Affiliate marketing is an online marketing practice that assists a marketer to increase sales by allowing affiliates to target the same audience, and in return affiliates can earn a commission by recommending the product to others. Affiliate marketing is in fact is a tactic of earning a commission by promoting other company’s products, If you find a product that you like, you promote it and earn a portion of the profit for each sale that you made.
But when deciding which payment method to choose and what aim to set during affiliate marketing process, there is need to take into consideration the needs of both advertiser and affiliate.
Leadbit is one such company which take care of their advertisers and publishers equally.
Whilst the advertiser wishes to work for a cost per sale to ensure they are spending within their budget, the affiliate makes sure to ensure that they are making as much revenue as possible for the traffic they got on the website.
There are numerous payment method in affiliate marketing, the most popular ones are payout and EPC. The affiliate marketer often get confused with method to choose. We have jotted down some points to make the difference between these two clear and let you choose the best one.
The Payout is the earning affiliate receives on each conversion on the website. This specific value is decided by an advertiser, and it can be either fixed or dynamic. Payout is the revenue that is set for each and every action that is taken by a visitor which is boosted by affiliate.
When you tent to choose Payout offers that can actually convert, it may be fascinating to go for the offers with the highest revenue. But this will always vary depending on the targeted country, operating system, and the flow as well. But does the highest payouts are best to choose? Not always.
While EPC or Earning per click is a benchmark to measure the effectiveness of being able to covert a click into commissions. EPC or Earnings Per Click, is outlined as the rate of commission that you’ll earn for your click-throughs on your affiliate links. Setting up the EPC for affiliate marketing provides you a fruitful and easy to grasp process to see how your efforts are paying you, and what is going right with it – or may be wrong!
EPC is a very simple calculation. The calculation is as follows;
EPC = Total revenue earned from a specific channel (minus customer returns) / Total number of clicks to your website from that same channel
And while forecasting if you are not aware about how many clicks you will have, or average revenue you will earn, you can simply calculate it using the following method;
EPC = Average Historical Revenue Per Sale * Average Historical Conversion Rate (CVR)
EPC statics are usually more significant than the Payout statics, while reviewing your performance. Why it is so, because Earning Per Click is directly correlated to overall earnings in comparison with Payout.
In the end I would suggest you to consider all the factors and your aim so that you have a clear blueprint to measure the performance of your campaigns with regards to the Return on Investment (ROI) of your campaigns.
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