In affiliate marketing, you’ve seen this three-letter acronym (EPC) plenty of times before — but do you really have this marketing term down pat?
Today, we’re going to talk a bit about this.
EPC stands for Earnings Per Click
This term is an important metric used to measure performance. The EPC for an offer can be determined using a very simplistic calculation:
Your Earnings Per Click is your earnings divided by the number of clicks your ad received.
It has become a key metric for all-things performance marketing. That’s why so many affiliates rely on the average EPC of a product at the time of choosing which offer to promote.
There are tons of traps and factors to be mindful of that could throw this metric off if you’re not careful.
Gross clicks & Unique clicks... and why they matter
What is the significance of the click on which it is based on your calculation?
Gross clicks are the number of clicks in total…in other words all the clicks that were made by the user. If the same user clicks 5 times on the same offer/banner, it will show 5 clicks. Using gross clicks for your calculation will tend to dilute the EPC value.
On the flip side, a click based on uniques will tend to increase the EPC value. This is because regardless of the number of clicks accounted for on various offers, the user will always be considered unique.
That’s why you should always be aware of the type of click being measured for the Earnings Per Click calculation. Otherwise, you might as well be comparing apples and oranges.
Is it calculated based on 1 click… or on 100 clicks?
This may sound crazy, but it has become all too common these days for people to observe inflated Earnings Per Click values showing the value of 100 clicks opposed to just one.
Many networks have been known to display information this way.
This method of display and reporting can artificially inflate your EPC while, in reality, you may be earning less. That is why it is crucial to ensure you're measuring your EPC values based on the same amount of clicks.
Basic principles aside, let's talk about the actual amount of $$$ you'll take home...
So, let's say that you're absolutely certain that your metrics were the same. You're now evaluating and comparing the Earnings Per Click on 3 different offers, all of which have been occupying the same spot...
In this hypothetical case, let’s say that these are your numbers below:
Offer B is looking pretty good right about now … right?
BUT WAIT — NOT SO FAST!
Yep, it’s never THAT simple in life; we forgot to mention 2 of the most important variables to look at in order to assess the efficiency of a campaign:
The Click-Through Rate (also known as your CTR), uttered in percentage, refers to the number of clicks related to the number of impressions.
The Effective Cost Per thousand impressions (aka eCPM) is used to determine your earnings per thousand impressions. First, you need to divide your earnings by your number of impressions. Then, you multiply this number by 1000 to bring it back to your CPM.
The number one goal for most webmasters is to maximize profits with his or her site's web traffic. Therefore, Earnings Per Click is not necessarily the best, sole metric to use to assess one’s campaign.
In order to maximize profits, it’s important to analyze the performance of an offer, or any other component (banners, pops), with eCPM (which means Earnings per 1000 impressions.)
Now, let's take a look at what happens when we add these new metrics to the equation:
Offer #2 clearly has the best EPC, but you would make only $0.20 per 1000 impressions generated by your website. On the other hand, Offer #3 has the worst EPC, but you would make $0.50 per 1000 impressions.
If you only look and focus on the EPC, you will miss out on bigger profits. You’re better off promoting a product that has a lower EPC but attracts a bigger proportion of your traffic.
Remember, there's more than meets the eye when it comes to EPC!
Think about that the next time you decide to promote an offer based solely on your Earnings Per Click. ;)
At CrakRevenue, we're fully aware how misleading this can be for some of you guys.
That's why we can't stress enough the importance of asking us questions if you have any when it relates to your EPC at CrakRevenue — because we're always showing you the real, true metric.
By displaying it like this, we're well aware that we might look less lucrative than other Networks - however - in all reality, you're actually MAKING MORE REVENUE with us.
So, make sure not to fall into the easy traps. An offer’s EPC is a great indicator, but as we said, it’s not the only thing to be looking at.
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