How to project affiliate earnings
In order to make a profit from an affiliate scheme partnership that reflects the effort and sometimes, money you put into promoting the scheme, it is vital to ensure first that the money you will be able to make will be worth the work it takes you to earn it.
Predicting your affiliate earnings using projected revenue formulas will provide guidance on how much you will earn for certain combinations of clicks or actions that you achieve for the scheme – and so, will let you know how worthwhile participation in the scheme will be, and how much money you might be able to make.
It is important to remember that knowing how to project revenue you might make from any scheme does not necessarily mean that these are the figures you will actually achieve – but if your marketing calculations formula for potential earnings does not reflect a good return on the time and possibly, money you invest in it if you are successful, the scheme will not be profitable for you.
Being able to project affiliate earnings allows you to work out what scheme or promotion will be the most profitable, and potentially produce the greatest yield – and give you a frame of reference to compare your actual earnings to and so, over time, work out how well your scheme is performing.
It is also important to be able to assess how profitable any adverts or promotions you run for your affiliate scheme is as well, by determining how many clicks you earn for the outlay you spend on adverts or publicity.
In this blog post, we will explain affiliate marketing EPC and CTR equations, look at revenue calculation formulas, and talk about how to use affiliate marketing metrics to project your potential earnings.
Affiliate marketing EPC
One of the most important affiliate marketing metrics that affiliates who earn commission per click can use to determine their future earnings formula is affiliate marketing EPC, or “earnings per click.” This revenue calculation formula tells you how much money you will earn for each click that you achieve for your affiliate scheme, and so, how much each click is worth to you, and how many clicks you need to achieve to make a profit.
Working out your EPC might seem self-evident because all you need to know is how much your scheme pays per click – but when it comes to how to calculate EPC, calculations are performed in volumes of earnings per 100 clicks, and not each individual click you achieve.
Many affiliate schemes provide information on how to project revenue for your endeavors by giving EPC information as part of their support and analytics – but remember that the figures shown as EPC will be the value of 100 clicks, and not just one.
If you want to work out how much just one click is worth, you don’t need an EPC calculator, as the maths is straightforward – just divide the value of 100 clicks by 100, to return the result for one individual click.
CTR equation calculations
CTR or “click-through rate” is another important formula to help you to project your future earnings, and determine if an advert or promotion offers a worthwhile profit for your work and outlay – and CTR equations tell you how many people click through on your advert or promotion versus how many people view or see it but don’t click.
When an advert or promotion is shown to someone, this is known as an impression – and whilst getting lots of impressions means that your ad will be seen by a lot of people, this doesn’t provide any value to you unless enough of those impressions convert into clicks.
The higher your click-through rate is, the more profit you will earn – and so calculating the CTR equation for your ads and promotions is important so that you can work out which promotions and adverts are paying their way and making you money, and which aren’t.
CTR equations are expressed as percentages, of the number of clicks you achieve versus the number of impressions of your advert or links.
To calculate your CTR, divide the number of impressions of your advert by the number of clicks it achieves – so if your advert receives 100 impressions and achieves 10 clicks, your CTR is 10%.
Affiliate marketing earnings
Achieving a worthwhile level of affiliate marketing earnings depends on achieving a high enough number of clicks per advert, and in turn, a high enough level of earnings per click to turn a profit.
Only you can determine what sort of figures will make the scheme or promotion worthwhile – and it is important to factor in not only any financial outlay you might invest in promoting your links and adverts but also your time and effort too, otherwise you are essentially working for free and simply covering your costs!
Before you sign up with any affiliate scheme, you should work out the EPC rate that the scheme pays out at first, and ensure that it will be worthwhile for you when you do achieve a high enough volume of clicks.
When you have got this far, your CTR equations will provide insights and direction on which adverts and promotions are proving profitable, and which aren’t paying for themselves or aren’t performing as well as they should be.
This will help you to avoid joining a scheme that will not turn a worthwhile profit for you, even if you are very successful with it – and it will also help you to avoid spending money on adverts that aren’t working out or paying for themselves.
The analytics dashboard provided by your affiliate scheme partners will help you to monitor and track your clicks and conversions in real time and fine-tune your promotions and efforts so that you can make the most efficient use of your time and money, to maximize your profits. You should also use analytics tools for your website and external advertisement platforms too so that you can assess and review your performance and ensure that the cost in both time and money are worthwhile and profitable.
When you first start out with an affiliate scheme, having a projection and plan in place to measure your performance against can help you provide direction and keep you on target. Knowing how much commission the scheme pays out at is not enough information on its own to tell you ahead of time if a scheme will be profitable for you – this comes down to your work and efforts in terms of targeting and converting your future audience.
However, there is just as much value in using analytics and CTR calculations to find out if a scheme simply won’t be worthwhile, even if you achieve a lot of clicks for them as there is in using affiliate metrics to find a profitable scheme. This is because this information can help to ensure that you don’t waste time and effort on a scheme that will never be profitable or worth the effort, even if you get a lot of clicks, and allows you to turn your attention to a better scheme instead.