AMS and Pricing And Experiments

About a month ago I decided to take my romance novels out of Kindle Unlimited. Not because I necessarily expected them to sell on the other platforms, but because I just grow sour on KU and how it operates at times and I think there’s a growing schism in self-publishing land that somewhat revolves around KU and I’d rather be on the “people pay for my books specifically instead of borrowing them because what the hell” side of things.

(No judgement here on anyone who chooses or feels differently and not saying that there aren’t authors in KU who have name recognition and a loyal fan base, there definitely are. If you’re making money at this, go you.)

Anyway.

One of the things I try to do when I advertise a book that isn’t in KU is to also only target books that aren’t in KU. I do this because I think it cuts down on the number of clicks without buys that my ad gets because I’m not attracting buyers who are looking for a title to borrow.

When I was going through the list of authors who’ve been good targets for AMS ads on that first romance novel, I noticed that many of those authors were priced at $6.99 in ebook. My price on that novel at the time was $4.99.

Now, if you were to go to any of the author forums and suggest that you wanted to list your romance title for sale at $6.99 as a self-published author, you’d be laughed out of the building. Who on earth is going to buy a self-published romance novel at $6.99 when they can buy a box set of twenty romance novels for 99 cents? The market just doesn’t support that. Maybe you can get away with $4.99, but $6.99? No.

Well…

It turns out there are some readers out there who will buy a self-published novel at $6.99. And that I can still run successful AMS ads on a romance novel that’s not in KU at that price point.

I’m not burning up the charts by any means, but the outcome I’m seeing is pretty much the same as when this novel was in KU and priced at $4.99. In the 30 days before I pulled the novel it had 13 paid sales at $4.99 and 21,000 page reads. (Keep in mind this is a novel that’s been out for over four years and where I only have two titles out under that name and the last novel was published two years ago.)

In the 30 days after I pulled the novel it’s had 28 sales at $6.99.

The only problem is that the ad doesn’t result in borrows/buys as often as when it was in KU at a lower price, so I’m not sure the ad will continue to run. AMS likes success and if you fail to hit that level that it deems successful, you get shut down.

I do think, though, that this highlights an important issue to think about with respect to AMS. There are a number of moving parts to running an AMS ad. One is how much per click you have to bid to have your ad shown, another is how much you have to pay for clicks on your ad, another is how many clicks to a purchase or borrow, and another is how much you make on a purchase or borrow of your book.

All four of those factors come into play in determining whether you can successfully run AMS ads long-term. It’s easy to bid really high and get visibility on a title. You might even get sales. But if you’re paying $1 per click and it takes 5 clicks to a sale and you only earn $2 on that sale, you’re very nicely losing yourself $3 per sale of your book. If you instead make $5 on that sale, you’re at least breaking even.

It seems counter-intuitive, but sometimes raising prices makes your ads more profitable. At each price point there is very likely a differing number of clicks that will lead to a sale and if you can find that sweet spot where the number of clicks needed is smaller relative to the income from a sale, you can increase profitability even if sales or the number of readers go down slightly.

Of course, you have to back that up with a good product, too, or long-term a poor customer experience will take you down. But that’s a whole other discussion…

I should also add here that when I looked at prices for fantasy novels that the price point I was seeing a lot of was $9.99, but I just couldn’t bring myself to try it, so even I have my psychological stopping points when it comes to pricing ebooks. (I put those books to $7.99 again because they actually do alright there and that is yet another pen name I am not actively adding to at the moment. Sigh.)

Big AMS Changes Ahead

In case you hadn’t logged into your AMS account yet today, it’s changed. Finally authors who access AMS through their KDP dashboard have the same metrics and display options as those who access AMS through an Advantage account.

This means you can see ad spend and sales for a period of time and not just the lifetime of an ad. (As someone who runs ads for years at a time I have to say this is a very very nice feature to have. Who knew I was up to almost 40 million impressions across all my ads? Not me.)

Also, if you ignored all my advice and focused on Product Display ads, those can no longer be created as of today and existing ones will disappear as of February 5th. (They’re being replaced with Locksreen ads which are one of the places that PD ads used to display. So looks like no more of that box right under the buy option on a book’s product page, at least not using that ad type.)

You can also now use product targeting with your Sponsored Product ads.

There’s a nice summary of the changes available here. (The link should also be available in your AMS account when you go in. Don’t be shocked when you see the new display. It may take some getting used to if you haven’t seen it yet.)

Anyway. Another day, another change.

I will say this makes the AMS video course and book less relevant. I’ll leave them up, but a lot of the mechanics section of both have now become largely outdated. I have no plans to update either one at this point.

Why Price Competition is Dangerous

The initial title for this post was going to be “Why Being an Asshole is a Poor Long-Term Strategy”, but I figured people might take offense at that for something they probably just consider good business.

Plus, my father wasn’t an asshole and I’m going to use him as an example here.

So…

Back in the 80’s my dad got into the sign business. (He’d previously been an accountant but when you need a job, you need a job. And he was one of those types of people who can pretty much do anything they put their mind to, so in a couple years he’d bought the place and then proceeded to be in the sign business until he died ten years later.)

Anyway. At the time he got into the business there were these lawn signs that most of the realty companies used. You may have seen them. They have a metal frame that sticks into the ground and are double-sided. Great for carrying around and putting in the yard of a house that’s for sale. Easy to install, easy to remove, easy to transport.

They were very cheap to make. Very.

But the sign companies at the time charged far more for them than they cost.

Which equaled opportunity when my dad entered the market, right? Hey, those can be made for something like 50 cents a pop and everyone is charging $10. If I charge $5, I’ll take all their business and still make $4.50.

(All numbers here are made up. I don’t remember them.)

Winning, right?

Until those people who’d just lost their very lucrative business undercut his $5 price. And then he undercut their $4 price. And then they undercut his $3 price. And then it got to the point where the last man at the bottom didn’t even want the business because there was no margin left in it.

Within a couple of years that entire market had collapsed and everyone was back to where they’d started but without that revenue stream.

See, this is why being the asshole is a short-term strategy. Because if your business is based on undercutting someone else’s price (or in the case that inspired this post, significantly overbidding your ad spend in a niche market), it only works as long as you’re the only one doing it.

If all other books are $7.99 and you price yours at 99 cents, you can suck up a lot of sales. Enough to make it worth it. But when everyone prices at 99 cents, then we all find ourselves in need of another job because the volume that made up for the low price goes away and all you’re left with is the low price and consumers trained to think that’s a fair price.

Same thing happens with ad bids on CPC ads. When you bid really high for ads but no one else does you have this perfect world where your ad is always at the top but what you pay isn’t near that mark. (Since Amazon at least only charges you a penny over the next highest bid.)

Problem is, that only lasts as long as you’re the only one doing it. Get three assholes doing the same thing and it’s mutually-assured destruction. Suddenly you’re actually paying that $10 per click. And when all you have is one poorly-written knock-off book to pay for that ad spend, well… Like I said. Short-term strategy.

Only question is how many people it takes out before it fails. And that can unfortunately be a lot of people.

“Pay to Play”

First, Happy Holidays! It’s already the 25th for some of you, so let me get that out there right away. (And sorry for missing other holidays that already occurred this month.) May you all be able to spend time with those you love the most.

Okay.

Now, having said that…

If I hear the phrase “pay to play” one more time I am going to break something. For those of you who don’t know, the phrase “pay to play” with respect to Amazon advertising has spread like wildfire in the last month.

People are up in arms saying that the only way you can sell books on Amazon these days is to advertise them. And that that has created a pay to play system. Some are going so far as to say that this means everyone should go wide. Or better yet, just sell their books off their websites.

At which point I start laughing uncontrollably.

Because, how do people think books sell on those other platforms? And how do they think books sell off of someone’s website?

By…wait for it…the author paying for advertising. And not even good advertising.

Here’s the thing: AMS show when people are on Amazon ready to buy books. They’re right there. Two clicks away from a sale.

What happens when you advertise on Facebook? Someone’s on there looking to see what outrageous thing their Aunt Rita said today and they see a book ad. Now they have to click on that book ad and leave Facebook to go buy that book. Are they going to do that? If they decide to and you send them to a landing page on your website now they have to click off of there to their chosen store. And then they still have to decide to buy your book.

And selling direct off your website? You’re a random stranger on the internet. How many people do you honestly think will buy from you when they don’t know you? Sure, if you’re known to a reader base, they might buy from you. And I do make the occasional direct sale here, but compared to what I sell on Amazon? Peanuts.

The self-publishing market is maturing. Which means that there is sufficient supply to meet demand. Which means that normal market factors are in play now. Five years ago people could throw a title up on Amazon, it could have a horrible cover or not cover at all, they could not do anything with it, and it could sell. That’s because there was a pool of users desperate for good content.

Those days are gone. There might be pockets of high demand like that. But overall? You need to present a good product and then find a way to get that product in front of potential readers. One good way to do that is to advertise your books.

And let me say here, too, that there are very few advertising options in the self-pub space that let you advertise for full price which in my opinion makes AMS a Godsend. But advertising books at full price is a shift in mindset that I think some self-publishers have yet to understand. So, yes, you will lose your shirt advertising a 99 cent book with AMS. Especially if you don’t have a long series with good readthrough to back up that 99 cent book. Which most self-publishers don’t.

So up your game. Write a book that’s worth paying $4 or $5 or $6 for.

Save 99 cents for mailing list promos like Bookbub. Or build up enough books in a successful series for your ads to pay for themselves.

And for all that’s holy, quit calling basic advertising “pay to play” just because some people used to get it for free.

AMS Ads Revisited

I should be writing (as always), but I only have half an hour until the pup needs fed so I figured it was a good time to revisit AMS ads.

For me they’re still profitable and the bulk of my advertising.

My same basic strategy remains the same: one sponsored product ad per book with strong bids. Not ridiculous bids, but not 20 cents a click either.

This being December my ad spend has been climbing fast. Last month was higher as well. But my overall sales are not climbing. I’m still profitable but not as profitable as I would’ve been with that same ad spend in September. It’s just that time of year when you spend more for less visibility.

It’s also because I turned back on ads for some of my books where I’d had the ads turned off due to mediocre performance. I killed those ads again a couple days ago because the lesson is the same each time: Ads work better on books people want.

Every time I get billed for AMS ads I check my ad performance. I look at what I spent on ads for that time period and compare it to what I earned on those books during the same time period. Since I get billed weekly due to my ad spend, this is really the only time I worry about ad performance. I never bother with ACoS or any of the flawed data on the dashboard. (Since moving to KDP Print I have to wait a few days after the invoice date for all print sales to be reported on the KDP dashboard, but that’s the only change I’ve made recently.)

What I find is that the same five or six ads perform very well each time while the rest are basically breakeven. Those breakeven ads stay in a range of losing me $5 to making me $5 for the time period and rarely move outside of it.

I will on rare occasions have an ad that goes more than $5 negative on me, but usually it’s just one ad. When that happens I decide whether to pause it, adjust its keywords, or adjust its bids. The ads that do that are usually for the same small handful of books.

At the end of the day ad performance comes back to the book being advertised. Books people want to buy are more profitable to advertise than books they don’t. Changing keywords or bids or ad copy helps some, especially if you haven’t aligned your ad copy with your blurb and your cover, but it’s mostly about the book and whether it looks like what people want.

What I’ve found far more successful is changing a book’s title or cover if it’s not selling well with advertising. (I changed up my cookbook’s title recently and it’s now selling much better, for example.)

I also do better with non-fiction ads than fiction right now, but it’s hard to say how much of that is because my fiction is not generally written to market and my non-fiction most definitely hits its market.

My AMS ad for my new cozy, the only fiction I have written to market, was in the negative for the first month of launch when I had deliberately high bids but now that I’ve backed those down to something more reasonable it’s mildly profitable in and of itself. So I’d say someone who writes to market in a genre like romance could make a killing with AMS ads still.

Not at 99 cents, of course. Not unless there’s a huge series behind it with good readthrough. You need to earn enough on a sale to pay for your ads and you’re competing with others who do have enough backlist to bid high for ads.

Being in KU has an advantage, too, because there’s a certain percent of people who click on an ad looking for KU titles who won’t buy if you’re not available in KU. But my best-performing ads are all for wide books. (Again, non-fiction, but no reason it couldn’t hold true if you have a fiction title that hits all of the buttons for a large reader group.)

So my bottom line on AMS as of right now? Still well worth it.

(But if others want to hate them and refuse to use them and say nasty things about them every chance they get? So be it. Less people using them means lower potential ad costs means more profit.)

(And I’d add that for those who haven’t read my book or watched the video course that while Amazon has added some bells and whistles to the ads since those were created that the core advice in both is still valid.)

 

AMS US Changes

For those of you who run AMS in the US, time to check your AMS dashboard. It seems Amazon has rolled out some new features to the AMS accounts that access AMS through their KDP account.

(If you’ve been running AMS in the UK using an Amazon Advantage account then a lot of this will look familiar to you and you’ll just be wondering why you still can’t also get filtering by time period.)

Three changes to highlight for you.

1. Keyword targeting

Up until now the only keyword targeting option for AMS if you accessed it through KDP was Broad. Now you can do Broad, Phrase, Exact, Negative Phrase, and Negative Exact. You can use these options when starting a new Sponsored Product ad as well as when adding keywords to an existing ad.

I would suggest going through any existing ads you have running and at least adding negative keywords. For example, my romances are contemporary so I can use negative keywords to exclude historical, etc. And free. That’s a big one to exclude unless you’re promoting a free book.

2. Bid+

This “Allows Amazon to increase the maximum bids in this campaign by up to 50% when ads are eligible to show in the top of search results.”

Now, really, you shouldn’t need this. Because you should already be bidding the maximum you’re willing to pay. But in the UK where bids are cheaper I do have this set because I would be willing to bid higher if I have to. In the US I’m only turning it on for a handful of low-bid ads I just started on books I’m not really focused on promoting.

Do the math for yourself. If you’re bidding 20 cents then Bid+ means maybe bidding 30 cents. But if you’re bidding $1 then Bid+ means bidding perhaps $1.50.

You can either turn this on for a new ad or go to the Campaign Settings tab for an existing ad and it’s at the bottom.

3. Bid Suggestions and Keyword Suggestions

When you start a new SP ad now, as soon as you add your keywords you’re going to see a bid range that Amazon suggests and a suggested bid within that range. I have a set of keywords where I’m pretty sure I’m the highest bid and I tried it and the suggested range did top out with my high bid. So it looks accurate to me. But I’ll also say that if everyone were to start bidding at those levels that it would not be profitable for most to do so.

I don’t think this changes bidding strategies all that much for that reason. If you could through series sellthrough and click rates afford to bid at those levels then I assume you already would be. If you’re bidding 10 cents right now there’s a reason for that and seeing that the suggested bid is $1.26 isn’t going to change that approach for you. But it’s interesting.

(I’ll say in the UK where I can run headline ads and this info is available, that for one of my keywords the bid they list to have 50% of the visibility is more than my book even costs.)

The other thing that occurs as you’re entering new keywords is that they provide a list of suggestions as you enter a keyword. (This is something already available in Advantage in the UK and I’d presume Advantage here.) I was able to use those suggestions to find a few additional negative keywords for one of my ads, so even if you don’t want to stop a good existing ad it might be worth trying just for that.

Bottom line:

It’s still not as robust as Advantage, but I’m glad to see the Bid+ option since I think that was giving an unfair advantage to those with non-KDP AMS accounts and I’m very pleased to see the negative keyword options since those have been very useful to me in the UK.

Like it or not, AMS are here to stay so time to learn and adjust to these changes. I expect some shake out in terms of ad performance over the next few months as a result of the changes, but maybe not as much as you’d think since I’m pretty sure the big players were already accessing AMS through non-KDP AMS accounts where these tools already existed.

Let’s Talk Categories

I was having a conversation in a private group yesterday that touched on categories. In this particular case the question was about what constitutes YA and what you do with a book that doesn’t fit neatly into a category. This comes up a bit in Achieve Writing Success, too, because a lot of early novels aren’t targeted to existing categories. And if you self-publish you will soon find yourself asking, “Well, where the heck do I put this?”

So let’s break this down. Categories are a kind of short-hand that indicates to readers that they’ll get a certain emotional experience or a certain type of story.

So romance, which is one of the ones where these discussions happen often, tells the reader you’re going to read about the journey two people take to find their happily ever after together. If you put a book in romance and it isn’t about that journey, you will have disappointed readers.

Mystery says there’s going to be something that is solved, most often a murder.

Science fiction says it’s going to involve things in the future.

Fantasy says it’s going to involve things that aren’t real or possible. So magic.

YA is about a coming of age journey focused on a teen protagonist who is generally around 16 years of age.

Those are all general guidelines, but there are rarely hard and fast rules. Categories exist so that I can walk into Barnes & Noble and find the three shelves worth of books I’m interested in without having to dig through all the rest. That’s all they are. A selling tool.

And so if you can write books that fit into existing categories it will be easier to sell those books. One, people who are looking for the type of book you’ve written will be able to find it easily. And, two, people who buy books in that category will get the emotional reading experience they’re looking for.

But not all of us do that. My YA fantasy series is YA (although I prefer to think of it as coming of age fantasy which is a separate category) but it doesn’t fit into any of the provided subcategories on Amazon. It’s not sword & sorcery. It’s not really epic. It’s just a little lost.

Which is why I love AMS so much. Because I can say, “I don’t what category you want to call it, but people who like Mercedes Lacky, Kate Elliott, and Anne McCaffrey are going to like this.” And then I can target them with my ads, put that cover in front of them, with a blurb about what the story covers and let that sell the book. Do I get the people browsing categories? No. But I do get the people who like those authors and might like me, too.

In an ideal world,  you write to an existing category. But if you’re life isn’t ideal, like most aren’t, then you find other ways of getting your book to the right readers. CPC ads (Bookbub CPC, Facebook, AMS) are probably the best way to do that.