When you start as an affiliate marketer or start an online business, you come across a lot of affiliate marketing terms. While you may not be used to all of them, you have probably read about the term EPC. Of course, you have or not, why would you be here?
So, what is EPC in affiliate marketing? EPC stands for earnings per click. It is an industry-wide metric to evaluate the average commission per 100 clicks. Product owners, affiliate networks, and affiliate marketers use this number to see how well a product or campaign is performing, as well as how much money it is ultimately making.
In this article, we’re going to discuss the basic understanding of EPC, how to measure it, what it means to marketers and merchants, and how we all can benefit from it.
What is EPC in Affiliate Marketing?
In affiliate marketing, the term EPC stands for earnings per click. The easiest formula for calculating EPC is Commission ÷ Number of Clicks.
To simplify it even more, EPC rate means how much commission you make with per 100 clicks.
Seems a bit confusing, right?
Actually, it’s not that complicated. The term doesn’t mean exactly what it says.
For example, X product’s EPC is 5$.
It means, for every 100 clicks you generate to this product’s link, you earn a commission of 5 dollars.
If you generate 1000 clicks, you earn 50 dollars. So, X product’s EPC rate is 50$, and the exact earning per click is 50$ ÷ 100 clicks = 0.50$
What EPC means to an Affiliate Marketer
If you’re an affiliate marketer, you’ll join an affiliate program. They’ll assign you a product to promote, or you can choose one from the products that are available for you.
Now, most affiliate networks attach that product’s EPC right beside them, so that it’s easier for the marketer to evaluate if it’s the right choice for him/her.
For example, product A has an EPC of 5$, and Product B has an EPC of 4$.
Now, there are a couple of things you can understand from this information.
First of all, the EPC of product A indicates that it is making an average of 5$ for an affiliate.
It doesn’t necessarily mean you will be earning 5$ per 100 clicks. If you generate 100 clicks to these products, and no one buys this product, you’ll earn no commission. No one will be paying you commissions unless you make it for yourself.
Secondly, many affiliates are sharing this same affiliate link on their blog or website. Suppose 2 affiliates are working on this same product. One affiliate is making 10$ per 100 clicks. Another affiliate is making 0$. So the average EPC for this product is 10$ ÷ 2 = 5$. The EPC you see on an affiliate network chart is the amalgamation of all the average EPC of every affiliate that is working for them.
But, EPC can give you a basic idea about how much of a success rate a product might have. If product A has an EPC of 5$ and product B has 4$, product A has a higher chance of earning you more commission per every 100 clicks.
However, you have to figure out which product you’ll have an easier time promoting.
For example, suppose you’re promoting both products A and B to your audience.
The more expensive product A has generated a total of 500 clicks from your audience. From that, you have earned a total commission of (500 clicks ÷ 100) × 5$ = 25$
On the other hand, the less expensive product B has generated 2000 clicks and earned you a total commission of (2000 clicks ÷ 100) × 4$ = 80$
You ended up earning three times as much commission from the product with lower EPC.
So, higher EPC does not always equate to more money. It’s about which products you can sell more easily.
Keep in mind that not all affiliates have the same amount of expertise. An experienced affiliate can channel a lot of traffic to any product. But a beginner affiliate might have a better success rate with a product that’s easier to sell with lower commission rates.
Additionally, you can compare different product owners by their EPC to see who is paying better to their affiliate marketers. Sometimes a general EPC is low because product owners or affiliate networks are paying lesser than others. You can compare that information to figure out which party will value your efforts more.
Earnings per click tell you how much money you make from every 100 clicks. Therefore you don’t have to monitor every single click.
What EPC means to a Product Seller
A higher EPC rate means that a product is making more money for a merchant. It can also mean that their marketing campaign is working.
A lower EPC rate means that a product isn’t selling, or that the marketing campaign or affiliate marketing schemes aren’t being fruitful.
Lower EPC for a merchant also means very few affiliate marketer will work for them. So you can understand how much it’s important for a merchant to have a higher EPC for their product.
EPC vs CPC
CPC stands for Cost per click. It’s another metric to determine the spending value of an advertisement.
For example, suppose you’re a product owner, and you’ve posted an ad on Facebook. You’ve spent 100$ on this ad. Only 500 people have clicked on this ad, and only 10 people have made a purchase.
So your cost per click is 100$ ÷ 500 = 0.50$
If your EPC is less than your CPC, you’ll lose money. To make money in affiliate marketing, it’s must to have the equation as, EPC > CPC.
How Understanding EPC Can Help You
Understanding EPC can help you in a couple of things. These are –
- Give you a general idea about how much you’re earning from a product or a campaign.
- Help you compare different affiliate partners/networks.
- Check if you are losing traffic or gaining more.
- Whether you are earning more money or spending.
- Giving you the chance to test out different versions of approaching your audience and see what works best.
If you are new into affiliate marketing, then there are some strategies that you can follow to monetize your efforts appropriately. Understanding EPC can help you in that regard.
In this article, I’ve tried to answer any questions that you may have about what is EPC in affiliate marketing. I hope it has helped you out.
Remember, the more you learn about affiliate marketing, the more likely you are to succeed. Check out all my other blogs that only relate to affiliate marketing.
If you have any new terms to know, please comment below. Thanks for stopping by.