Cost Per Engagement (CPE) advertising is a performance-based compensation model that offers many benefits for both advertisers and publishers. Unlike other models, CPE tracks not only whether an ad was served, but also if it was viewed or interacted with by the user. This creates a more meaningful engagement between the audience and the advertisement, resulting in higher conversion rates and better ROI for advertisers.

While CPE may be more expensive than other models, advertisers only pay when a viewer engages with the ad unit. This ensures that advertisers are only paying for actual results, making CPE a more cost-effective option. The exact definition of "engagement" may vary depending on the type of advertisement and the goals of the campaign. However, it is typically agreed upon by the advertiser and publisher before the campaign is launched.

Light Box ads are a common example of CPE-based advertising. When a user hovers over the ad for a specific amount of time, it expands to a larger size. Advertisers only pay for those who engage with the ad by hovering over it, and publishers benefit from optimizing screen real estate. Poll ads, product tour ads, and online games are other examples of CPE-based advertisements.

CPE advertising is most suitable for larger online networks, where it can be more challenging to engage users. The Web Traffic Brokerage recommends combining CPE ads with other models to provide a timely delivery of web traffic with a cost-conscious strategy. Overall, the benefits of the CPE compensation model make it an attractive option for advertisers and publishers looking for higher engagement rates and better ROI.