Understanding EPC – 1 Click, 100 Clicks or 1000 Clicks?

With so many terms and variations used in performance marketing there continues to be confusion in the space. With metrics measuring ROAS, CRM, CTR, CPC, PPC and so many more, the terms used to describe EPC in affiliate marketing, or Earnings Per Click, is no exception.

EPC is one of the most important metrics both for affiliates and affiliate managers alike . It helps EPC - Earnings Per Clickunderstand the success rate of an affiliate program over a particular timeframe compared to other programs, helps affiliates understand how much they may earn and if a program is well managed, and helps merchants understand how well their affiliates are performing and what they may potentially be doing to drive sales.

Variables that affect EPC are things like cookie days, website conversion rates, commission payouts, the quality and quantity of affiliates driving clicks to a program, how they are driving those clicks and more.

But the confusion comes in more so by the variances in EPC definition. Some networks, such as Google Affiliate Network, use a 100 click EPC benchmark to describe the average earnings, and others, such as Commission Junction, describe it as the average earnings for every 1000 clicks.

Further, some affiliates break it down themselves to understand what they might earn per one click. This is generally the case with PPC affiliates who have to measure true EPC to determine Net Earnings Per Click which are calculated, not on gross sales, but on RPC (Revenue Per Click) minus CPC (Cost Per Click).

eFax.com has an interesting description of EPC to clarify further:

“Your EPC (Average Earnings Per One Hundred Clicks) is a relative rating that illustrates the ability to convert clicks into commissions. Your EPC is calculated in an “apples to apples” comparison with all publishers by taking each publisher’s total commissions earned (regardless of currency) and then converting that total (if necessary) to US dollars.”

Commission Junction also breaks it down well based on their internal processes:

Three month EPC values are calculated and updated daily, using data beginning five months previous through three months previous. On the first of each month the “five months previous through three months previous” timeframe changes to accommodate the month change. For example, an EPC rating in June is calculated using data from January, February, and March. It is necessary to use data beginning five months previous to give accurate EPC ratings that may include extended or reversed transactions.

There must be at least 1000 clicks for the 3-month period to calculate your EPC. If less than 1000 clicks occurred, N/A will display for the EPC.

7 day EPC is a calculation made by taking data from yesterday counting back seven days. We take the sum of all commissions for the 7 days and divide it by the sum of all clicks for the same 7 days then multiplying this by 100. If today’s date = N, the date range used is N-8 to N-2. NOTE: There must be at least 100 clicks for the 7-day period to calculate your EPC.

In the words of Carolyn Kmet, the point of this exercise is to understand that EPC should be used to determine if a merchant is converting or not and how it’s performing in relation to other programs.

If an affiliate is calculating their own EPC, they need to use whichever calculation makes the most sense for them.  For many, EPC is more of a standardized approach to gauging whether or not a program converts over time, rather than an end-all-be-all in determining exact financial earnings.

Share

Adam Riemer

10 years ago

I’m sorry to disagree but this is one of the least important and most misleading metrics for Affiliate Marketing. I tell people to ignore it, avoid it and abandon it…especially high EPC programs.

1. If you have an email drop from a large newsletter…your EPC tanked but the program could be amazing.

2. If you have coupon sites poaching sales by ranking for merchant name or url + coupons, coupon codes, etc… your EPC will be high and the chances of having your commissions overwritten and stolen is higher so it is a program you should not ever join.

3. If you have a high volume affiliate that isn’t relevant but can drive a sale here or there, it could be a great program with a flawed and extremely low EPC.

4. If you have self shoppers you will have a high EPC because 1 click with a sale will increase it a huge amount.

5. If the self shopper clicks once and makes multiple purchases…your EPC goes through the roof giving another unfair representation of the program.

I disagree 100% with this post, except for your measurement of what it means. EPC should be ignored and not used to make a decision on a program or the success of it. Especially with the number of programs that allow or have coupon poaching, adware theft, trademark bidding, bidding on trademark variations like merchant name or url + coupons, or even self shoppers.

Sorry to write something not agreeing with you but I wanted to voice another side to this extremely flawed and unreliable metric.

Adam

Sarah Bundy

10 years ago

Hi Adam,

I love the conversion and appreciate your feedback and specific examples of how it can changed based on particular scenarios. I think where the wording might be changed on my end, is that EPC is a metric that almost EVERYONE looks at. It’s there for a reason, and yes, although it’s flawed (and thanks for the examples above) it’s still a needed metric to determine if a program should be joined or not. If a program has a $1.50 30 day EPC what does that tell you? From a merchant perspective if five of your direct competitors have a $20 30 day EPC and you have a $4.59 EPC, it might indicate you have something to look into further. I agree with you that it is flawed and will change based on many variables, but I disagree that it should be ignored. Every program (and affiliate) needs to have benchmarks to gauge how they are performing compared to others, and this is a metric that can help accomplish that.

Adam Riemer

10 years ago

You have a good point, but remember the amount of programs that are being ripped off here. Take all of those competitors and type in url + coupon code or coupons for the merchant and see how many of them have active partners that rank organically or bid on these terms. Then look at the numbers. Most programs allow this type of poaching or theft which gives you a huge boost and a nice looking EPC. I think EPC should be ignored or be the very last things to ever look at if you are evaluating a program or comparing programs. High EPC’s also attract low value partners because a high EPC can easily be an indicator that it is a poorly managed program that is allowing certain behaviors because the manager doesn’t care or doesn’t know better.

Sarah Bundy

10 years ago

All great points Adam and again explains why EPC IS important! A merchant who watches their EPC will notice when it gets too high or too low (or way out of whack) and can dig deeper into reasons behind it. It gauges what’s going on in a program and should be an indicator for affiliates to be cautious of a program or not. If a program has a $300 EPC compared to others in the $45 range, they will know something is up – like you said, maybe there are poaches, TM bidders, toolbars or adware or just poor management, and potentially join another program instead. For the affiliate manager if this is happening in their program they can raise a red flag that maybe an affiliate in their program is doing something they shouldn’t and can take steps to correct it. I don’t think EPC should be ignored at all, but agree with you that it is flawed and that it can be drastically inaccurate depending on those variables outlined above.

Archives

Categories

Latest Tweets

Favicon-White

 

Interested in our AIM Newsletter?
Yes Please

Contact Info

Unit 238 – 11180 Coppersmith Place, Richmond, BC, V7A 5G8

Copyright 2019 Sarah Bundy © All Rights Reserved