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EPC > CPC means Profit? Is it ?

Discussion in 'CPA' started by vamos rafa, Dec 30, 2011.

  1. vamos rafa

    vamos rafa Registered Member

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    I am a CPA newbie. I was just going through a course (ppc formula) where that guy mentioned as long as EPC > CPC, it means profit.

    Now I am very confused. If i spend 20$ and buy 100 clicks, so my CPC is 0.2$
    Now lets say my EPC is 0.3$ so EPC > CPC

    Assuming 50% of the people who visit my landing page go to the CPA offer i.e. out of 100 who visit my landing page, 50 people go to the offer, so my revenue will be 50*0.3=15$

    So I get a loss of 5$, i.e I spend 20 and get back 15.
    So this formula is wrong ? Please clear as it is just blowing my mind :rolleyes:
     
  2. bilalownsu

    bilalownsu Registered Member

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    I am not sure what the formula is but my guess is that the person assumes everyone will go to offer page. So profit would be .3*100 = $30.
     
  3. antsaoo

    antsaoo Supreme Member

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    well the first statement is correct. epc > cpc profit yes.

    But the 2nd is bit off. if 100 people go to your page where CPA gives 1$ per submit and 50 people complete it you will get 50$ and your epc will be clicks/revenue so 100clicks/50$ will make epc 0.5$ if the cpa is 2$ you will get 100$ which will make 100 clicks / 100$ , Epc in that case is 1$ (estimated per click)
     
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  4. vamos rafa

    vamos rafa Registered Member

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    but why will each and every visitor go to offer page from the landing page? clicks will be bought to my landing page not offer page ?i cant assume a 100 percent ctr

    i m terribly confused :batman:
     
  5. antsaoo

    antsaoo Supreme Member

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    well assuming that you get 100% my formula is correct. but if you get 50% ctr then just split the epc with 50% for example.

    Epc = estimated per click. you buy 100 clicks and make 50$ your epc is 0.5 no matter what happends in between the click and the completion of the offer.
     
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  6. sapo

    sapo Power Member

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    and this is what seperate the big ballers from the children rafa (marquez ftw)

    who every taught you or whatever gave you the basics, now you know your LP CTR not you have to figure that with CPC/EPC to gain a profits,

    Nobody gets a straight formula to a profitable method without paying for it.
     
  7. tacopalypse

    tacopalypse Executive VIP Jr. VIP Premium Member

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    to get your earnings, you would multiply your clicks by your earnings per click.

    100 clicks x $0.3 epc = $30
    $30 > $20, so you make a profit.

    even if your conversion rate is 50%, you would not multiply 50 by 0.3 because 50 is not your clicks, it's your conversions. your clicks are always 100 regardless of what your conversion rate turns out to be.

    conversion rate has already been factored into epc so it's not necessary to multiply it in again.

    epc = cpa * conversion rate
    so in this scenario, since you don't know your cpa, you don't know your conversion rate either. all you know is that you'll make $0.3 on average per every click, and you have 100 clicks, so you're expected to make $30.

    this is all independent of what your cpa and conversion rate happen to be.
     
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  8. vamos rafa

    vamos rafa Registered Member

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    well i guess u misunderstood my question.
    I was simply trying to say
    I bought 100 clicks from adwords to my lander

    50 percent of the people who visit my lander or the bridge page go to the offer page (ctr 50 percent) so that means 50 clicks to the offer page or the affiliate page. I am assuming rest 50 percent bounce off my landing page and dont even go to offer page

    Now I guess since EPC is calculated on number of clicks to the offer page so if 50 people visit the affiliate or offer page and assuming epc is 0.3 so I will get 15$.

    However if my ctr is 70 percent i.e. 70 people out of 100 people which visit my landing page go to the affiliate page or offer page, then i get 70*0.3=21$

    So I can conclude as long as

    (EPC*ctr from my landing page to affiliate page) > CPC , I will profit

    Am i Wrong :( ? I am just trying to deduce a relation between CPC and EPC (considering in the case above, i am not direct linking the offer page from adwords, I am using a landing page in between)
     
    Last edited: Dec 30, 2011
  9. tacopalypse

    tacopalypse Executive VIP Jr. VIP Premium Member

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    yea i misread it. i assumed you were direct linking. since you're using a LP, there's actually 2 different "clicks" variables.

    first one is from google to your LP. second one is from your LP to the offer.
    from google you have 100 clicks. from your LP you have 50 clicks.

    so you did calculate $0.3*50 = $15 correctly; that is how much you would earn.

    the epc>cpc rule only applies if your clicks for epc and cpc are the same variable, which would only be the case when you're direct linking.

    but if you have a LP, you use 100 clicks to calculate your costs, and you use 50 clicks to calculate earnings. so you can't apply that epc>cpc rule here.

    the equation you would use is epc * ctr > cpc
    where ctr is the click thru rate of your offer, 50%

    so you would have 0.03 * 0.5 = 0.15, and that's less than your cpc of 0.2, so you lose money.

    for direct linking it's really the same equation, but your ctr for your offer is 100% since there is no LP, so it just simplifies to epc > cpc
     
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