How Not to Interpret EPC …Especially When Doing PPC

Stop and ThinkRegardless of what you may hear about affiliate marketing being an untapped goldmine waiting for you to become the Internet’s next millionaire, you gotta be careful. Campaigns where as an affiliate you are remunerated for performance only require (i) a careful and educated approach, and (ii) taking it easy. Otherwise, your affiliate role may end up being a complete fiasco, turning you into another skeptic that failed due to his/her own mistake.

Focusing on any one metric is always a deadly mistake; even more so when this metric is the affiliate program’s EPC (abbreviation originally created to signify a program’s average affiliate’s Earnings per Click). Most affiliate networks display EPC data to you even before you join an affiliate program. There are two things you shouldn’t do with that information:

1) Understand EPC Literally — In the vast marjority of cases EPC now means Earnings per 100 Clicks, and not per single click [more here].

2) Budget Your Campaign Based on EPC — If you’re planning on buying traffic (be it via PPC, or any other method), you gotta be especially careful with how you use the EPC data. One of the costliest mistakes is to merely divide the EPC figure by 100, and budget your marketing campaign setting the result of this basic arithmetic operation as the amount you’re willing to pay per click/visitor [see the below example].

Let’s take a health insurance affiliate program as an example. Below is the information you will see on it (prior to joining it): affiliate program data

The program’s 3-months’ EPC is $16.56. Dividing this number by 100, we will arrive at an average affiliate earning of $0.16-$0.17 per click.

Here’s the part you do not see (top 10 affiliates’ EPC in the program): EPC for top 10 affiliates

Do you see how different the amounts are in every case? They range from $5.45 to $292.24 in earnings per 100 clicks, but you don’t know this when you’re looking at the average; and the individual affiliate’s EPC data is only available to the merchant.

There are also other important factors that you do not know, but the above one already illustrates the point well.

Averages are good to know, but always tricky, and should be treated as such.

Never base your decision on any single metric, especially if this metric is an average.

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10 thoughts on “How Not to Interpret EPC …Especially When Doing PPC”

  1. great tips, thanks as always..

    what would be a solution for this ? to take the top programs and talk to the am about the epc ? what i noticed, especially in cj, is that am very rarely answer affiliates, probably due to the high number.

  2. Razvan, as you have mentioned very few affiliate managers will go out of their way and share this information with you. The solution? Experiment yourself. Feel free to use the formula I’m suggesting in another post + develop your own formulas and approaches.

  3. That’s why I like to look at my own EPC or EPHC. EPC on the network can be a small guide telling you that it is active and people are buying or affiliates are getting leads. Whether you are able to do that is remain to be seen.

  4. I couldn’t agree more. In a lot of cases, it might be important that you IGNORE RON EPC. It will completely depend on your traffic sources and audience and the context your ads/links are in.

    I’d also add to beware of programs like EPN where EPC is NOT the earnings *you were paid per click* but your earnings *divided* by your clicks. This is extremely important to understand when you’re traffic source is PPC and has been the downfall of a lot of affiliates.

  5. Exactly, Dave, and good to have you, with all your experience in PPC affiliate marketing, chime in. Every affiliate’s individual EPC will always be dependent on the traffic sources, and the targetedness of the audience.

    It is also always important to check on the exact definition of EPC in the context you’re analyzing it in.

  6. I kind of disagree with you here dude – your EPC screenshots are from CJ which have always used EPC of 100 clicks when that’s not really the norm at all. In fact of all the networks I belong to (50+) CJ is one of the few using EPC of 100 clicks instead of 1 click. Just look at any popular CPA network and you’ll see what I mean.

  7. Yes, Carl those indeed are CJ screenshots, and in the vast majority of cases with traditional affiliate networks, it is Earnings per 100 Clicks. See more in the Econsultancy discussion I’ve linked to.

    Having said the above, it is really irrelevant whether it is EPC or EPHC. The main point in my above post is really the second one — never take a metric that gives you an average measurement for the basis for your planning.

  8. Brent Mitchell

    What other methods do you use to determine how much to pay per click? I’m new to PPC, but have a good track record of clicks/conversions and EPC from an affiliate I use with email marketing. Would love to learn more!

    1. Brent, comparing PPC to email marketing wouldn’t be right. The affiliate EPC received from (targetted) email campaigns would always be significantly higher than from (most) any paid search campaign. Additionally, see my explanation under point #2 in the above post (where I warn not to “budget your campaign based on EPC”)

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