Metrics help assess the most important aspect - how well an arbitrageur is performing.
With their help, one can monitor progress and development, select offers, and develop combinations.
To make it easier to use them, we have decided to explain the formulas used to calculate the key indicators and how to apply them in arbitrage.
With their help, one can monitor progress and development, select offers, and develop combinations.
To make it easier to use them, we have decided to explain the formulas used to calculate the key indicators and how to apply them in arbitrage.
ROI
Return on Investment (ROI) and Webmaster Coolness Factor are measured in percentages, where a value of 100% is considered breakeven. If the indicator is below 100%, it means you are operating at a loss, and if it is above 100%, you are in profit.
This indicator is flexible and can be used in any investment-related direction. Whether it's business, investments in securities, arbitrage, or trading—any field that involves expenses and profits.
Formula: (Income from Promotion / Expenses on Promotion) * 100%.
This indicator is flexible and can be used in any investment-related direction. Whether it's business, investments in securities, arbitrage, or trading—any field that involves expenses and profits.
Formula: (Income from Promotion / Expenses on Promotion) * 100%.
Correct! In the given scenario, if you spent $200 to attract 100 leads, and you were paid $10 for each lead, the ROI would be calculated as follows:
(1000 / 200) * 100 = 500%
So, in this case, your Return on Investment (ROI) would be 500%.
(1000 / 200) * 100 = 500%
So, in this case, your Return on Investment (ROI) would be 500%.
CPA
One of the terms in the field of affiliate marketing is Cost per Action (CPA), which is also the most popular method of payment. In translation, it means "price for a completed action." It represents the expenses incurred for attracting a lead and for that lead to perform an action such as making a purchase, subscribing, or registering.
Important note: Affiliate networks sometimes use this abbreviation to indicate the payout for acquiring a customer. If you see that the CPA for a specific offer is 500 rubles, it represents the payout rate, not the presumed cost of acquisition.
Like ROI, CPA is one of the most flexible metrics. It has several subtypes, such as Cost per Lead (CPL) or Cost per Click (CPC), which represent the price for acquiring a lead or click, respectively. The formula for these metrics is the same as for CPA.
Here is the formula for CPA: (Expenses / Number of Targeted Actions) = CPA.
Important note: Affiliate networks sometimes use this abbreviation to indicate the payout for acquiring a customer. If you see that the CPA for a specific offer is 500 rubles, it represents the payout rate, not the presumed cost of acquisition.
Like ROI, CPA is one of the most flexible metrics. It has several subtypes, such as Cost per Lead (CPL) or Cost per Click (CPC), which represent the price for acquiring a lead or click, respectively. The formula for these metrics is the same as for CPA.
Here is the formula for CPA: (Expenses / Number of Targeted Actions) = CPA.
If you spent $100 on promotion, attracted 7 users, and only 5 of them made a purchase or registration, then the cost per action would be calculated as: (100 / 5) = $20.
This metric helps evaluate whether the advertising campaign needs optimization. If the cost per action is increasing, it indicates that something needs to be changed.
This metric helps evaluate whether the advertising campaign needs optimization. If the cost per action is increasing, it indicates that something needs to be changed.
CTR
The metric you are referring to is Click-Through Rate (CTR), which is used to optimize creatives and advertisements. It is a ratio that reflects the frequency of clicks on an ad. It is measured in percentages, and there are no negative values.
A CTR of 0% is considered as the baseline, indicating that no one is clicking on the ad. Anything above 0% represents the ratio of users who viewed the ad to those who clicked on it.
In addition to arbitrage, this metric can be used in social media marketing (SMM) to assess audience engagement. It can help determine the ratio of likes or shares to views. However, the flexibility of the metric ends there.
The calculation is straightforward, using the formula: (Number of Clicks / Number of Impressions) * 100%.
A CTR of 0% is considered as the baseline, indicating that no one is clicking on the ad. Anything above 0% represents the ratio of users who viewed the ad to those who clicked on it.
In addition to arbitrage, this metric can be used in social media marketing (SMM) to assess audience engagement. It can help determine the ratio of likes or shares to views. However, the flexibility of the metric ends there.
The calculation is straightforward, using the formula: (Number of Clicks / Number of Impressions) * 100%.
If a post was seen by 10,000 people and received 500 clicks, the click-through rate (CTR) would be calculated as: (500 / 10,000) * 100 = 5%.
Use this metric to analyze creatives and advertisements. If the CTR is low, it indicates that you may need to adjust your targeting settings or approach to creatives.
Use this metric to analyze creatives and advertisements. If the CTR is low, it indicates that you may need to adjust your targeting settings or approach to creatives.
СR
Conversion Rate, also known as "conversion," is a metric used in landing page analytics. It reflects how effectively the sales funnel on a landing page leads a user to make a purchase.
It is calculated as a percentage, and 0% is considered the baseline— the conversion rate cannot fall below this value. It represents the ratio of visitors to customers in percentage terms.
The metric can be used not only for conversions but also for any other desired actions, such as newsletter subscriptions, registrations, or providing personal information.
The formula for calculating the conversion rate is: (Number of Desired Actions / Number of Visitors) * 100.
It is calculated as a percentage, and 0% is considered the baseline— the conversion rate cannot fall below this value. It represents the ratio of visitors to customers in percentage terms.
The metric can be used not only for conversions but also for any other desired actions, such as newsletter subscriptions, registrations, or providing personal information.
The formula for calculating the conversion rate is: (Number of Desired Actions / Number of Visitors) * 100.
If a website had 10,000 visitors and 300 conversions, the Conversion Rate (CR) would be calculated as: (300/10,000) * 100 = 3%.
Use it to evaluate the effectiveness of landing pages. If the conversion rate is low or zero, it means that users click on the ad, visit the landing page but do not convert. The issue may lie with the landing page, and further testing can pinpoint the specific problem areas.
Use it to evaluate the effectiveness of landing pages. If the conversion rate is low or zero, it means that users click on the ad, visit the landing page but do not convert. The issue may lie with the landing page, and further testing can pinpoint the specific problem areas.
EPC
Earn per Click (EPC) is a metric for those who like to track every action in terms of revenue. It represents the average earnings generated per click and is measured in monetary terms. It is used to assess the profitability of promotion.
It is often used by affiliate networks to show how much, on average, each click on a landing page brings in terms of revenue.
EPC is not the most flexible metric, but it is useful for evaluating the effectiveness of landing pages and advertising campaigns. It can be compared with Cost per Click (CPC) to determine how much you earn per click "net."
The calculation formula for EPC is: (Earnings / Number of Clicks) = EPC.
For example, if you earned $1000 from your promotion and had 50 clicks on your ads, the earnings per click would be: (1000 / 50) = $20.
EPC is relevant when a partner company changes its working conditions or when you decide to enter a new geographical region and compare the profitability of promotion in different areas.
It is often used by affiliate networks to show how much, on average, each click on a landing page brings in terms of revenue.
EPC is not the most flexible metric, but it is useful for evaluating the effectiveness of landing pages and advertising campaigns. It can be compared with Cost per Click (CPC) to determine how much you earn per click "net."
The calculation formula for EPC is: (Earnings / Number of Clicks) = EPC.
For example, if you earned $1000 from your promotion and had 50 clicks on your ads, the earnings per click would be: (1000 / 50) = $20.
EPC is relevant when a partner company changes its working conditions or when you decide to enter a new geographical region and compare the profitability of promotion in different areas.
ARP U
Income per User (ARP U) is a metric that measures the revenue generated per user and is calculated in monetary terms. It is rarely used and is unlikely to be encountered in case studies or webinars, but it is still important.
The main feature of this metric is that it takes into account approval rates and helps determine how much revenue you are earning per desired action. It is a flexible metric and is particularly useful in verticals with RevShare payouts.
The formula is simple: (Income / Number of Users) = ARP U. The number of users can refer to the number of leads, desired actions, or active users if RevShare is involved.
For example, if you earned $5000 and acquired 300 customers, the ARP U would be: (5000 / 300) = $16.6.
This metric helps calculate approval rates, the number of rejections, and leads that were not accepted by the partner company. If 100% of the leads generate profit, you can simply multiply their quantity by the payout from the partner company.
In all other cases, use this metric to calculate the profit per lead. If the ARP U is lower than the CPA, it means the campaign is operating at a loss.
The main feature of this metric is that it takes into account approval rates and helps determine how much revenue you are earning per desired action. It is a flexible metric and is particularly useful in verticals with RevShare payouts.
The formula is simple: (Income / Number of Users) = ARP U. The number of users can refer to the number of leads, desired actions, or active users if RevShare is involved.
For example, if you earned $5000 and acquired 300 customers, the ARP U would be: (5000 / 300) = $16.6.
This metric helps calculate approval rates, the number of rejections, and leads that were not accepted by the partner company. If 100% of the leads generate profit, you can simply multiply their quantity by the payout from the partner company.
In all other cases, use this metric to calculate the profit per lead. If the ARP U is lower than the CPA, it means the campaign is operating at a loss.
In conclusion
Metrics are essential for evaluating and calculating the effectiveness of specialists' actions. Arbitrageurs use similar indicators to optimize campaigns in a timely manner and track skill growth.
Utilize them as well, now that you have gained a better understanding of these metrics!
Utilize them as well, now that you have gained a better understanding of these metrics!