What Is EPC?

Written by The Shops at 24Seven on Friday, July 18, 2008

When evaluating an affiliate program it is always important to look at the merchants EPC. EPC in a nutshell is Earnings Per 100 Clicks. Here’s an example of what your EPC would be if you earned $150 in commissions off of 767 clicks.

EPC = (Commissions/Clicks) x 100

EPC = ($150/767) x 100

EPC = $19.56

What does an EPC of $20 tell you? Well, on average, affiliates earn $20 in commissions for every 100 clicks they send that merchant. If you divide this $20 EPC by 100 you’ll see that comes out to $.20 per click. This is a very helpful indicator to use when deciding whether to promote an affiliate program or run Google Adsense. Interestingly, many website owners think they are earning the most they can by just using Google Adsense. However, if they were to actually test Adsense next to a strong converting affiliate program, they would earn more by promoting the affiliate program.

I’ve found the main reason website owners like Google Adsense is because they make at least a little money every day, even if it’s $0.20. They tell me, they can count on it. Maybe so, but they are losing money. They can’t stomach not seeing any commissions for 10 days or sometimes more. We have one affiliate that was hesitant about promoting our program. They were using Adsense but agreed to test out one of our links also. For a month or so they didn’t see any sales come in. But they didn’t give up. Just a few weeks ago they generated a $632 sale for a commission of $102!

Why wouldn’t I just promote the programs with the highest EPC?

Great question. Too many times affiliates make the mistake of just promoting the programs with high EPCs. A high EPC usually means, the merchant pays well, but in a very competitive industry. The cost to promote their products is much higher than the programs with a lower EPC. Most of the programs with EPCs above $80 in Commission Junction fall into 2 categories. Web hosting and Insurance. Very competitive markets, very expensive to promote.

30-Day EPC vs. 7-Day EPC

What does this mean? It’s pretty simple. The 30-Day EPC is what affiliates average EPC is in the last 30 days. Therefore, the 7-Day EPC is what they average within the last week. Currently, in ShareASale the My Wedding Favors programs has a 30-Day EPC of $34.11 and 7-Day EPC of $38.55. Why the difference? It’s not always easy to say, but last week wedding season began its peak season.

EPCs Can Be Misleading

While an EPC is a good indication of a program, it is not a great indication. In some cases an EPC can be a skewed number. Here are some reasons:

1. A program can have an EPC of $5 (not too great). However, it could be low only because one of their affiliates is sending a bunch of garbage traffic to them. They could be launching that merchants site as a popunder. Those clicks would still be calculated in the overall EPC, even though all their other affiliates have an EPC around $15. But you’ll never see the $15 EPC, only the $5 EPC.
   
2. An EPC can also be inflated. A merchant can have a great affiliate who drives 80% of that merchants business. That particular affiliate could have an EPC of $50, while all the other affiliates are more in the range of $12. However, since most of the clicks are coming from this large affiliate, their EPC will be closer to $40.
   
3. Lastly, an EPC can be inaccurate, typically lower, only because they do not yet have many affiliates promoting them. And the ones that do, are not very good at it.

To Conclude

It’s always better to test for yourself. What converts on your site may not convert as well for someone else. EPC should only be used to eliminate a really weak candidate. If you want to promote wedding favors and the My Wedding Favors EPC is $14.72, while another WeddingFavorXYZ has an EPC of $1.50, that’s a no-brainer!