s jump into how to improve your cost per engagement on social media. 

How to improve cost per engagement on social media

• Segment your audience to create engaging and visually appealing ads that resonate with your target audience. 
• Position your ads where your audience is most active to increase visibility and engagement. 
• Offer incentives like discounts, rewards or exclusive content to motivate users to engage with your ads.