Do you ever backwards check the metrics given to you by an affiliate manager or advertiser? We get approached dozens of times a day by companies wanting us to test their offers. It always amuses/angers me when they throw out ridiculous numbers that just don’t add up. For example:

Advertiser: “I have this great new offer….it pays out $8.00 on a first page submit!”

Us: “What is the conversion rate?”

Advertiser: “19%....doing fantastic!”

Us: “Ok, and what is the average EPC (earnings per click)?”

Advertiser: “Over $2.00! Isn’t that incredible?!”

Us: “Impossible! According to what you just told me earlier, the EPC should be $1.52!”

The key here is that only two of the three variables are needed to figure out the last. Here are the formulas to figure out each:

EPC = Conversion Rate * Payout / 100
ex: 19 * 8 / 100 = 1.52

Conversion Rate = EPC * 100 / Payout
ex: 1.52 * 100 / 8 = 19 (19% conversion rate)

Payout = EPC * 100 / Conversion Rate
ex: 1.52 * 100 / 19 = 8 ($8.00 expected payout).

My Favorite equation of the three is the Payout. Using that formula, you can calculate the optimal payout you should be receiving based upon the numbers given to you.

Using these equations, you can ensure that you are getting accurate information from advertisers/marketers and also that you are getting the highest payouts possible!