AMS adverts – an analysis

I selected Sponsored Product ads. These allow for Automatic or Manual targeting (by means of keywords).

Using Manual targeting, I entered as many keywords as I could think of that I could link with my book (The Black Orchestra, selling price $4.99).

I created the text for my ad and set the daily spending limit at $25. At this stage, the bid price for each keyword was set at the default $0.25.

I selected the most likely keywords and increased the bid, using various values: $0.31, $0.35, $0.41, $0.46, $0.51, etc. depending on the strength of the fit.

Here are some of the keywords that turned out to be productive for my book:

  • Espionage and spy thrillers 16.03%
  • Ben pastor 10.06%
  • Daniel Silva 47.09%
  • Joseph Kanon 20.42%
  • Spy thrillers 19.24%
  • WW2 historical fiction 35.12%

The percentage figures show the Actual Cost of Sales (ACoS) for each keyword. 68% represents breakeven for eBook sales. Anything less than that represents a profit. The overall ACoS for this ad is currently 38%: For every $100 of gross income, (for eBooks) the corresponding cost of the ad is $38.

At the time of writing, the ad had been running for 33 days. It had created 717,863 impressions at a cost of $12 per day. The gross sales figure for the period was $1,000 (that’s Amazon’s income). My royalty from that is 68% = $21 per day. So my profit works out at $9 per day ($21 – $12).

Consider the royalty per book, though. The ad cost is 38% of the selling price, which comes off the Amazon royalty of 68%, leaving a net royalty of 30%.

30% of $4.99 is $1.50. Which doesn’t compare very favorably with the usual royalty per eBook of (68%) $3.39.

There are other considerations, of course:

  • I have gained 200 new readers, many of whom will buy and read my other books
  • There’s another halo effect, producing additional KU activity
  • I have seen an increase in POD sales as well. In fact the analysis above is tainted by these sales, since the gross income figure includes POD sales, and therefore the actual number of eBooks sold is lower than 200. See below*

Note that, unlike FaceBook ads, these AMS ads charge per click, not per impression. This makes a huge difference. AMS ads that produce no clicks cost nothing, so those impressions are free publicity for my ‘brand’. Even the AMS ads that produce low numbers of click without sales have value as low cost ‘brand exposure’.

AMS ads have another big advantage over FaceBook ads: They target readers directly at a time when they are browsing the Amazon book catalog, looking to buy a book. Not only that, but, with carefully chosen keywords, your ad targets readers by genre, pretty much guaranteeing a good return on investment.

Those of you who are still awake will have spotted that the ad is costing me $12 per day, although I specified a maximum of $25 per day. Getting Amazon to spend your budget can be a problem. Another problem is a time lag between spend and resultant sales.

*POD sales: Dividing $1,000 gross sales by the selling price of the eBook gives me sales of 200 eBooks, and a profit of $300. But, given that my paperback sales are usually about 10% of my total sales, I can work out the probable breakdown of my sales figures:

eBooks 153, POD 17.

The Black Orchestra paperback sells at $14.99 with a royalty of $4.26. That’s 28%. So, for paperback sales, derived from these AMS ads, at 38% ACoS, I am losing 10% (i.e. $1.50) on every POD sale. And my profit on the combination is $1.50 x 153 – $1.50 x 17 = $204.

Are you using AMS ads? Are they working for you? Let me know in the comments.


2 thoughts on “AMS adverts – an analysis

  1. Alicia Butcher Ehrhardt says:

    I’m so glad I popped by.

    I’ve been running Amazon ads since Feb., and set up all four kinds with Brian Meeks’ suggestions (he’s writing a book), but I’m getting LOTS of impressions for some of them, and few clicks, and even fewer sales (with some KU borrows, and possibly one paper sale).

    I write ‘literary’ because ‘mainstream’ has disappeared as a category completely on Amazon. I write the big book, with multiple third-person pov characters, deep psychology, and PLOT (literary is often accused of having no plot); language is carefully constrained – and yes, literary – but not allowed ot interfere with PLOT.

    I know the next step may be to rewrite descriptions and ad copy, but I’m trying to get maximum learning out of what I started with first. Right now I’m paying Amazon at about $2 to $1, but I haven’t sold enough for it to make a real difference yet (8 copies according to their accounting, of an $8.99 ebook). Seem to have a few more recent, none at the beginning, and I’ve had 300K impressions, 1500 clicks for those 8 sales. I have 28 reviews on Amazon US, only 4 in the UK. These new purchases (too few for statistics) have led to a couple of KU binge reads (my numbers are so low I can see an individual reader go through Pride’s Children in one day), but I’m still floundering at the ads.

    I’ll be reading everything you write on your blog about AMS. Thanks for the details. I have little physical energy, so it takes me a while to get to things – you’ve saved me a good deal of time. Suggestions always welcome.

    I was delighted to find your post – and will read it several times. Unfortunately (or fortunately, since I’m not competition), I write in a different category so not everything you do will work for me.

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