Earnings per click (EPC)

Definition

Earnings per click (EPC) is a metric used in online advertising to measure the effectiveness of an advertising campaign.

What is earnings per click?

Earnings per click represents the average revenue generated for each click on an ad or affiliate link.

The formula for EPC is as follows:

EPC = Total earnings / Total clicks

This metric is important to advertisers as it provides insights into the profitability and effectiveness of their marketing efforts. A higher EPC indicates that the advertising campaign is generating more revenue per click, suggesting better performance and return on investment.

Several factors can influence EPC, including the quality and relevance of the advertising creatives, the targeting and segmentation of the audience, the competitiveness of the market, the pricing and commission structure, and the conversion rate of the landing page or offer.

While EPC provides valuable insights into the revenue generated per click, it may not provide a complete picture of overall campaign performance. Advertisers should consider other metrics such as conversion rate, return on ad spend (ROAS), and customer lifetime value (CLV) to assess the total impact of their marketing activities.

Example of earnings per click

Company ABC runs an affiliate marketing campaign where it pays affiliates a commission for each sale generated. During the campaign period, Company ABC earns $2,000 in revenue from sales. Throughout the campaign, there were a total of 500 clicks on affiliate links.

Now the earnings per click can be calculated for the campaign:

EPC = $2,000 / 500 clicks = $4 per click

In this example, the earnings per click for Company ABC’s affiliate marketing campaign is $4. This means that, on average, the company earns $4 for each click on links that results in a sale.