Posted by Affiliates and product owners: If you keep your eyes on only one metric, it should be earnings per click.
If you’re not studying this metric, if you don’t know how it’s calculated, and if you aren’t using it strategically to influence your business decisions, then you are leaving money on the table.
Earnings per Click (EPC) doesn’t care how high your conversion rate is, the number of clicks you generate or how much you get paid.
This metric cuts through the statistical clutter and gives you the exact amount of money you can expect to receive for each click you send to an offer.
This is key, whether you are acting as an affiliate or purchasing clicks.
In the case of acting as an affiliate, you already have a good idea of how much traffic you can drive from your list.
If you can routinely send 300 people to an offer, then all else being equal, knowing the EPC can tell you which offer to promote.
For example, if one offer is paying $1.22 per click, and the other offer is paying $4.81 per click, it makes it pretty clear which offer you should spend your time on.
And as a product owner purchasing clicks, you can compare the cost per click to the earnings per click to determine if purchasing clicks will make or lose you money.
Calculating earnings per click works like this: Net profit per click = earnings per click – cost per click.
Forget conversion rates, click through rates and payouts. If your earnings per click is higher than your cost per click, you’re making money.
Most advertising platforms will provide you with the cost per click or a way to calculate it. And most affiliate platforms will also tell you the earnings per click.
Of course, if you’re promoting your own product, you’ll need to determine your approximate earnings per click. This isn’t simply the money you earn from the initial promotion.
When you purchase advertising and make sales, you are building your list of buyers. Some of these buyers will continue to make purchases in the future, and adding this factor to your earnings per click will allow you to pay more money per click while still staying in profit.
Of course, if finances are tight, you’ll want to make more up front on your clicks than you spend. But once you’ve banked some profits, you’ll be able to use that money to increase the price you pay for clicks as needed, thereby growing your list of buyers even faster.
And if you also capture email addresses of people who visited your sales page but didn’t buy, and if some of those go on to become buyers later, these are additional profits you can factor into your calculations.
To calculate earnings per click (EPC) take the total earnings you have generated over a period of time, and then divide that by the number of clicks you have generated for that same period.
This is an estimate of what you can expect each individual click you are generating to product in earnings.
3 Tips for Earnings per Click Campaigns:
1: Be Smarter. If a network approaches you with an offer that has a higher payout, it looks good, doesn’t it? But in reality, it means nothing.
Yes, the payout is higher, but what if the conversion rate is lower?
You could be losing money by going with the new network.
But if your EPC is higher on the new network than the old, you are now making more money.
Conversion rate doesn’t matter and the payout doesn’t matter. EPC does matter.
2: Test Faster. Having only one metric to use as your baseline to measure performance makes split-testing super easy.
Forget tedious calculations and focus solely on earnings per click to save time and make more money.
3: Feel Safer. Fraud happens in the marketing world.
But when you have a close eye on EPC, you are empowered and in control of performance.
And if the EPC suddenly drops, you can change out links or switch networks in minutes.
Stop getting lost in numbers and metrics and instead focus on your EPC.
It’s simpler, easier, faster and, most of all, more accurate than any other metric in determining your profit.