Earnings per Click (EPC): The Ultimate Guide for Marketers
As a digital marketer or online advertiser, you‘ve likely heard the term "Earnings per Click" or EPC thrown around quite a bit. But what exactly does EPC mean? How is it calculated? And most importantly, how can you use EPC to evaluate and optimize your marketing campaigns for maximum profitability?
In this comprehensive guide, we‘ll dive deep into everything you need to know about Earnings per Click. We‘ll explain the origins of this essential marketing metric, provide step-by-step instructions for tracking and analyzing your own EPC data, and share proven strategies for boosting your EPC and driving more revenue with every click. Let‘s get started!
What is Earnings per Click (EPC)?
Simply put, Earnings per Click is a measure of the average revenue generated each time a user clicks on one of your ads or affiliate links. It is calculated by dividing your total earnings by the number of clicks over a given period of time:
EPC = Total Earnings / Number of Clicks
For example, let‘s say you earned $500 from an ad campaign that generated 1,000 clicks last month. Your EPC for that campaign would be $0.50 ($500 earnings / 1,000 clicks).
EPC is a vital metric for online marketers because it directly represents how much money you can expect to earn, on average, each time a user engages with your promotional content. A higher EPC means your campaigns are more profitable and deliver a better return on your marketing investment.
The History and Importance of EPC
The concept of Earnings per Click has been around since the early days of online advertising and affiliate marketing in the late 1990s. As more and more businesses began shifting their marketing budgets to digital channels, it became clear that traditional metrics like impressions and click-through rates (CTR) weren‘t enough to truly gauge the success and profitability of online campaigns.
EPC emerged as a way for marketers to cut through the noise and focus on the bottom line: How much revenue is being generated with each click? By tracking EPC across different campaigns, audience segments, and marketing partners, businesses could finally identify their top-performing assets and make data-driven decisions to optimize their strategies.
Today, EPC remains one of the most important metrics for anyone involved in online marketing or advertising. Whether you‘re a small business owner managing your own Google Ads account, an affiliate marketer promoting products for commission, or a marketing agency reporting results to clients, understanding and improving EPC is key to driving more revenue and achieving long-term success.
How to Calculate and Track EPC for Your Campaigns
Now that you understand what EPC is and why it‘s important, let‘s talk about how you can start tracking this metric for your own marketing campaigns. The process is relatively straightforward, but it does require some basic analytics and reporting setup.
Step 1: Implement Click Tracking
First, you need to make sure you have a reliable system in place for tracking the number of clicks on your ads and affiliate links. This is usually handled through your advertising platform or affiliate network‘s built-in tracking tools.
For example, Google Ads automatically tracks clicks for any campaigns you run through the platform. If you‘re an affiliate marketer using a network like Commission Junction or ShareASale, they will provide tracking links that allow them to credit you for any clicks and sales generated from your promotions.
Step 2: Set Up Conversion Tracking
Next, you need to track the earnings or revenue generated from those clicks. This is done through conversion tracking, which involves placing a small piece of code on your site‘s order confirmation or thank you page. When a user reaches this page after clicking your ad and completing a purchase, the code fires and attributes the earnings back to the original click.
Again, most advertising and affiliate platforms have their own conversion tracking tools you can use. Google Ads, for example, provides a conversion tracking tag you can add to your site. Many e-commerce platforms like Shopify also have built-in affiliate tracking features.
Step 3: Pulling EPC Reports
Once your tracking is set up, you can start pulling reports to calculate your EPC. Most platforms provide EPC data directly, but you can also calculate it yourself by dividing your total earnings by clicks over a set period of time (as shown in the formula above).
We recommend tracking EPC on at least a monthly basis so you have enough data to identify trends and make informed optimizations. However, you may want to check your numbers more frequently for time-sensitive campaigns or high-volume periods like holidays.
Analyzing and Acting on EPC Data
Tracking your EPC is only useful if you‘re able to interpret the data and take action to improve your results. Here are a few key ways to analyze EPC data for insights:
Compare EPC Across Different Dimensions
Start by comparing EPC across different campaigns, ad groups, marketing channels, audience segments, devices, geographic regions, and more. Look for any areas that are significantly outperforming or underperforming the average. This will help you identify opportunities to double down on what‘s working and cut back on what‘s not.
Monitor EPC Trends Over Time
Keep an eye on your EPC trends from month to month. Are your numbers improving, declining, or staying steady? If you see a sudden drop, dig into your campaign reports to determine the cause. It could be anything from increased competition to seasonal purchasing behavior to technical issues with your tracking setup.
Compare Your EPC to Industry Benchmarks
Research average EPC benchmarks for your industry, niche, and marketing channels. This will give you a sense of how your campaigns stack up against the competition. Keep in mind that these benchmarks can vary widely depending on factors like your profit margins, average order value, and customer lifetime value.
Tips and Strategies for Improving EPC
Once you have a solid understanding of your current EPC performance, you can start implementing strategies to improve your results. Here are a few of our top tips:
Focus on High-Quality Traffic
Not all clicks are created equal. A click from a highly-targeted, ready-to-buy user is much more valuable than a click from a casual browser. Focus your campaigns on reaching your ideal customers through tactics like keyword research, audience targeting, and ad placement optimization.
Optimize Your Landing Pages
Your EPC is directly impacted by your conversion rates. Sending traffic to a confusing, generic, or slow-loading landing page is a surefire way to tank your earnings per click. Make sure your landing pages are highly relevant to your ads, load quickly, and provide a seamless path to conversion.
Test, Test, Test
Always be testing new ad copy, images, targeting criteria, bidding strategies, and landing page variations. Use A/B testing to pit different versions against each other and let the data drive your optimizations. Even small improvements in click-through rates or conversion rates can have a huge impact on EPC.
How EPC Compares to Other Marketing Metrics
EPC is just one of many metrics marketers use to evaluate the success of their campaigns. Let‘s take a look at how it compares to a few other common metrics:
EPC vs. CPC
Cost per Click (CPC) is the amount you pay for each click on your ads. It‘s essentially the inverse of EPC. While EPC measures the revenue generated per click, CPC measures your costs. Both are important for understanding your overall ROI.
EPC vs. ROI
Return on Investment (ROI) measures the total profit generated from your marketing campaigns relative to the amount invested. It provides a "big picture" view of your profitability, while EPC drills down to the individual click level. Tracking both is ideal.
EPC vs. CPA
Cost per Acquisition (CPA) measures how much you pay to acquire a new customer, lead, or sale. Like EPC, it provides insight into the effectiveness of your campaigns. However, CPA is more focused on costs rather than revenue.
EPC Case Studies and Examples
To help illustrate the power of tracking and optimizing EPC, let‘s look at a few real-world examples:
Improving EPC with Audience Targeting
Company A runs an affiliate marketing blog promoting various digital products. After analyzing their EPC data, they noticed that their top-performing content focused on SEO tools. They shifted their content strategy to target more SEO-related keywords and audiences, resulting in a 30% lift in EPC within two months.
Boosting EPC with Landing Page Optimization
Company B sells online courses and uses Google Ads to drive course signups. They tested two different landing page variants: a long-form sales page and a short-form squeeze page. The squeeze page generated 40% more leads, but their EPC analysis found that the sales page leads converted at a much higher rate, resulting in 25% higher earnings per click overall.
FAQs About Earnings per Click
Still have questions about EPC? Here are answers to some of the most common ones:
What is a "good" EPC?
Ultimately, a "good" EPC is one that generates a healthy profit for your business. That said, average EPC benchmarks can vary widely by industry and marketing channel. As a general rule of thumb, an EPC above $1 is considered strong for most online advertisers.
How often should I check my EPC?
We recommend tracking EPC on at least a monthly basis for most campaigns. However, you may want to monitor your performance more frequently during high-volume sales periods or when testing new strategies.
Can I use EPC for SEO?
While EPC is primarily used for paid advertising and affiliate marketing, you can apply the same principles to your SEO efforts. For example, you could track the EPC of organic traffic from different keywords or landing pages to identify your top revenue drivers.
What other factors impact EPC besides conversion rates?
EPC can be influenced by a variety of factors beyond conversion rates, including your product price points, average order value, customer lifetime value, and profit margins. Keep these variables in mind when analyzing EPC data.
Wrapping Up
Earnings per Click is a powerful metric that should be on every online marketer‘s radar. By understanding how much revenue you generate with each click, you can make smarter, data-driven decisions to optimize your campaigns and drive more profitable results.
Use the tips and strategies outlined in this guide to start tracking and improving your own EPC. Remember to focus on attracting high-quality traffic, optimizing your landing pages, and continuously testing new ideas. Over time, even small improvements in EPC can have a huge impact on your bottom line.
Looking for more guidance on EPC or other digital marketing topics? Check out the additional resources below:
- Google Ads Help Center: About Conversion Tracking
- CJ Affiliate: EPC Explained
- Supermetrics: The Ultimate Guide to EPC
- Neil Patel: How to Increase Your Earnings Per Click
Originally published April 20, 2023. Updated June 1, 2023.
