AMAZON MARKETING SERVICES FOR KDP
My post will include both the benefits and challenges of using Amazon Marketing Services (AMS) to advertise Kindle e-books.
I don’t intend for my title to imply that it will give instant success to all books. It won’t.
I will begin with what I like about AMS—for which there is much—and then I will address some of the challenges and offer tips for attempting to use it effectively.
A few years before AMS was introduced to KDP, I had discovered the Amazon Media Group. Many big vendors for a wide variety of products have used and continue to use the Amazon Media Group’s advertising services.
I had a conversation with the Amazon Media Group about their advertising services several years ago about possibly running an advertising campaign for one or more of my books.
This was before indie authors had the opportunity to advertise directly on Amazon using AMS via KDP Select.
The problem was that the minimum campaign budget was $10,000. If I recall correctly, an ad would generate 10,000,000 impressions over the course of a month.
If you achieved a typical click-through rate (ctr) of 0.1%, you would net 10,000 visitors to your product page. If you achieved a better than average closing rate of 10%, you would net 1000 sales.
But then you would need to earn $10 per sale just to break even.
And if your ctr was below average, or if your closing rate was 1% to 5%, which isn’t uncommon for e-books, and if your royalty was around $2 to $3 per book, you could easily lose thousands of dollars on the deal.
I didn’t place an ad back then because it was very high risk. I’ve since heard stories of a few authors who shelled out the big bucks for a campaign back in those days who lost big.
That’s one reason I love the AMS option for Kindle e-books.
A minimum campaign budget of $100 is tiny compared to $10,000. AMS made advertising accessible to KDP authors. (It used to be just for KDP Select, but now it’s for all Kindle e-books.)
It’s much lower risk now. It basically wasn’t an option before, as most authors didn’t know about it and those who did generally couldn’t afford it (even if they had the funds, the risk was high).
And you don’t even have to spend the $100 budget. You can pause or terminate your campaign at any time, keeping any losses to a minimum. (Though there are reporting delays, so even after you end a campaign, for several days it can continue to accrue costs. By not bidding too high, you minimize this risk.)
Every author naturally wonders if advertising will help. Now by publishing an e-book with KDP, you can find out, and it doesn’t cost too much to see the results (provided that you don’t get impatient and bid too high). Then you won’t have to wonder if advertising is the answer you’ve been searching for: You’ll know firsthand.
Here’s another thing I love about AMS.
You can advertise your Kindle e-book right on Amazon itself.
That’s prime real estate.
People who see your ad are already at Amazon, shopping for products, with their wallets out, ready to make a purchase.
When you advertise your book anywhere else, your ad is basically asking people to stop whatever they are presently doing, leave the website they’re currently at, and visit Amazon to shop for a book.
For several years, indie authors have pleaded for a reasonably priced advertising option at Amazon.
Well, here it is.
What AMS is and what it isn’t.
Advertising with AMS via KDP is an opportunity. It’s a tool.
Like the opportunity to self-publish on Amazon itself, and like all other marketing tools, some authors and some books will utilize it more effectively than others.
It will work well for some books, okay for some books, and poorly for others.
What AMS isn’t:
- It’s not a magic genie.
- It won’t yield instant success for each and every book. (But for some books it will help.)
- It probably isn’t the solution for a book that hasn’t been selling on its own. (But you sure can find out.)
- It’s not guaranteed to provide a positive return on investment (ROI).
If AMS were guaranteed to yield 100% ROI, every author would use it, and then we might as well wrap up every customer in the world with wallpaper packed with Amazon ads.
Using AMS effectively comes with some challenges.
AMS won’t bring instant, automatic success to most books.
But for many books, there exists some beneficial way to use it effectively.
Here are the challenges:
- Landing a decent impression rate when many other authors are also running ads for similar books.
- Not bidding more than you can afford to bid.
- Getting a strong conversion rate.
- Earning a positive return on investment (ROI).
Too many authors don’t use AMS as effectively as they could:
- Blindly using KDP’s recommended bid, which is fairly high.
- Impatiently raising the bid.
- Not running enough controlled experiments to learn how to optimize the variables.
- Not using enough creativity with targeting methods.
- Bidding more than they can afford to bid.
- Not being content with a low impression rate, if that’s all you can afford and manage to get out of it.
I see many authors make one or more of these mistakes, and then terminate their campaigns.
But you don’t need to terminate your campaign. Your last resort is to greatly reduce your bid and accept whatever impression rate you can afford, even if it’s meager. It may not be what you want, but if it doesn’t yield a negative ROI, even rare impressions are better than nothing, and you only pay for clicks.
On top of this, your ad is competing against authors who have a distinct advantage:
- Series authors have the potential to generate multiple sales from a single click. They can afford to bid higher, banking on those future sales.
- Authors with several similar books also have the potential for multiple sales. They can also afford to bid higher.
- Successful authors know they will have ample royalties from regular sales even if the ad performs poorly. They are playing with the house’s money, so to speak.
- Some authors use advertising for other purposes besides immediate profits. They might bid higher, not minding a short-term loss, with their sights set on branding or building an initial fan base.
And then your ad also competes against newbie authors who don’t have an advertising advantage, but who bid much higher than they should.
Here are suggestions for how to optimize AMS advertisements.
My first tips are:
- Be very, very patient.
- Bid very low to begin with.
- Always wait a few days before raising your bid to allow for possible reporting delays. Even better, wait a week.
- Only raise your bid very slightly. I’m talking pennies.
- Don’t be in a hurry. Waiting diminishes your risk, and makes it easier to assess what may or may not be working.
- Run multiple campaigns for the same book.* With one campaign, use narrow targeting where customers are very likely to be interested in your book. In an experimental campaign, try to be a little more creative with your targeting, thinking of other kinds of books or non-book products which are likely to appeal to your target audience.**
- Your bid isn’t the only factor, or necessarily the most important factor, in landing impressions. Amazon measures ad performance. Good targeting and product page appeal can improve your ad performance. If you get a strong initial click rate, your ad can generate more impressions at a lower bid. This is one reason that raising the bid often isn’t the solution. Instead, you should strive to improve your targeting and improve your product page to help improve on ad performance metrics.
* Don’t worry: Your campaigns won’t bid against one another. Any campaigns on your KDP account won’t bid against any other campaigns on your same KDP account.
** Beware though that if the targeting isn’t relevant enough, if you get fewer than about 1 click per 2000 impressions, your campaign is likely to be stopped by Amazon. This doesn’t mean you can’t explore though.
Following are some more tips:
- Don’t use ellipsis (…) or hyphens (-), for example, in your advertising phrase as these might be considered grammatical errors (!), preventing your ad from displaying on Kindle devices.
- Read your ad approval email carefully, just in case there are any notes about your ad not being displayed on certain devices.
- Experiment by running additional ad campaigns. Explore your targeting options. Analyze your data. Try to find the magic combination that will help you learn how to advertise more effectively.
- If you’re getting fewer than 1 click per 2000 impressions, it probably means that either your targeting isn’t a good fit for your book or you cover isn’t attracting your target audience. Challenge yourself to improve your click-through rate. Although you don’t pay for impressions, this is a sign that your ad could perform better.
- If you’re getting fewer than 1 sale per 20 clicks, it probably means that either your product page doesn’t match customers’ expectations based on your cover or advertising phrase, or that your product page isn’t closing the deal as effectively as it could. Maybe it’s the blurb or the Look Inside, for example. Challenge yourself to make your product page more effective.
- If your impression rate is very slow for a couple of weeks, it could be a sign of poor scoring on ad performance metrics. If your initial click rate is low, try pausing the ad and running a new one in its place. But it could also mean that you should try to improve your targeting relevance or improve your cover or product page appeal or keywords or categories. You have so many variables to play with, it can take a while to learn how to optimize them.
- You could have a higher ROI than you realize. The ad report currently doesn’t show Kindle Unlimited borrows or paperback sales. Customers may also buy other of your books in the future. If you can just break even, approximately, it will probably be worth it in the long run.
- You don’t have to spend the whole $100 minimum budget. You can pause or terminate your ad at any time. If you’re losing money with your ad, don’t be afraid to stop it. But realize that due to reporting delays, you may continue to accrue clicks for several days after stopping your ad. The lower your bid, the less your risk. (If you bid very high, you can blow your whole budget long before it shows in your ad report. Another reason to bid low and exercise patience.)
- Note that you can now copy an ad to preserve your original targeting when placing a new ad.
- Avoid pausing or terminating an ad that’s performing well. An ad that’s generating good results has a high score on ad performance, and it’s hard to rebuild that ad performance. If things are going well, don’t touch your ad with a ten-foot pole. Well, you should edit the end date as needed so that the ad doesn’t expire.
- Note that product targeting doesn’t actually target the products that you select. Rather, it targets customers who have browsed for similar products in the past. So if you target sci-fi books, your ad could show up on a romance page. If so, it means that the customer has viewed both romance and sci-fi books (at least once) in the past. Still, by targeting sci-fi books, your ad is being shown to customers who have viewed other sci-fi books in the past.
What do I know about advertising through AMS?
How do I know? Fair question:
- I have placed over 100 ads through AMS via KDP over the past 14 months.
- It took me a few dozen tries to get it to really work, but overall my last 70 ads have done well on average.
- One ad has generated over 6,000,000 impressions and 3,000 clicks at an average cost of $0.28 per click.
- I have several ads (more than 25) which each have accumulated over 1,000,000 impressions.
- Overall, AMS has worked very well for me.
This doesn’t mean that you will have instant success with advertising. I’ve tried to share tips that I’ve learned from my experience, but you will likely need some experience of your own.
There is something to gain no matter what.
Even if your ad loses money:
- You get information about what percentage of visitors to your product page actually make a purchase. This is valuable information. 10% is well above average. Strive for that. At around 5% or below, you know firsthand that your product page has room for improvement. Knowing that the best covers, blurbs, and Look Insides can close 10% of the time gives you a lofty target.
- You discover that advertising wasn’t the magic answer you had been hoping for. At least you learned it’s something else. Is it your cover? blurb? Look Inside? Maybe the idea just isn’t marketable.
- If you change your cover, blurb, or Look Inside, by running a new ad, you could invest a little money to get valuable data: You can find out whether or not the changes you made improve your closing rate (sales divided by clicks).
- Although you should terminate an ad that’s losing money, you did get your cover and name out there, and you did get visitors to your product page. This is branding. You at least have hope for a few future sales. And if your ad drew in short-term sales, maybe a few of those customers will buy more of your books in the future, or even recommend your book to others. You gained some hope, if nothing else.
Advertising with AMS is relatively low risk, especially if you bid low and keep a close eye on your reports, prepared to exit early if need be.
Write happy, be happy.
Copyright © 2016
Chris McMullen, Author of A Detailed Guide to Self-Publishing with Amazon and Other Online Booksellers
- Volume 1 on formatting and publishing
- Volume 2 on marketability and marketing
- 4-in-1 Boxed set includes both volumes and more
- Kindle Formatting Magic (coming soon)