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 looking to grow, many apps opt for CPI campaigns to increase their user base. This has been the standard approach for advertising in mobile apps. CPE provides an alternative way to reach users. For instance, brands can use it to encourage inactive users to return or to prompt users to complete specific actions in the game they are playing, like passing levels or earning badges. Rather than just focusing on installs, CPE aims to create active users—those who are engaged and participating with the app.
CPE Blends Advertising and Marketing
Advertisers who select a CPE method rather than just focusing on installs can center a campaign on a specific action. This allows them to direct ads toward a marketing effort, like joining a contest or checking out a particular web page. Marketers and advertisers can collaborate on CPE ads that contribute to a specific business goal within 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.