CPC/CPM to Cost Per Engagement? Same as ROI to ROE?


An interesting question popped up in one of the Linkedin groups that i follow:

Do you think this recession will change the way we measure our online campaigns and move from CPC/CPM to Cost Per Engagement(CPE)? Has any one got a matrix for CPE ?

My answer was:

I don’t think that the recession would have an impact on the way online campaigns are measured. However I do hope that online campaigns will be more measured and that the recession will give a boost towards a more actively approach to social media.

I also don’t think that we should level CPC/CPM against CPE (witch BTW is a good term) for me they are two different things that of course should be measured.The question is very close to the debate about ROI and ROE where ROE stands for Return on engagement. So let’s think about CPE the same ways as ROE

We could say that ROE stand for how the engagement among the customers has grown since the company became active on the web. Measures could be comments, questions, uploaded material and basically anything that is used to feed the dialog and interaction.

The problem/opportunity with this is that the company needs to interact with its customers. Right here we have a major difference between CPE and CPC/CPM where you could more statically analyze a webpage for those variables. The interaction itself is just like CRM and focuses more on long term relationships, as you can see it´s hard to get clean measures.

This is also why it’s quite hard to build a matrix for CPE or ROE. It’s all about interaction, engagement and not numbers. I do think that all the fantastic data we get from the digital trail our customers leaves on WebPages, can be cross-referenced and be very useful, HOWEVER we need to separate soft and hard variables where one thing is numbers and the other engagement.

Let’s turn it completely around! And look at it as ROE is the road to a good relationship with a customer, then we might see ROE as the map to this goal. But this is something we can only do afterwards (or?). The main learning is that we need to interact and be out there, on the web, and this will be a huge challenge to most companies.

The first step is to understand what social media is!

The second step is to monitor what’s being said out the on the huge online-market see it as an awesome SWOT-analysis that is being presented digitally with more variable than ever before.

The third is to engage and interact on that digital market.
The forth is to prosper.

Whats you thought about CPE and ROE, perhaps we can build a matrix together!

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