If you’re an affiliate marketer, then you’ve seen these three little letters many times. But what does it actually stand for? EPC stands for Earnings Per Click. The term is an essential metric for measuring performance.
How is EPC determined?
Your Earnings Per Click is calculated by taking your earnings and dividing them by the number of clicks your campaign received. If we want to get really technical, the formula is based off every 100 clicks and not just per one click.
For example, 100 clicks earned with a total of $75 made, then the EPC is $75 or $0.75 per individual click.
So why is EPC important?
Suppose you want to test out two offers, one pays $30 and the other pays $40. Your initial guess would be the $40 is going to make you more money. However, that isn’t always true.
Offer A pays $30
Offer B pays $40
Offer A ($30) receives 100 leads with a total of 700 clicks. You earned $3500, and the EPC comes out to be $5.
Offer B ($40) receives 70 leads with a total of 700 clicks and you earn $2700. The EPC on this offer is $3.86.
You end up making more money on offer A with an extra $800 in revenue. Crazy right?
But if you truly want to utilize the Earnings Per Click metric, then you’ll use it to figure out profit. First, you’ll need the amount you spend per click for a campaign, and then you’ll compare it against the Earnings Per Click that is calculated in your dashboard software. By having this number you’ll be able to get your Net Profit Per Click– and now you’re in business.
Net Profit Per Click is figured by subtracting your Cost Per Click from your Earnings Per Click, which equals your Net Profit Per Click.
(Earnings Per Click-Cost Per Click= Net Profit Per Click).
This is the key to everything. It doesn’t matter what your conversion rate is or the payout of an offer. What matters is if your Earnings Per Click are higher than your Cost Per Click. If it’s higher, then you’re making money- and we’re all here to make money.
The name of the game in affiliate marketing is to make money, just like any other business. In order to do this, you need to know your data. However, staring at numbers all day is a tedious task. To ensure you’re using your time wisely, we recommend focusing on your EPC and using the equation above in finding your Net Profit Per Click.