"Effective Cost Per Click," or eCPC, is a metric used by Internet marketers to gauge the effectiveness of their online campaigns. Sometimes it is referred to as estimated cost per click. It is calculated by the total earnings generated by online advertisements, and the number of clicks it took to develop those earnings. A formula might look like this:
eCPC = Earnings/Clicks.
Using eCPC as a statistic in your online advertising campaign is important because it helps monitor the profitability of your clicks. When using affiliate marketing, if the eCPC of a campaign is $0.85 and you can purchase advertising on Facebook for $0.26 CPC, the potential profit is $0.59 per click. This formula would look like this:
eCPC - CPC = Profit.
Using conversion rate or payout alone to select an offer is not wise. Choose an offer using eCPC as part of your evaluation, letting the campaign history be your guide. When buying advertising, a low CPC is good. When choosing a campaign, a high eCPC is best.
While nothing is guaranteed, tools are available from Facebook, Google Adwords, MSN and most other advertising platforms to help you understand the amount of clicks you could send to your campaign. Using this estimate, a formula for estimating earnings might look like this:
Clicks * eCPC = Earnings
You can use eCPC to calculate the eCPM of a campaign, just in case you buy advertising on the CPM, or cost per thousand impressions, model. It's necessary to know the conversion rate of the campaign, however, in order to calculate this rate. The formula looks like this:
eCPM = eCPC * Conversion Rate * 1000