What is Cost Per Engagement (CPE)?
Cost Per Engagement, also known as CPE, is a pricing model, wherein app marketers pay publishers when users take specific, predetermined actions inside an app.
Here’s how CPE campaigns work: App marketers choose a post-install event. Their ads are then shown on the partnering publisher’s platform. Users click on said ads. Some of them complete the predetermined actions, others do not. App marketers pay publishers for each user who clicked on their ad and completed the predetermined action only.
It’s important to note that “predetermined actions” can be almost anything, as long as the app marketer and publishing platform agree to it before any ads run. Examples include:
- A user completes an in-app demo
- A user reaches a certain level in a game
- A user registers for an account in the advertisers app
This pricing model is considered low-risk for app marketers because they only incur costs when specific criteria are met. This helps ensure their ad campaigns are successful.
How to Calculate Cost Per Engagement
To calculate cost per engagement figures for your ads, simply divide your advertising costs for a specific marketing campaign by the number of engagements said campaign generated.
Here’s the formula: Advertising Costs / Number of Engagements = CPE
Many app marketers wonder, “What’s the ideal CPE for my app?” The answer to that question depends on a host of factors, such as who your target audience is and how much each user is worth to your company. In general, aim for a CPE that allows your brand to remain profitable.