Earnings Per Click (EPC) is a critical marketing metric for almost any company in existence. Understanding what EPC is and how to calculate it can reveal how much (or how little) impact your products are making in the marketplace and what kind of earning potential you can expect in the short- and long-term.
As part of an overall marketing and business strategy, Earnings Per Click data is a valuable and informative tool
The Earnings Per Click Scenario
The EPC process begins when a company decides to sell its products through affiliate advertisers. Most often this is done by placing an ad about your merchandise on another company’s website and offering them compensation, i.e. a commission, for helping to sell your goods.
Generally, the commission is a percentage of your actual sales revenue (after a specific refund period) and payment for every time someone clicked your ad on the affiliate site and landed on your website to learn more about your products. The dollar amount paid out for every click is the Earnings Per Click.
Your EPC number paints a picture of how well your products will convert to sales and clearly states the worth of a click, both of which can be great incentive for your affiliates to keep actively promoting you to their contacts and customers. It’s also a way to determine which products or offers will perform the best among similar offers with different payouts.
Calculating EPC
Earnings Per Click is not only the dollar figure that affiliates will earn per click, but it’s also the mathematical calculation used to determine that number. If the math reference has you trembling, fear not. As business calculations go, this one is simple.
EPC = Net Commissions Earned After Refunds (Commission x Sales)
