What is EPC in online advertising: how to calculate and what indicator is considered normal

We continue to expand our wiki library with new useful reference materials that are directly related to affiliate marketing. Today we’ll figure out what the EPC (Earning per Click) indicator in advertising is, how to calculate it, why an ordinary webmaster needs it, when this metric plays an important role in making money on CPA offers, and most importantly, how to increase it. Let's go!
 

What is EPC and why does a webmaster need it

By tradition, we will define what EPC is in traffic arbitrage, advertising or affiliate marketing. This abbreviation stands for Earn per Click and means the average earnings of a webmaster from each visit to the landing page. 

EPC formula: revenue/clicks

To make it clearer, let's look at an example: users clicked on your affiliate link 1000 times. One of them performed the target action on the offer landing page. That is, he became a lead. For this lead, you received a payout of $100. Therefore, EPC (earnings per click) is $0.1 or 10 cents. We will talk about the calculation in more detail below.

What is EPC in internet traffic arbitration: when it comes to looking for CPA offers that have a higher return on investment (ROI), then EPC is the number that matters the most. You may have high payouts on affiliate offers, but that doesn't mean the offers work well. In fact, the EPC determines the effectiveness of the proposal.

Let's say an offer with a payout of $80 generates 50 leads from one hundred clicks per month. His EPC becomes $40 per click. Another offer with a payout of $100 generates 25 leads with a total of 100 clicks per month. So his EPC is $25 per click.

How to find out the EPC offer — usually it is in the general statistics in your account. If not, ask your manager about the availability of this metric.

So, in the above case, obviously you should have chosen the $80 payout offer instead of the $100 payout offer. In fact, this is how EPC helps in finding partnership offers.
 

How is EPC different from eCPC?

In some CPA networks, instead of EPC, there is an indicator of eCPC. In fact, these are two identical indicators - they differ only in the wording.

EPC stands for Earn per Click and eCPC stands for Effective Cost per Click. Also, eCPC is interpreted as the maximum bid per click, at which the webmaster will not work at a loss.

Both indicators are a kind of benchmark for how much you can bid per click in an ad network. If the eCPC is 1 cent, and the ad network has a minimum bid per click of 2 cents, you are unlikely to make a profit.
 

How to calculate EPC in advertising

Now let's figure out how to calculate EPC. Everything is simple - you need to divide the income by the number of clicks. Consider the example in the screenshot below.. 

An example of the presence of the EPC metric in the affiliate network statistics

1448 clicks were made - we count only unique clicks, since only they are paid by the webmaster in the advertising network. One of them completed the target action and the webmaster was paid $28 for it. Therefore, the calculation of the EPC indicator will look like this: 

$28/1448 = $0,019. In the screenshot, it is rounded to 0.02.

How does this EPC formula apply to traffic arbitrage (affiliate marketing): if each click brings almost two cents on average, then you can predict that if you put in 10,000 clicks, they will bring conversions of $190. More precisely, it will be 6 or 7 leads for $168 or $196, given that the payout is $28. Naturally, this is provided that the traffic will continue to convert approximately the same.
 

What EPC is considered normal

There are no average indicators that would be relevant for all verticals and offers. In some niches, EPC can reach $3, somewhere it is $0.02. It all depends on how much you spend on advertising and what kind of payouts you get. 

Let's figure it out, what EPC is considered normal. We have already explained above that the EPC in the offer is the average temperature in the hospital. When pre-evaluating an offer, it is not always possible to understand how much the traffic will cost. And if you have already launched an advertising campaign and received 1000-2000 clicks, you can understand if your EPC is normal. It must be greater than the cost per click. If the EPC is less than the cost per click, you are in the red. If more than 2-3 times, this is a good result. 

Also keep in mind that if the EPC is equal to the cost of a click, you are most likely not at zero, but in the red, because some of the clicks are always lost. The real indicator is always slightly less than the one that is visible on the screen in the affiliate program or than the one that you calculated based on the statistics of the affiliate program. 
 

How to increase your EPC

We figured out above how to calculate EPC, now let's figure out how to increase it so that traffic not only pays off, but also makes a profit. The answer will be quite banal - to optimize traffic costs. Suppose we have found an offer that performed well in tests in some source. Next, we conduct tests, during which we increase the profitability of the advertising campaign through several areas:

• We choose the most clickable and profitable promotional materials;
• We create or select the most working pre-landing or landing from the available ones;
• We disable source sites, devices, operating systems, cities and regions of the country that do not pay off traffic.
• If we are talking about contextual advertising, then as part of the optimization, we disable ads for unprofitable keywords.

To optimize, you need:

• For teaser and push ads, set up tracking and send conversion data to a tracker or ad network;
• For contextual advertising and social media targeting, set up a tracking pixel. Recall that it transmits information about conversions to the advertising network, and the system automatically selects placements, lead times, regions and creatives that convert best.
• In the second case, it seems that everything is simple: I set up a pixel, launched an ad, filled it with a plus almost automatically. However, if creatives, pre-landers, and landing pages are unable to sell a product to a user, no pixel will optimize ads. Therefore, in addition to setting up ads, optimization requires work on advertising creatives and landing pages.

Determining how well your optimization is going is not difficult. Just open the statistics of your campaigns for different periods. If the average EPC for a weekly period is higher than for a four-day period, then the optimization is successful. If it does not grow and even falls, then something is going wrong.
 

In conclusion

For beginners, the indicator may seem contradictory. It can be used as a guide when comparing offers from the same niche, but the decision must be made based on a combination of factors. EPC in marketing is an important indicator, but not absolute. According to the results of testing, the webmaster can get numbers that are 5-10 times different from the average values in the catalog of affiliate network offers.