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epc

One of the most frequently asked questions I come across on affiliate marketing forums is “What exactly is    EPC, and how important is it?” This mostly applies to those who are still relatively fresh to CPA marketing,  but I think even affiliates at a more intermediate level can sometimes be misled by those three letters,  unsure how to interpret the corresponding numbers.

Let’s break down what exactly EPC is and how you should AND shouldn’t use it when you’re browsing through offers at DynamiAds.com.

What Exactly is EPC?

EPC stands for Earnings Per Click. The number you see underneath EPC next to a DynamiAds.com campaign represents the average earnings every affiliate running that campaign has earned relative to the amount of clicks received. Keep that in mind and how it differs from a conversion rate. An offer that has a $50 payout that only converted once on 100 clicks, will make you more than an offer that’s converted 10 times on a 100 clicks with a $4 payout. Although that second offer has a much higher conversion rate, it’s EPC will be lower because the significantly lower payout. The following two equations highlights the difference between the two:

EPC= $/clicks
Conversion rate=leads/clicks

Just because one offer has a better conversion rate and one has a better EPC rate, doesn’t mean that either is automatically better than the other however. For example, you might be paying a lot more to obtain those clicks in the first offer, lowering your ROI. This brings us to…

Measuring ROI with EPC

Since EPC is the average earnings per click, if you’re paying for clicks you can use the EPC number beside the offer to see roughly how much you can be paying for each click and still make a profit. If you’re paying roughly 50 cents for each click and the EPC of the campaign is the same, you’re most likely not going to be earning very much with that strategy. This is obviously just an average so it’s not going to be an exact measurement of YOUR potential success, but it is one way EPC can be used as an analytical tool.

Campaign Comparison

Where analyzing the EPC of an offer is most useful, is when you’re looking at two or more campaigns that are similar in nature. This happens frequently as you’ll come across different campaigns that have very similar models, CPA rates, allowable traffic sources, and are within the same vertical. You can compare the EPC numbers of these offers to see which campaign might be the better choice to start out with. If all the publishers running an offer are making more per click then the pubs running a similar offer, then your decision of which to run just got much easier.

When used this way, you’re essentially discovering what option gives you the better chance for more conversions.

Traffic Sources

This is perhaps the biggest monkey wrench that gets thrown into the idea of using EPC as a measurement of campaigns success. Different traffic methods will yield different EPC rates. No matter what this will always hold true. You combine this with the added factor of different CPA rates, niche, and a ton of other unmeasurable factors, and it soon becomes quite difficult to use EPC as an indicator of what campaign is better and which you should run.

For example, if an affiliate is using display ads in combination with a landing page, that’s going to most likely increase the average EPC that you see beside an offer on DynamiAds.com. Adversely, direct linking to an offer using PPV traffic is probably going to decrease that EPC. Since there are so many diverse offers on the network that allow different traffic sources, determining if an offer is superior based solely on that number isn’t a smart decision.

Conclusion

The usefulness of analyzing the EPC of any campaign will vary depending on the offer, what you’re comparing it to, and what you’re using it to determine. It should rarely be used as the sole decision maker in choosing a campaign at DynamiAds.com. It can give you starting point to help gauge your own success on the offer relative to other affiliates, but that success still has a lot of potential to vary, good or bad.

If you’re ever in doubt about any campaign and whether the EPC is indicative of it’s money making potential, talking to your DynamiAds.com Affiliate Manager is your best option. They’ll know the details behind the campaign and what traffic sources are (or aren’t) working best.

So IS the EPC of a campaign useful information or not?

Maybe.