When you become an affiliate entrepreneur, you start to learn affiliate marketing terms. Most of them are easy to understand, but one that isn't simple is the term called EPC (or EPC rate). What is EPC in affiliate marketing? And why do affiliate marketers care about it?
EPC stands for Earnings Per Click, and it is an industry-wide metric for determining the average commission per 100 clicks. Product owners often show this number to potential affiliates to demonstrate how well their program is performing. As an affiliate marketer, Earnings per Click tells you the earnings potential of the affiliate marketing schemes you join.
Let's get into more detail. If you are a product owner, you can use this article to understand the EPC metric better as well.
Why EPC is an Important Metric for Affiliates?
When you sign up to be an affiliate for a brand, you will typically get a personal affiliate link to share on your website or social media pages. When your website visitors or followers, click your link and complete certain actions on the brand website, you get a commission.
Understanding EPC earnings per click will help you find out which of your links are most effective. This can result in improving your marketing strategy and earning more money. Additionally, you can compare product owners by their Earnings per Click to ensure you are getting the most value for your time.
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
Earnings per click tells you how much money you earn for each 100 clicks, so you don't have to worry about monitoring every single click. When you sign up for a business's affiliate program, make sure you understand the terms of payout. For some programs, you may only earn a commission if the link-clicker makes a purchase.
For example, you may work with an affiliate scheme that offers you $2 per sign up and $5 per purchase. When you share your affiliate links on platforms such as your website, YouTube, Instagram, Facebook, or Twitter, you’ll have to figure out which earning path is more lucrative for you.
How to Calculate EPC (Earnings Per Click)
As a member of an affiliate network, you are not obligated to calculate your own EPC of conversions. Most brands will keep track of your transactions and everything themselves. However, it is important to understand how they get these numbers before you begin your promotions.
If you are a product owner, you should understand EPC as part of your product report. It can help you determine how successful your product campaign is, find areas for improvements, and understand the reasons consumers do or do not buy from you.
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 number.
When product owners calculate per click EPC, they use:
- The price of the product
- The affiliate commission per sale
- The net number of sales 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 average per click.
It is 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.
EPC in Affiliate Programs
There are three main types of payment arrangements for affiliate programs and affiliate marketing networks:
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 may pay you a percentage of the sale or a certain per-sale amount.
Pay-per-click. In these programs, you will be paid based on traffic. These are the visitors who click the link and come to the site. These people don't have to buy anything or click anything else for you to see revenue.
Pay-per-lead. Companies who operate with this model will pay based on the number of visitors who sign up for something after they click your link. This sign up could be for an email list, a free product, or any other promotion. The company uses these people as leads to potentially get more sales.
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 they expect from you, their rules, and how they pay their partners.
Advertisers may also offer information about how to run a successful affiliate campaign. Some popular methods include putting your link:
- In a blog guest post
- On your website landing pages
- In your newsletter
- In a podcast description
- On a page of reviews
Earnings per Click (EPC) make it easy for you to:
- Assess the profitability of different partnerships
- Show how different campaigns compare to one another
- Know which platform is producing the best conversion rate
For example, let's say you are part of two affiliate programs. In program one, you are getting fewer clicks overall than with program two. However, you earn higher payouts for every 100 clicks in program one even though program two is more popular.
Knowing this, you can decide to either (a) drop the lower-paying scheme and focus on program one or (b) find out if you can use the tactics you use for program two to increase your earnings in program one. You can analyze your EPC numbers to find out where you should focus your energy and resources.
Most affiliate platforms will calculate EPCs as you start your campaign. Some networks will show the average EPC for a brand’s affiliates before you start your campaign so you can see your potential earnings.
How to Use EPC to Improve Your Affiliate Marketing Campaigns
Most affiliate partner merchants use a third party to manage their affiliate schemes.
For example, one such affiliate site is ShareASale, where you can sign up and get information about a lot of brands seeking affiliate partnerships. These sites will provide you with a dashboard so you can see your payout amount, performance, and relevant news.
Many times, you will have to fill out an application to be an affiliate for a company. They will want to know your experience, your following, and how you plan to get affiliate traffic to their site.
Understanding EPC can help you:
- Understand how much you are earning from each campaign
- Compare affiliate partners
- Match data from your reports to see if your campaigns are gaining or losing traction
- Identify how much you earn in comparison to how much you spend
- Test different versions of your site to see which is more profitable
Overall, becoming an affiliate can be a good way to turn your website into something profitable and gain another stream of income. While it takes a little bit of effort to find the right strategy, you can see positive results no matter your niche.
If you are someone with a decent number of followers on your social networks, you can use your skills to promote a product you know they would use. Now that you understand how to measure your earnings per clicks, you can improve your marketing strategies and EPC earnings.
- If you want to learn more about paid advertising as an affiliate, consider looking at the course Super Affiliate System.
- The 10 Best Affiliate Marketing Course Training of the Year (great courses to start affiliate websites).
- 9 Top Affiliate Marketing Books You Should Read