What is cost per engagement? Cost per engagement (CPE) is a pricing model where advertisers pay for user engagement with an ad, such as clicks, shares, likes, or comments. It’s commonly used in social media and content marketing, but can also measure down-funnel actions (e.g., level completions, purchases, etc.) for mobile user acquisition campaigns.

How does cost per engagement work? Measuring how much it costs for people to interact with an ad or works especially well on social media, where users are often more directly engaged with the sharable nature of the content on those platforms. 

Types of cost per engagement:

• Target CPE: This is the maximum amount an advertiser is willing to pay for an engagement.
• Actual CPE: This is the average amount an advertiser pays for an engagement.

How to measure cost per engagement: CPE is calculated by dividing the total cost of a campaign by the number of engagements generated. For example, if a campaign costs $10,000 and generates 1,000 engagements, the CPE would be $10.

Why is cost per engagement important to marketers? In the “attention economy,” where a click or impression is not quite enough to satisfy performance goals, CPE is valuable because it outlines the greater levels of interactivity that brands want to have with their audiences. After all, actions are most effective at converting users into customers.

Who needs to know what cost per engagement is:

• Digital marketing manager
• Paid search specialist
• Social media manager
• Content marketing manager
• Affiliate manager
• E-commerce manager
• Product manager
• Marketing analyst
• Brand manager

Use cost per engagement in a sentence: “As opposed to a metric like Cost Per Click, I’m sure there are no ‘fat fingers’ problems of mistaken actions that are counted in a CPE campaign, since we know when someone is actively paying attention to the ad and its surroundings.”