What is cost per engagement (CPE)?
Cost Per Engagement (CPE) is an advertising pricing model where advertisers pay only when users actively engage with an ad. Engagement actions may include:
- Clicks on a CTA button
- Likes, shares, or comments on social media ads
- Video views beyond a set duration
- Expanding interactive ads (e.g., hovering over a display ad)
💡 CPE vs CPC (Cost Per Click)
While CPC only counts clicks, CPE makes sure advertisers only pay when users show real engagement with an ad.
Pros and cons of cost per engagement
Like any pricing model, CPE has advantages and limitations.
| Pros | Cons |
| Engagement-driven: Ensures users interact before spending ad budget. | Engagement ≠Conversions: Not all engagements lead to sales. |
| Ideal for brand awareness: Encourages social sharing and community growth. | Can be costly: If engagement isn’t well-targeted, it may waste ad spend. |
| Works well for social media ads: Facebook, Instagram, and TikTok use CPE-based ad models. | Requires strong creatives: Ads need to be engaging enough to drive interaction. |
💡 CPE is best for building brand engagement rather than direct-response conversions.
How to calculate CPE?
Formula
CPE = Total Ad Spend Total Engagements
Example
A Shopify store runs a Facebook engagement ad promoting a limited-time offer. If they spend $500 and get 1,000 likes, shares, or comments, their CPE is:
CPE = 500 / 1,000 = $0.50
This means the brand pays $0.50 per user interaction.
Try our CPE Calculator!
Cost Per Engagement (CPE) Calculator
CPE vs. other advertising pricing models
To choose the right pricing model, you need to specify your campaign goals, such as engagement, conversions, or brand visibility.
| Pricing model | How it works | Best for | Key difference from CPE |
| CPE (Cost Per Engagement) | Advertisers pay only when users engage (like, comment, expand). | Social media engagement, brand awareness | Ensures users take action before spending budget. |
| CPC (Cost Per Click) | Advertisers pay per ad click. | Traffic & conversions | CPC is better for driving site traffic, while CPE focuses on engagement. |
| CPM (Cost Per Mille) | Advertisers pay per 1,000 ad impressions. | Maximizing reach | CPM doesn’t require engagement, just visibility. |
| CPA (Cost Per Action) | Advertisers pay only when a conversion happens. | Sales, leads, and direct-response campaigns | CPA is conversion-focused, while CPE measures brand interaction. |
💡 If your goal is to maximize interaction and social proof, CPE is the ideal pricing model.
