What Does The Term ‘EPC’ Or “Earnings Per Click” Mean?

What Does EPC Mean?

 

 

What Does The Term ‘EPC’ Or “Earnings Per Click” Refer To?

 

“Earnings Per Click” or ‘EPC’ is a term used primarily within the realm of digital marketing.

The “click” would refer to the person on his or her computer/tablet/phone clicking on link in question.

This could be well-known types of advertising such as a Youtube ad, or Google Search ad, or could be a type of “organic traffic” such as a link being clicked within a blog post, or the description beneath a Youtube video.

The ‘earnings’ refers to the amount of money generated (on average) by each of those clicks.

 

 

How To Calculate EPC

 

Calculating “Earnings Per Click” or ‘EPC’ is easy.

It simply comes from a math equation where one divides the total revenue earned from all the clicks in question by the total number of clicks.

Again, it would be:

Total Revenue Earned From Clicks divided by Total Number Of Clicks.

Or…

E (total earnings) / C (number of clicks) = EPC (earnings per click)

 

 

Example “Earnings Per Click” Or ‘EPC’ Calculation

 

Let’s say Dianne is selling a gadget she invented, and marketing it on an advertising network like Outbrain.

She is buying clicks from Outbrain, then sending the person clicking her ads to her Shopify store, where they are able to purchase the gadget in question.

She purchase 1000 clicks from Outbrain, and in doing so she sells 9 gadgets.

Those 9 gadgets each generate her $60.00 in revenue, meaning her total revenue generated is $540.00.

As a result, her ‘EPC’ or “Earnings Per Click” is $0.54.

We come to this conclusion by dividing her total revenue ($540.00) by the total number of clicks she purchased.

 

 

 

EPC Vs CPC = Profitability

 

In the above example, Dianne is using a paid advertising network, and would therefore be paying for each click. The amount she pays per click (her ‘CPC’) is not relevant to the ‘EPC’ calcuation, but it is very relevant to her success in marketing the product!

As astute readers have realized, Dianne needs her ‘EPC’ (“Earnings Per Click”) to be higher than her ‘CPC’ (“Cost Per Click”) in order to make money.

To continue the above example, let’s say Dianne spent 450$ on those 1000 clicks.

This would mean her ‘CPC’ would be $0.45.

If her CPC is $0.45 and her ‘EPC’ is $0.54, she would have made a decent profit margin (around 20%).

 

 

Conclusion

 

This is how one calculates ‘EPC’ or “Earnings Per Click”.

It should be noted that while the example above is based in a type of “paid traffic”, the EPC formula can also be applied to “organic traffic” (also called “free traffic”), since there is still a total amount of revenue (E) to divide by the total number of clicks (C).