Sunday, September 28, 2008

Cost per Engagement

We have heard about CPC (Cost per Click) and CPM (Cost per Mille) as existing forms of ROI in online
advertising. Recently a new form of online advertising is evolving called Cost per Engagement (CPE). This form of advertising allows the web user to take complete control of what they wanna watch on the web. Traditionally we have tried to encourage ((or forced) users to click or view our banners. As per a research conducted by Nielson most pages are viewed for less than two minutes. User sessions may have become shorter and shorter but have definitely increased. Looking at the above graph we can see the comparison between 3 of the most known social networking sites. The number of minutes spent on a website by an average user is trending southward for the list websites except for Facebook. If we calculate the number of minutes spent by an average user per day on each of these sites it averages to approximately 0.46 minutes per day. The traditional form of online advertising doesn’t guarantee user engagement. We would not know if the user was genuinely interested in the ad offering and did he actually view or click the ad. CPE encourages the user to engage with the brand and learn about the product. Again you have few seconds to get the attention of the user on the website to encourage him to interact with the ad for a longer period. In this form of advertising users will definitely cooperate as they have the controls. An advertiser will get genuine customers who may be interested in the product offering. Check out this video which explains the CPE concept.
One of the companies that offer this form of advertising is VideoEgg . It reaches about 50 million users per month, is a leading ad provider to social media sites like Bebo, MySpace and Meebo. It is also one of the most popular ad providers for Facebook application pages.

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