What Is CPE?

Date First Published: 21st November 2022

Topic: Web Design & Development

Subtopic: Web Advertising

Article Type: Computer Terms & Definitions

Difficulty Level: 6/10

Learn more about what CPE is in this article.

Stands for cost per engagement. CPE represents the amount of money that an advertiser has to pay to a publisher each time a viewer actively engages with an ad, such as taking a survey, clicking through it, submitting contact details, playing a video, clicking on the like button, playing a minigame, or sharing a post on social media. In this advertising payment method, the advertiser is not charged if a user sees an ad on a page and ignores it and doesn't engage with it at all.

CPE is a combination of a CPC and CPL campaign as the advertiser has to pay for each engagement from unique visitors, even if they did not click through it or generate a lead. CPE ensures that advertisers are only being charged when users are noticing their ad and interacting with it as if they were charged on an impression basis, they could be charged for users that took no notice of their ad.

Note:

Similar to CPL (cost per lead), CPC (cost per click), CPM (cost per mille), and CPD (cost per day), do not use CPE to mean the amount of money a publisher earns for each engagement. Technically, it is incorrect to use this measurement on the publisher's side because it does not cost them money to display other advertiser's ads on their own website. The amount of revenue they earn per engagement would be RPE (revenue per engagement).

How To Calculate CPE?

CPE can be calculated using this formula:

Total cost of advertising campaign ÷ Total measured engagements

For example, if an advertiser spent £100 for 2000 total engagements, the CPE would be calculated below:

£100 ÷ 2000 = £0.05 CPE

Difference Between CPE and CPC

CPC is another advertising model where an advertiser is only charged if someone clicks through their ad. It is much more commonly used than CPE and is usually used in combination with CPM to determine how much they are charged for every 1000 impressions, but they won’t start being charged for every 1000 impressions unless they have a click-through.

CPE is almost always lower than CPC because all clicks count as engagements, but engagements do not have to be clicks. Often, when advertisers are charged on a CPE model, they are only charged for each engagement and are not also charged on a CPC basis, as that would make them pay extra money for each click.

Note:

If the only engagement that is being tracked on a CPE campaign is clicks, then the advertiser is running a CPC campaign, not a CPE campaign.