EPC and How to Use it in the Affiliate Channel

[00:00:48] Jamie: Hello and welcome everyone, all our listeners. My name is Jamie Birch, I am your host, of the Profitable Performance Marketing podcast and founder of JEBCommerce, your award winning affiliate management agency. Welcome to the show today. Today’s another solo episode of the podcast, where we talk about all things, affiliate marketing, digital marketing. We throw some things in about leadership and well, we try to discuss how you can reach your goals through your affiliate channel.

[00:01:17] So today we’re going to be talking about EPC, what it is and how you can use it intentionally, why we use it, why affiliates use it.

[00:01:27] Before we start I just want to talk to you a little bit about the services offered by JEBCommerce.

[00:01:32] If you are an advertiser and you’re looking for affiliate marketing help for your affiliate channel, then you definitely want to check out what we have to offer. Go to JEBCommerce.com/elements, and you will find four packages we offer to our clients. So if you’ve been looking for an agency and kind of frustrated with the lack of transparency on what they’re going to be doing for you and how much that is going to cost, we have solved this for you.

[00:01:57] We have four packages that are clearly laid out, including the prices. Check out JEBCommerce.com/elements, whether you are new to the space and just need some help to make sure you’re not doing anything wrong and the program is growing, or you need full service and. Every single thing done for you including paid placement, management, compliance, and all that sort of stuff, we have a package for you. So go check that out at JEBCommerce.com/elements.

[00:02:23] So let’s get to the topic at hand. This actually came up when I was having a conversation with Vanessa Isaacson the director of accounts at AvantLink and we talked about EPC and it, reminded me that we don’t really talk about this enough. So today we’re going to go over what’s what it is, how you calculate it, how affiliates use it and why. Even going to give you some time to calculate yours on your own and how you can use this and then why you want to use this and how you can I don’t want to say manipulate, but that’s the word that comes to mind, how you can change this to help you better achieve your goals.

[00:02:58] EPC, simply is earnings per click. A lot of people calculate this as earnings per a hundred clicks. Pretty easy to calculate. For any timeframe you take the commissions you’ve paid out to your affiliates and the amount of clicks it took to generate that, divide your clicks by a hundred. And then divide that commission by the number of a hundred click groups.

[00:03:23] So, if you spent a thousand dollars and it took a hundred clicks, your EPC is going to be a thousand dollars per 100 clicks. Some networks they just calculate that based on click. So if you had a thousand clicks, you earned a thousand dollars, that would be 1 dollar per click.

[00:03:40] Take a second to weigh that in, but it’s pretty easy calculation. It’s either all your clicks, or the commissions you paid out divided by all your clicks, or you divide your clicks by a hundred and then divide your commissions paid by a hundred clicks, and I’ll include in the show notes, those basic formulas.

[00:03:58] Imagine you’re an affiliate and you’re trying to figure out who am I going to feature in my newsletter this week? Or who do I want to include on my holiday shopping category page? Or who am I going to include in this week’s social media push?

[00:04:13] You’re going to look at all your partners and you’re first probably going to look at who I work with well that converts well, usually a pretty good guess, but you may want to find some new partners. So you’re going to look at some of the basics, how much commission are they charging?

[00:04:26] Let me step back. You’re probably going to look, who do I think will resonate with my audience? Hopefully you really understand your audience. What kind of categories work well? You’re going to look at that and then the affiliates are going to look and say, “well, how much can I earn?”

[00:04:39] They’re going to look at your commission rate. They’re going to look at return days. They’re going to look at any weird things on what’s an approved commission and what’s not. But if you’re looking at two brands, and one offers a 10 percent commission and one offers an 8 percent commission, at first glance, you’re like, “well, give me the 10 percent advertiser ’cause they’re paying more, I’ll earn more.” But that isn’t really always the case.

[00:05:04] If I’m looking at those two merchants and the one that offers me 10%, they convert at a rate of 1%. So 1% of all the clicks are gonna turn into a sale, but the 8% they convert at two times that, they convert at 2%. Out of a hundred clicks, I’m going to get two orders from that. So out of a hundred clicks, the 10% commission, I’m going to get one order that’s worth 10 percent commission, but on the 8%, I’m going to get two orders at 8 percent. You can see right there without doing the math in your head, which one you’d want to work with.

[00:05:39] It’s really hard to understand and get conversion rate. But you also got a factor in average order value. Maybe the 8%, the average order value is a thousand dollars, but the 10 percent advertiser, it’s only 600 dollars. So there’s conversion rate, there’s the cart value, there may be some other things like one of them offers a new to file bonus, or one of them only pays on new customers.

[00:06:03] There’s a lot that you have to figure in. All of that can be expressed in the EPC number. So the affiliate can look at that and say, ” well, the 10 percent advertiser has an EPC of 52 dollars, but the 8 percent has an EPC of 75 dollars. Now I know for every hundred clicks I’m going to earn more with the one offering me a lower rate.

[00:06:29] And I may be earning more because they convert higher, their average order value is higher, or there’s a bigger demand, so the conversion rate is just better, or they have a more generous qualified order and qualified commission terms and conditions.

[00:06:46] Affiliates look at that and they say “which one am I going to work with?” And they’re almost always going to choose the one where they’re going to earn more. That’s why they’re doing that.

[00:06:57] Affiliates use it to evaluate the partners that they want to work with and where to put you. If your EPC is low, but they liked the brand and they like you, maybe they will put you on the page, but they’re going to put you under everyone’s that EPC is lower and in hopes that maybe users will find it, vibe with it, and that EPC will grow. I’ll be honest, I know affiliates use this. I haven’t had a conversation where affiliates have said, “Hey, we need to increase that EPC.” They always say your commission is too low. A lot of times what they’re saying though, behind that is, “I’m just not earning enough.” There’s a lot of things we can do.

[00:07:36] So what I want you to do right now is pause and go calculate your EPC. I tend to like earnings per 100 clicks. So go and calculate what that is right now for say the last 30 days.

[00:07:49] Okay. So you paused or maybe you did it, but you went and calculated your EPC. Now you can go in the network of your choice. Hopefully you have created your own affiliate account and you can go through and you can see what the EPCs are for other other brands in your peer group.

[00:08:06] Why is this important to you? I think that’s pretty obvious. If you’re an affiliate manager, you’re going to be the lifeblood of a program and a growing program. A healthy growing program is both optimization and recruitment.

[00:08:19] Optimization and retention of the programs that you have or the partnerships that you have, but also bringing on new partners. If you want to get a really attractive, creative, innovative, growing publisher, you’re going to be weighed against your peer group on how you do, and what you can earn them.

[00:08:40] You want to know what your EPC is. You want to try and be able to know what it is against your peers, and you’re going to want to use this to do recruiting. You want to also know your EPC by affiliate type, not just your program as a whole, but go check out your EPC by affiliate type, and even by partner.

[00:08:59] So let’s talk about optimization. You can go through your affiliate list and you may find a partner who is very high on what they’re earning per 100 clicks, but they’re not generating a whole lot.

[00:09:11] Now you can bring that metric to them, and maybe with your most current offers, maybe a special offer, you can bring it to them and say, “Hey, you’re generating one of the highest EPCs in our program. The volume isn’t there, but I think this EPC is attractive enough for you to put a little more effort behind it, and in turn to help you with that, I’ve given you these tools.”

[00:09:32] That can help with retention and optimization, and then you can use it for recruitment. You can come out there and say, our EPC is category leading. You’re going to earn more from this.

[00:09:43] Now you may be thinking, or you may have found out your EPC is crap. Now you got to do something about it. So the first thing I do when EPC is low is I look at who’s driving traffic. I do a report based on traffic and I want to know who in my program is driving traffic that just isn’t converting. You will probably find a few in there, or maybe one, that are driving quite a bit of traffic and it’s just not converting.

[00:10:12] Now, the mistake people make is just immediately removing them from the program. Don’t do that. Don’t do that just yet. Unless you find that you did let some garbage in and it’s just really garbage traffic. What I tend to do is use this as an opportunity, again, to optimize. I come to that affiliate, I will email, I will call, I’ll connect on LinkedIn, I will Facebook them, but I’ll say, “Hey, I was looking over the numbers you drove 15,000 clicks in the last 90 days, but the conversion was super low or non-existent. I took a look at your site” and that’s the next thing you want to, before you talk to them, go look at their property. Go look at what they’re doing for other merchants and what they’re doing for you.

[00:10:48] You may find that maybe there’s a tracking issue. You may find that they’re they’re promoting an offer that doesn’t exist or one that expired and consumers are clicking through for that offer and seeing that it doesn’t work and so they’re not converting. You may find that the landing page goes somewhere other than it should. So follow that customer’s path to purchase first, then reach out to the affiliate and say, “Hey, you’re not earning a lot from us because the traffic isn’t converting and here’s what we should do.” And then you’ll reveal your plan. That may turn that person around. I usually try three times over the period of two weeks to reach out to them.

[00:11:22] If the traffic isn’t converting at all and I don’t hear anything, I’ll probably go then and suspend the account and I’ll send them one final note. ” Hey, we’d love to talk to you about making this change and growing together. I suspended your account because it doesn’t seem to be converting, but I’d love to talk to you. Here’s my phone number. Here’s my email. Here’s my LinkedIn. And if there’s any other ways that you’d like to be contacted, Twitter or X, anything like that, I put that in there.”

[00:11:48] You can manage the clicks coming through to increase your EPC. So imagine 15 percent of your clicks aren’t converting at all, and they’re from partners that either should optimize or should be out of the program and you get the ones to optimize. Now they’re converting, and then the ones you remove now, your EPC is going to be higher because bad unconverting clicks you’ve removed. That’s one way to manage manage your clicks.

[00:12:13] The other thing you can do is bring on new partners that convert higher. So you may be trying to attract content creators and they’re looking at that going, “your EPC is garbage. I’m not putting any effort into that.”

[00:12:26] You may really want this top of funnel affiliate and they create great content and you want them to create great content for you and they’re not going to, because they don’t look like they can earn much. What do you do? Again, manage your clicks, look through those partners, optimize and remove, but you can also bring on a type of affiliate that’s a high closer.

[00:12:48] If maybe your program is completely focused on content creators and that’s what you want, but in order to get them, you have to have a converting program that attracts them. So you bring on the ones that are bottom of the funnel and they’re closers, cashback, loyalty, coupon sites, to convert to show the partners, the ideal partners that you want to come in, that you can convert, you can close the deal, they can earn money so that that increases increases your EPC.

[00:13:20] So that’s a way it’s like, why would I want coupon sites? There’s a ton of reasons, and you can go to JEBCommerce.com/value. There’s a whole coupon report we did with all the networks and several affiliates that shows you data on what coupon sites can do. There’s some pretty compelling stuff in there, but I’ll include that in the show notes.

[00:13:37] But you can bring those in, in order to convert sales, to raise your EPC, to make that more attractive to the partners that you want to bring in.

[00:13:47] So EPC, what is it? It’s earnings per click or earnings per 100 click affiliates. Use it to evaluate partnerships they should be working with. You should use it to retain, to identify optimization targets in your program, and to recruit affiliates into your program. You can manage your clicks to manage that EPC, you can bring on new partners.

[00:14:09] Oh, I forgot one. You can increase commissions with those partners that are doing well and that are converting well. You can increase the commission in an optimization campaign with them, but that’ll also increase your EPC.

[00:14:22] That’s generally what we’re talking about here. What ideas do you have? How do you use EPC? How have you increased it? And what have you found when you did? We would love to hear from you. Send that over to gethelp@jebcommerce.com or comment below. We would love to hear from you.

[00:14:37] And that’s the episode today. If you found this useful, man, please go and share it. Facebook, LinkedIn, X, send it to someone who may be struggling with this issue right now. Maybe you need to send it internally to the team. You can use this to help bolster your strategy for 2024 or Q4. Use this any way that you see fit, and it would really help us and get the word out if you leave us a five star review on Apple Podcast or Spotify or the podcast player of your choice.

[00:15:08] So thank you again, and if you’re an advertiser listening to this and saying, “look, this all sounds great. I neither have the time or the expertise to get this done, but it needs to happen. I need a team.” Definitely contact us at gethelp@jebcommerce.com or go to JEBCommerce.com/elements, choose the package that you think best fits for you.

[00:15:28] You can click that Learn More or go to any of our contact pages and we will set up a time. Nothing needed on your end. We’ll set up a time to talk that out with you.

[00:15:36] Thank you again for getting this far in today’s podcast. Hopefully you learned a little bit about EPC and you have some ideas on how you’re going to use that going forward.

[00:15:46] So thanks.