Let’s talk about the fundamental metrics that every publisher must use in his/her work. Join us 😉
Metrics help to assess the most important aspect of traffic arbitrageHow well does the publisher cope with tasks? With metrics, you can monitor your progress, select offers, and improve your schemes.
To make it easier for you, we decided to reveal formulas to calculate the main indicators and their application in traffic arbitrage.
ROI stands for the “return on investment” index which also indicates the webmaster’s skills. It is measured in percentage, where 100% is accepted as “zero”. If the indicator is lower than 100% then you are operating at a loss. If it’s higher – your actions are net positive.
The indicator is adjustable and you can use it in investment-related spheres like business, securities deposits, traffic arbitrage, trading — anywhere expenses and profits are considered.
ROI formula is as follows: (income from promotion\promotion costs)*100%.
Let’s say you spent $200 to attract 100 leads, and you were paid $10 per each. In this case, the ROI is equal to (1,000\200)*100 = 500%.
Here’s an ROI Calculator: https://cpa.rip/roi
CPA is one of the names used in the affiliate marketing industry and the most popular payment model. CPA stands for “cost per action”. It indicates the costs of attracting a lead and a purchase, subscription, or registration.
Note! Affiliate networks sometimes use this abbreviation for the customer acquisition bid. If you see a CPA of 500 rubles in a certain offer, then this is the bid, rather than the estimated cost of customer attraction.
Like ROI, it is one of the most adjustable indicators. There are several types of CPA, for example, CPL (cost per lead) or CPC (cost per click). The formula for these metrics does not differ much from the CPA formula.
And here’s what the formula looks like: (costs\desired actions) = CPA.
If you spent $100 on promotion, attracted 7 users and only 5 of them made a purchase or completed registration, then the cost per the desired action is (100/5) = $20.
The CPA indicates if you need to optimize an ad campaign. If the cost per action increases, it means you need to change something.
CTR indicator is used for creatives and ads optimization. It indicates the frequency of clicks on an ad and is measured in percentage with no negative value.
CTR of 0% is “zero”. If you see this figure, it means that the ad has no clicks. Any higher value indicates the ratio of users who watched an ad and those who clicked on it.
Besides traffic arbitrage, the indicator can be used in SMM to assess audience involvement. With this indicator, you can also find out the ratio of likes or reposts and views. This is where the metric adjustability ends.
Here’s a simple CTR formula: (clicks\views)*100%.
If 10,000 people saw the ad, but only 500 clicked on it, then the clickability is equal to (500/10000)*100 = 5%.
You can use this metric to analyze creatives and ads. If the CTR indicator is low, it means that you need to readjust your targeting settings or change your approach.
CR stands for “conversion rate” (or “conversion” to put it simply). The indicator is used to analyze landing pages. It indicates the sales funnel performance on the landing page regarding purchase rate.
СR is measured in percentage, where 0% is considered to be of “zero” value with no negative value. It indicates the ratio of visitors and customers in percentage.
It can be used to analyze other desired actions like newsletter subscriptions, signup count, or personal data submitting.
СR is calculated by the formula: (desired actions\visitors)*100.
If 10,000 people visited the website while 300 of them “converted”, then the CR is equal to (300\10,000)*100 = 3%.
You can use it to assess the landing page performance. If the indicator is low or equal to “zero”, it means that users click on the ad, go to the website but these clicks are not converted. It might be the landing page issue, but only tests will give you the answer.
EPC is a metric for those who like to analyze every action income-wise. EPC stands for “earn per click” and indicates an average revenue per click. It is measured by value, and you’ll need it to assess the profitability of the promotion.
EPC is often used by affiliate networks to analyze each landing page’s average revenue.
It is not the most adjustable indicator used to evaluate the performance of landing pages and ad campaigns. You can compare it with CPC to determine the net revenue of each click.
EPC is calculated by the formula: (revenue\clicks) = EPC.
If you earned $1,000 for the promotion with a total of 50 clicks on the ad, then the income from each click is equal to (1,000\ 50) = $20.
EPC is relevant if the affiliate network has changed the terms or if you decided to discover a new GEO and compare promotion profit in different regions.
ARP U is the indicator of income from each user measured by value. Publishers use it extremely rarely. Most likely you will not find it in case studies or won’t hear it on webinars, but it’s an important one.
The main feature of the metric is that it counts the approval rate and indicates your profit for the desired action. ARP U is an adjustable indicator useful in verticals with the RevShare payment model.
The ARP U formula is simple: (revenue\users) = ARP U where “users” stand for leads, desired actions, or active users in case of a RevShare model.
If you earned $5,000 and attracted 300 clients, then ARP U = (5,000\300) = $16.6.
This indicator helps to calculate the approval rate, the number of rejections, and leads rejected by the affiliate network. In case 100% of the leads were profitable, then you can simply multiply this number by the payout made by the affiliate network.
In all other cases, you can use the metric to calculate the profit from each lead. If the indicator is lower than the CPA, it means that the campaign is unprofitable.
With these metrics, you can evaluate the performance of a certain specialist. Publishers use these indicators to optimize campaigns at the right time and monitor their skills.
You can use them too since now you know a lot more about them!