This metric typically refers to the amount of revenue that can be expected to be earned for every 100 clicks through to an affiliate link.
This metric is often displayed by affiliate marketing networks to help publishers evaluate and compare the earnings potential of different merchants. Below is an example from the CJ Affiliate dashboard:
The formula for determining EPC is:
Affiliate earnings / Number of clicks from affiliates x 100
However, there are many reasons why the EPC indicated on an affiliate marketing platform may be much higher or lower than what a site will actually realize if the ads are run.
This is primarily due to variance in the conversion rate between sites. Under an affiliate marketing model, the click from a publisher’s site through to the advertiser doesn’t actually generate any revenue. Instead, the referring site earns a commission only when a certain action is completed (such as the purchase of an item or opening of an account).
As such, the percentage of clicks that convert to completed transactions has a major impact on the EPC realized by an affiliate. In general:
- If a site’s conversion rate is higher than average, the realized EPC will be higher than the reported EPC
- If a site’s conversion rate is lower than average, the realized EPC will be lower than the reported EPC
Higher = Better?
While the EPC can be a useful metric for comparing affiliate marketing offers, it shouldn’t be the only number that publishers consider. To illustrate this point, suppose you run a blog about old cars and are evaluating two different merchants. Here’s merchant number one:
And here’s merchant number two:
The first hypothetical merchant (AT&T) has a very impressive EPC; for every 100 clicks, affiliates earn almost $350. That’s more than 10x what the second merchant offers.
But the relevancy of the second potential merchant is much higher. As a result, the click rate would likely be much higher for the second. Moreover, the conversion rate would also be generally higher for relevant merchants.
Put another way, the earnings from an affiliate marketing campaign can be expressed as:
Pageviews x click rate x conversion rate x commission
The EPC metric considers only the final two variables in that equation (and those two only on average, not for a specific site). The click rate that can be expected is very important as well. The link in the resources below contains more suggestions for properly evaluating different affiliate marketing offers.
EPC Affiliate Program
EPC affiliate programs are schemes that pay commission per 100 clicks achieved, making it easy to assess the profitability of different affiliate partnerships side by side, as well as showing how different campaigns and links for the same product or partner perform compared to each other.
What does EPC (Earning Per Click) Mean?
EPC stands for Earnings Per Click, and is used for affiliate marketers for different offers. For your campaigns you take total earnings and divide it by number of clicks.
What is the difference between PPC and EPC?
PPC is the pay per click advertising model wherein advertisers pay the publisher each time their ads are clicked. Whereas, EPCis concerned with the total commission that is generated and how many clicks it has used to do it
how the earning per click (EPC) formula is calculated?
To calculate earning per click (EPC), it simply just by taking the total earning you have generated over a period, and the then dividing that by the total number of clicks you have generated over the same period
Why is earning per click (EPC) an important metric?
Earning per click (EPC) gives you the exact amount of money you can expect to receive for every click generated based on historic performance