Amazonian Advertising Practices: Part 2

I’ve said it before, and I’ll say it again: There’s a lot going on this week. Hence some daily posts. Today’s topic of choice? More on Amazon’s Advertising System.

So some of you may remember my first post on this topic a few months ago. I’d taken the plunge, using my tax return to pay for Amazon Advertising Services to see exactly how it would shake out. I had to use the tax return for it, because Amazon is paid up front, but any earnings you make are, as expected, royalties. So while you may spend $50 to make $50, you will still have several months to go before that $50 rolls back into your bank account.

Anyway, I’m not going to spend time reiterating exactly how AMS functions, since I gave it a long-form explanation last time. The basic gist of it is that you set up advertising keywords that describe your product (for example, one of Colony‘s keywords is “Expanse” because of its similar genre to The Expanse) and then a bid for that advertising spot. Your bid wins while someone is looking at that product? That individual sees your product, and if they click on it, whether or not they purchase it, you pay the bid.

Anyway, after a month of using it, I’d come to some tentative conclusions, which at the time were that many people who found it balanced out pretty much neutral were right. I was earning back pretty much exactly what I put in, plus or minus a few bucks here and there. Which I found odd, as even if my numbers jumped around quite a bit, they still somehow wound up around 100% in and out.

I’m still not sure why that is. But I can report that with lots of careful fine tuning, several months in, the venture is a little less neutral.

Granted, the emphasis on lots there is deliberate. I’ve been slowly fine-tuning the advertising for Colony, tweaking each bid slowly but surely until it finds and optimal point. Right now, I know from experimentation that if I were to drop one bid from 23 cents to 19 cents, my daily revenue would drop to a quarter of the daily average.

That’s right. A quarter. Raise that one value back up to 23 cents … and boom. Success.

And that success, repeated across dozens of keywords, has started switching that AMS 100% equal rate to something a bit closer to 50%. By which I mean: I spend five or six dollars, I make ten back.

Except that’s not entirely accurate, and I think I see what Amazon does their system the way it does now. I still wouldn’t be surprised if Amazon, on their end, does try to keep things a little balanced. Because that 50-60% ratio I’m getting? It ignores two things: Browse and decide, and Kindle Unlimited reads.

What are those? Okay, let me explain. Browse and decide is what I call people that see the ad, or click through, but then don’t buy it because they check out a few more books before deciding to grab one of mine. Amazon doesn’t count those as “sales” from the AMS system (as far as I know). All they know is that someone clicked the ad and went elsewhere. But if that person comes back (or searches for the book and buys it), then their sale is just a “sale” rather than one driven by your ad. So that doesn’t count toward  the AMS count of “sales made.”

Kindle Unlimited, on the other hand, is Amazon’s ten-dollar a month subscription service that’s basically “Netflix for books.” Subscribers can read any book on the service as many times as they want or as often as they want, and Amazon counts the pages read and pays the author based on a per-page rate that’s around a half a penny a page (terrible for authors writing short, quick stuff, but awesome for writers like me that write titan-length Epics).

Anyway, if someone finds and clicks the ad for my books and then reads it on KU? AMS doesn’t track that either. And to be perfectly honest, I’ve seen a vast climb in my KU reads since I started using AMS. There’s still a cost to be considered, since I’m paying for each click on one of my ads, but AMS doesn’t count it as a sale, nor do they count the money I make off of KU as revenue for purposes of “Hey, here’s how much money you’re making after advertising.”

What am I getting at? That 50-60% rate currently, isn’t all that accurate. And yes, it’s taken a lot of careful fine-tuning to get there, and yes, I even have to watch it carefully. That week when #SaveTheExpanse was all over the news? I actually turned off Expanse-related keywords after a few days, because people looking for The Expanse were finding my book but not interested in it because they wanted this book everyone was talking about. Clicks on my book went way up … but sales did not. I think I spent around $10 without a single sale over a short period of time before I wised up to what the connection was.

But even with all that daily watching, I still have moved that profit up much higher. Last month? I “made” (remember that royalties are deferred by two months, basic accounting) almost four times what I spent. Granted, that number is a little flexible, because I can’t account for how many people start reading KU from the ads versus word-of-mouth. But judging from my numbers, one way or another it’s been a good thing.

So, four-plus months into using AMS, how is it? Well, it does appear to work. But there are caveats.

First, you have to have the money to spend on it several months up front. If you do not have a disposable income, this is not going to work for you. It will be several months before you see any return on your “investment.” And if it doesn’t return, you need to be able to lose that money without fear.

Second, you need to have a good product. I have zero doubts that Colony would be doing quite so well with this program if it wasn’t already a stellar book. Yes, there’s the whole difficulty folks face these days of not trusting reviews, but at the same time, a good product stands tall. If you want to make a good return on advertising, a shady product can be sold at a boom … but only until word gets around.

Third, you have to be prepared to really fine-tune and monitor your AMS system for a while before you can let it be. Figuring out good key-words, then figuring out what bid to make for each keyword and how much you’re willing to spend … It’s all part of making it work.

But if you can do all those … is it worth it?

Well, I’d venture to say yes. At least so far it’s working. It’s taken some careful trial-and-error experimentation, but it has worked. I’m now making a profit from it, and a good one as well. Will it stay that way? Well … time will tell.

I’ll get back to you in another five months.

In the meantime, if you’ve not had a chance to yet, check out Shadow of an Empire!

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