A Quick & Dirty Guide to AMS for Authors

Once again the main AMS thread over on Kboards has grown to the size where it’s probably intimidating to newbies. And one of the wiser members over there suggested that maybe I should just put together a quick FAQ on AMS to direct people to.

Now, remember, I wrote a whole book about AMS ads (AMS Ads for Authors by M.L. Humphrey) the last time I decided to do something like this, so brevity on this subject is not my strong suit.

But here goes.

What Are AMS?

AMS is shorthand for Amazon Marketing Services. AMS ads are a type of pay-per-click advertisement that authors can use that allow them to advertise their books in Amazon search results, on Amazon product pages, and on Kindles.

There are multiple types of AMS accounts that have different dashboards and advertising options, but most authors just open the type of AMS account they can access using their KDP account.

If you do this, there will be two types of advertising available to you: Product Display and Sponsored Product ads.

What is the Difference Between Product Display and Sponsored Product Ads?

There are a number of differences between the two ad types. They display in different locations, contain different information, and behave differently. Also, how you target the ads differs.

For the purpose of this quick and dirty overview, be sure when you’re talking to someone else about AMS that you understand what type of ad they use. Otherwise you may get “bad” advice.

How Long Does It Take For An Ad to Be Approved?

It should be approved in less than a day.

My Ad Was Rejected. Why?

Usually it’s a cover that Amazon thinks is too sexy or violent or you tried to use ad copy Amazon doesn’t like.

There’s a guide to their ad policies that it’s worth reviewing if you run into this or if you write books with sexy people or guns on the cover. And don’t use ALL CAPS in your ad. Or ellipsis. Or a double dash.

When Should I Expect My AMS Ad to Start Running?

For SP ads, immediately. You should see impressions and clicks the day the ad is approved. For PD ads…Maybe never.

I’m Seeing Sales or Page Reads, But the Dashboard Shows No Sales

That’s because there is usually a two to three day delay in the reporting of sales on the AMS dashboard. So you’ll see clicks and impressions but the sales that were generated from that won’t show for a couple days. This is why you shouldn’t use the dashboard to monitor your ads.

Also, the AMS dashboard shows nothing related to KU borrows.

If I Don’t Use the Dashboard, How Do I Monitor My Ads?

For new ads I only use the AMS dashboard to see what I’ve spent. That I believe is pretty accurate. I then compare that to the KDP dashboard and CreateSpace dashboard to determine if I’m seeing increased sales on that book. For a book in KU I will also watch the book’s rank to see if there are increased borrows.

If I’m seeing a lot of spend but not a lot of increased sales/borrows, I will shut that ad down. New ads can sometimes generate a lot of clicks but lead to no sales/borrows.

For my long-running ads…

On a daily basis, I only pay attention to those ads where I’ve maxed out my budget. So if I have a $5 budget and Amazon tells me I’ve spent it, I go look at the Amazon dashboard and CreateSpace to see if I’ve earned more than $5 on sales of that book that day. If so, I up my bid. If not, that ad is done for the day. (If you’re in KU, you should also look at your book’s rank to see if it reflects enough borrows to justify keeping the ad going.)

In addition, I look at profitability across all of my ads every time Amazon bills me. I spend enough on AMS that they bill me every ten days or so. At that point I go and compare what I spent for the period to what I earned on ebook sales, print sales, and page reads for the period. (There are some minor flaws in that approach, but it’s good enough for me.) If I’m profitable, I keep the ad running. If I’m not, I either adjust bids or shutdown the ad.

(You will be billed at least once a month for your AMS ads no matter what you spend, so you can do this at least once per month.)

You Mentioned Print Sales. How Does That Work?

AMS is very good for driving print sales in addition to ebook sales. You have to have an ebook version available to run this type of AMS ad, but they seem to do very well with print sales as well. As a matter of fact, I have a couple non-fiction titles where I get about 60% print sales to 40% ebook with AMS.

Keywords. How Many? Where Do I Find Them? What Makes One Good?

Different approaches work well with AMS. I am of the limited number of keywords, high bid, sponsored product ad school of thought. Others do well with as many keywords as they can find and low bids. So it’s really up to you.

And there are many, many places to find them. (I cover ten in my book.) Think like a reader. When you go to Amazon and look for a book, how do you search for it? I’ve found that with fiction I do best with generic genre terms and author names. With non-fiction I do best with topic-related search terms and book titles.

There is some debate about what makes a keyword a good one. For me, it’s about sales. So lots of impressions with low clicks? Bad. Lots of clicks with low sales? Bad. I want impressions that lead to clicks that lead to sales. I don’t care about visibility if it isn’t also resulting in paying customers.

(And be careful if you’re in KU because AMS ads can lead to borrows that won’t show on the dashboard, so you can see clicks but low sales on a good keyword.)

Bidding. What Should I Bid?

That’s up to you. Some choose a low-bid strategy. Some choose a high-bid strategy. I tend to be on the high bid side of things but I’ve seen people do well with the low bid side. When I say low bid I’m probably talking under 15 cents. When I say high bid I’m probably talking over 45 cents. (But those are moving targets. AMS is a bid system where you are bidding against others for that ad slot. Some genres, like romance, are more competitive than others.)

I Bid Really High. Why Didn’t It Work?

Because AMS is not a pure bid-based system. There is a relevance factor involved in how AMS evaluates your bid against others’. None of us know exactly how it works, but it’s in your best interests to have as successful an ad as you can manage if you want to win your auctions. That means you want people buying your book if you want to continue winning your auctions.

Start a New Ad or Revive An Old One?

Once more, there are different opinions on this. New ads tend to run hot so will rack up more impressions faster. If they’re working that’s great, but they can be a quick way to lose a lot of money. I prefer to keep an older successful ad running because I think that’s part of what Amazon looks at when it judges two bids against one another. But you can’t do that without maintaining that ad. (At least on the SP side of things.)

To maintain an ad, I kill off non-performing keywords, change bids, change budgets, and sometimes will pause an ad for a bit and then start it up again.

AMS Are a Nightmare. It’s All So Confusing. Why Use Them? Aren’t They Just Scamming Us Out of More Money?

I love AMS because they give me direct access to the largest ebook and print book market in the world. And they give me the opportunity to advertise my books at full price on a daily basis.

They also work for me. I make a profit running them. I have one ad right now where I spend about $125 every ten days and I make about $400 in sales.

Are all of my ads that successful? No.

Is it frustrating sometimes to have an ad stop running and not know why? Yes.

Can one competitor entering the market and outbidding me change all that tomorrow? You betcha.

But before AMS existed, that book I just mentioned? It would’ve never sold as many copies as it has.

Since I started running AMS I have seen significant improvement in sales of all of my books. That doesn’t mean I’ve sold millions of copies. I don’t write to market. And some of what I write probably only has a potential audience of a hundred people. But AMS have been a lifesaver for me.

They are what they are. Yes, sales cost more if you run them than if you had organic sales. But…Most of us are not at the stage where we get organic sales. So the choice is: pay to advertise your books or don’t sell at all. I know which I prefer.

If you want to learn more about AMS there is a thread on Kboards with lots of information and opinions: A New AMS Thread

And, of course, I did write a book on this: AMS Ads for Authors that’s only $4.99 in ebook or $10 in paperback.

It’s also now a video course, available here  and for a special introductory price until June 30th.

AMS: A Tale of Three Ads

Here is a screenshot of statistics for three of my AMS ads:

December 2017 Top 3

One is a non-fiction title, one is fantasy, one is romance. If you look at the far right-hand column, you can see that the non-fiction title has an ACoS of just 33%, the romance title has an ACoS of 255%, and the fantasy novel is at 123%.

If you were just judging the ads by ACoS you’d probably think “shut down the fantasy and romance ads”, right? I mean, if you assume a 70% payout then anything above that is losing money.

But not so fast…

There are a few things at play here that make the non-fiction ad perhaps not as impressive as it looks and the romance ad actually profitable. (In fact, all three are profitable.)

First, with respect to the non-fiction ad, AMS ads report both paperback and ebook sales. And for this particular title, paperback sales are a large portion of the sales reported. As nice as it would be to get a 70% payout on print sales, that just doesn’t happen. Which means for a title that sells predominantly in print you can’t use 70% as a benchmark. (Same goes for an ebook priced below $2.99.)

Instead, for print, you need to look at the list price of the book compared to your payout and calculate a percentage from that.

Of course, most titles aren’t clean in terms of print versus ebook sales, so ideally you’d then calculate a weighted average that takes into account approximately how much of your sales are print versus how much are ebook. (I give some examples of just how different that ratio can be in CreateSpace for Beginners. For non-fiction, I see a decent amount of print sales. For romance, I see almost none.)

So the first thing to realize about those three ads above is that the non-fiction ad is potentially not the most profitable ad on that list even though it has the lowest ACoS.

Now let’s look at the romance. With an ACoS of 250%+ it looks horrible. It looks like I’m taking a bath on that ad and just handing Amazon my money.

But another thing you have to account for with AMS ads is that they don’t include KU page reads. This particular title had about 500K page reads when it was in KU. When I crunched the numbers I found that I had about 3.3 full reads from KU for every sale. (For those of you who picked up Excel for Self-Publishers, I walk through how to do that calculation in there.)

This title was also part of a series. So when I sold book 1 with an AMS ad, a certain percentage of the time that also lead to a sale of book 2. Between KU reads and sellthrough to book 2 that ad was profitable even though it doesn’t look it.

The third ad, the fantasy ad also benefited from KU reads and sellthrough. In that case, for most of the time I was running this ad the book was the first in a three-book series with each book priced at $6.99. Now, in terms of borrows to buys, it didn’t reach the level of the romance novel. I was closer to 50:50 borrows to buys. If I’d had an ACoS of 250% on this ad I would’ve been losing substantial money. But 125% was still profitable.

Which is all an argument for judging your ads based upon the performance of the individual titles not some arbitrary number that Amazon chooses to display on its AMS dashboard.

Something else that’s not addressed in the AMS ACoS is that I am positive the non-fiction title has had sales due to its increased visibility from my running AMS that are not reflected in those numbers. (AMS are the only ads I’ve run on it on Amazon.)

And, also, I’ve noticed with the fantasy series that readers will often buy all three books at once but AMS will only count the purchase of book 1.

I will add, too, that you don’t need a lot of keywords to have a productive ad, you just need good ones. That non-fiction ad only has 66 keywords and I’ve paused some of those.

So anyway. There you have it. A real-life comparison of three very different titles and how they were each successful with AMS even though they look like they had very different outcomes.