Digital ad firm Exponential has introduced a new pricing model for video advertising, CPME.

A hybrid of the CPM (cost per thousand) and CPE (cost per engagement) models, CPME works by initially charging a CPM price for view, then automatically moves to CPE if people engage with the ad by, for example, expanding the banner or clicking through.

If 1,000 people view an ad, for example, and 100 go on to engage with the ad, the advertiser would be charged on a CPM basis for the 900 views and CPE for the 100 engagements.

“This model is about combining the best of both worlds by automatically valuing each ad exposure correctly, whether it’s a passive impression or an active engagement”, said Jason Trout, Exponential’s UK managing director. “Valuing it in this way encourages greater investment in the ad teaser experience itself so it is optimised for the right people. At the same time, it places a value on the engagement, ensuring that ad quality is not sacrificed for quantity.”