What Does EPC Mean in Affiliate Marketing?

When you become an affiliate entrepreneur, you start to learn affiliate marketing terms and the industry lingo.

Most of them are easy to understand, but one that isn’t simple is the term called EPC (and EPC rate).

What is EPC in affiliate marketing? And why do some affiliate marketers care about it?

EPC stands for Earnings Per Click, and it is an industry-wide key performing indicator.

Product owners and affiliate networks often show this number to potential affiliates to demonstrate how their program performs via affiliate promotions. If you’re a product owner with an affiliate program, this article will help you understand the EPC metric from your affiliates’ perspective.

As an affiliate marketer, Earnings per Click gives you an idea of the earnings potential of the affiliate marketing schemes you may be considering.

Let’s get into more detail.

Why EPC is An Important Metric for Affiliates

When you sign up to be an affiliate for a company brand, you will typically get a unique affiliate link to share on your website or anywhere on the web. When your website visitors or followers click your link and complete certain actions (usually a lead or a sale) on the brand’s website, you get a commission.

Understanding EPC earnings per click will help you determine which products you’re promoting bring in the most affiliate income.

Comparing products by their Earnings per Click can improve your marketing strategy by focusing on what’s working, pausing what isn’t, and earning more money.

Keep in mind you may not see earning for clicks that:

• Have a high bounce rate.
• Don’t result in a purchase or sign-up.
• Result in only a small amount of activity.

How to Calculate EPC (Earnings Per Click)

Affiliate networks and affiliate management software in 2024 usually calculate the EPCs of your conversions, but it’s important to know how this affiliate marketing metric is calculated.

The simple formula for calculating EPC is Earned Commission ÷ Number of Clicks.

Each of your publisher’s products may have different earnings per click EPC numbers.

When product owners, or affiliate systems, calculate your affiliate EPC, they use:

• The price of the affiliate offer and the revenue generated from the product’s sales funnel.
• The affiliate commission per sale.
• The net affiliate sale transactions you’ve made.
• The total number of click-throughs on your affiliate link.

For example, let’s say the product you’re promoting costs $50, and you get $5 every time a visitor purchases through your link.

In this EPC example, we’ll say you sold 10 units, and visitors clicked on your link 100 times.

That means your earned commissions would be the per-sale commission multiplied by the number of sales: $50 ($5 x 10 units).

Then, you divide that number by the number of clicks (100).

Earnings per Click = $50/100 clicks = $0.50 per click

So, you earned 50 cents on average per click.

The above example is the most basic EPC formula. Some companies use the EPC per 100 Clicks or EPC for a specific time frame (i.e., 7-day EPC, 3-month EPC, etc.) to gauge performance.

It’s also important to note that all clicks count towards your numbers, not just unique ones. So, if someone clicks your affiliate link ten times, that counts at ten clicks.

Additionally, the payment model for many partners includes removing refunds from your affiliate earnings. If a customer returns their purchase, you will not get that money.

Affiliate Payout and EPC

There are two main types of payment arrangements you’ll encounter in affiliate programs and on an affiliate network:

Pay-per-sale. With this kind of arrangement, the merchant site pays you when you send them a customer, and that customer buys something from their sales page. The merchant typically pays you a percentage of the sale.

Pay-per-lead. Companies who operate with this model, usually a CPA network, pay based on the number of visitors who sign up for something after they click your link. This sign-up could be subscribing to an email list, a free product, or any other promotion. An additional KPI with this model, as an affiliate would be your cost per acquisition (aka. CPA).

Whatever the affiliate payout structure is, it’s important you know how your affiliate marketing campaign efforts contribute to your average earning per click.

Note: In general, a business can create affiliate marketing offers for any action they want. When you agree to become an affiliate, make sure you understand what conversion goals they expect from you, their rules, and their commission structure.

Upfront EPC Metric Examples

Most affiliate partner merchants use a third-party affiliate network to manage their affiliate schemes and have upfront EPC historical data.

Websites like ShareASale, Commission Junction, and Clickbank provide affiliate scheme details such as total commission, EPC metrics, their best converting landing page, conversion rates, and more once you create an account with them.

For private affiliate programs, it’s common for vendors to display their average EPC and other affiliate stats on their affiliate sign-up page to incentivize future affiliates to join.

With most brands, you will have to fill out an application to be an affiliate. More experienced programs will usually require you to complete an application survey of sorts (i.e., monthly traffic potential, email list size, how you’ll promote their products, etc.) and potentially other vetting processes.

How EPC Can Improve Your Affiliate Marketing Campaigns

Earnings per Click, or EPC, can help you:

• Understand how much you are earning from each affiliate campaign.
• Compare earning potential of different partnerships based on their EPC data (it’s not uncommon for the same product/brand to be on more than one affiliate marketing network).
• Show how different campaigns compare to one another.
• Analyze which traffic source (social media, pay-per-click, native advertising) brings in a high EPC.
• Be able to communicate with your affiliate manager more effectively.
• Test different versions of your site to see which is more profitable.

Each of the points above deserves dedicated examples, but we’ve only got room for one example in this article.

To illustrate how EPC helps determine which affiliate network is best to promote X affiliate product in, let’s say you are part of two affiliate programs.

In program #1, you get fewer clicks overall than with program #2 but generate higher EPCs. However, program #2 has higher payouts than program #1, but your EPCs are lower.

Knowing this, you can decide to either:

• (a) drop the lower-paying scheme and focus on program #1.
• (b) find out what’s working with program #1 and apply it to program #2 to increase your sales volume and earnings (talking with your affiliate manager(s) may be helpful).

Now that you have a better understanding of how to calculate your earnings per click and the significance of EPCs, you can analyze your EPC numbers, conversion rate, along with other key metrics, to find out where you should focus your energy and resources.

If you think this article was helpful and answered what is EPC in affiliate marketing, consider sharing it with an affiliate marketer friend!

Related:

• If you want to learn more about being an affiliate advertiser, consider joining affiliate forums like the STM Forum or courses taught by experienced advertising affiliates.
• If building niche affiliate websites that make you monthly affiliate income from free traffic is more your cup of tea, check out The 10 Best Affiliate Marketing Course Training of the Year.