Some Random Advertising Thoughts

Once a month I load all my sales reports into an Access database and then proceed to generate a bunch of different reports and graphs to see where I am. For me that’s as fun as the writing so it’s never something I have to force myself to do, but I do think some sort of analysis is important to anyone working to run a writing business. (As opposed to just writing books and seeing what happens.)

So a few thoughts from the most recent analysis.

One of the metrics I was looking at this time around was the percent of revenues that was spent on ads for each series.

So let’s say I have a series that earned $10,000. And I spent $3,000 to make that amount. Then my ad spend would be 30%. That to me is an acceptable cost of doing business.

But I had a few that were higher than that. When that happens I think it’s important to dig in deeper and ask why, because understanding that why is going to drive what needs to happen to fix it.

In one case, it’s increased competition which means I can either hang in there and take the additional costs and know I’ll earn less on each sale of that series or I can step back and let the big spenders take part of my share of that market. Which way I choose to go will depend on how committed I am to that series and how committed I think those competitors are to entering that market.

In another case though, it’s because the series simply isn’t developed enough yet. The more books that readers can go to after an initial purchase, the more effective the ad spend.

For example, if I spend 75 cents to make $1 on the sale of a book and that book is all I have then my ad cost is 75% of the money I receive, which is higher than I ideally want. (If I could scale that sufficiently it’s doable, but the question is how much you can scale.)

But if I spend that same 75 cents and make $1 on that book sale plus $2 on two other book sales then my ad cost for the same ad spend and same initial transaction is only 15%. Much better.

Which means that often what seems like “I should abandon this and move on because I can’t make money at this” is actually “I need to write more books in this series so I can properly recoup my ad costs.”

Of course, there’s another option which is that something is off about the book that needs to be fixed to make it sell better.

Let me give a concrete example. I published a cookbook a while back and being too clever for my own good I called it “You Can’t Eat the Pretty” because it wasn’t about fancy cooking it was about cooking for yourself without burning down your kitchen.

But advertising that book was like pulling teeth. Every sale was a struggle. I thought the cover was good. I thought the content was good. But it barely broke even. Ad cost was probably 90% of money received.

So I changed the title. It’s now called “Quick & Easy Cooking for One”. I made one edit to one line of text in the introduction and changed the title but kept everything else the same. This year ad cost is 26% of money received.

That’s not the only time I’ve retitled a book and seen significant improvement in sales.

It isn’t always going to be the title. It could be price. It could be the cover. It could be the blurb. It could be the category. It could be who you’re advertising to. All of those deserve a hard look if you’re spending too much to sell your book.

And then you have to decide if you’re willing to make that change. Sometimes you won’t be. My YA fantasy books are currently at $7.99 each in ebook. I could probably sell more at a lower price point, but I’m okay with where they are at the moment. I can drop those prices when I finally release a new book under that name.

The key I think is to make these choices deliberately instead of just letting things ride and hoping for the best. Especially as we enter a maturing market.

I saw a flare up recently of “oh Amazon hates us and pits us against each other” when in reality it’s just that this is a maturing industry. Ironically we are trending back towards publishing houses even on the indie side. Because that’s an effective model for running a publishing business. And people are going to be less open about what works because there’s enough supply now to meet demand and we are in fact competing with one another for customer attention and customer funds.

Which leads me to another discussion that recently happened on one of the author forums that I wanted to address here.

Someone shared AMS numbers where their ad dashboard showed let’s say $90K in sales and $45K in ad spend. And someone else on that board somehow extrapolated that spend to the person running their business with a 90% ad cost, which was horribly inaccurate.

I wanted to walk through why that is. So let’s talk about what happens when you advertise.

One, your product is seen by new people. Someone becomes aware of your product even if they don’t buy it right then. That means an ad today results in a purchase a year from now.

Two, there’s direct sales. So in the case of AMS and how those are reported a $5 ebook sale means $3.50 received and $5 in sales showing on the ad dashboard.

Three, there’s follow-on sales. So if you run an ad on book 1 then (hopefully) a certain number of people will either immediately or eventually go on to buy other books from you. The more other books you have that are related to that first book and the more people like that first book, the more you will earn in follow-on sales. This is key. It’s what determines the winners from the losers probably 95% of the time.

Four, there’s another form of increased visibility if as a result of your ads your books do well enough to make a top 100 list somewhere or to be recommended by Amazon in one of their emails. These aren’t direct sales that will be reported on your AMS dashboard nor are they likely to be seen during a promotional period, but they are sales that resulted from that ad.

Five, specific to books advertised via AMS that are in KU, there’s the fact that the dashboard doesn’t show KU borrow revenue so each sale that’s seen on the dashboard can represent much more revenue. For example, my romance books tend to be 75% borrow revenue when they’re in KU.

So let’s work through this a little.

Say I pay $2.50 to get that first sale that’s worth $3.50 to me. That looks on the surface like I spent 71% of the money I received on advertising.

But if that book is in KU and 75% of its revenue comes from borrows then that $3.50 on the dashboard may represent $14 in revenue. In that case, then only 18% of money received was spent on ads.

What if the book isn’t in KU but is part of a five book series? And what if one purchase of book 1 means an additional $7.50 earned on sales of the other books in the series? Then in that case the ad spend is only 23% of money received.

Someone who looks at AMS dashboard numbers and doesn’t understand the impact of KU borrow revenue or follow-on sales is going to significantly overestimate the cost of those AMS ads to the user. Not to mention the visibility-driven sales which are almost impossible to quantify.

Which brings me back to the need to look at your numbers on a regular basis.

I look at total money received (which I call revenue for my purposes but technically isn’t since all the platforms take their cut before they send me a check) versus ad costs for each period for each title. I also do that by series and author because sometimes a loss leader first-in-series title can look horrible on its own even though it’s driving great sales for a series.

I also look at total profit and loss for each title, series, and author which incorporates cover cost, editing, etc. And I take that profit and loss number and calculate per hour and per word rates as well. (And when I get really bored I do a per hour or per word rate per day since the book was released since the longer a title is out the higher the total per hour and per word rate should be so you have to find a way to account for that difference between a title released this year and one released five years ago.)

But you can’t stop there. You have to put business knowledge on top of all of that. You have to ask why the difference between different titles. What can look bad today may actually be trending well. And what looks good today may not continue to look so good long-term. So you have to interpret the numbers properly.

You do all that and then you hope for the best.

There are no certain answers in this business (or in any business really.). All you can do is reassess after a bit, adjust, move forward again, and hope for improvement each time. If that happens, eventually you’ll get there.

Easy AMS Ads 2019 Edition

I hadn’t intended to update Easy AMS Ads because the pace of change with respect to AMS last year was so fast and furious it seemed like an impossible task to keep the book updated. But things hit a critical mass this month and I decided I either needed to update the book or unpublish it entirely because so much has changed with AMS in the last twelve months.

And since I’d just published the last cozy and needed a project before I started the next one, I figured why not go ahead and update the book.

So…

Easy AMS Ads – 2019 Edition is now live in ebook format and will soon be live in print as well. This one has some pictures in it and is also about 50% longer than the first edition which may give you some idea of just how much things have changed.

For those who read the first edition I’d say the information on portfolios, reports, and the new bidding options still make this one worth checking out if you haven’t already dug into those on your own yet.

Easy AMS Ads 2nd Ed V5

 

“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 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.

Keep Spending The Money or Not

I once more find myself in that stage where I’m contemplating where to go from here. One of the big issues I’m trying to figure out for myself is if it matters to me to be a fiction writer or not. Or if it’s enough to write non-fiction only. It’s a heart-head fight going on and I’m not sure yet which will win.

But while I’m working through that I ran myself a report that looked at sales by series for March-April-May of this year versus advertising spend, which was 95% AMS ads.

And what’s interesting is that for most of my non-fiction I’m spending about $4 for every $10 I make. There was one that was losing me money that I’d already shut down. And another that was closer to $9 for every $10 I make, but overall it’s about 40% advertising costs.

For my fiction, both fantasy and romance, it’s about $7.50 for every $10 earned. I’m still profitable, but half as profitable with those as I am with the non-fiction.

Which bugs me. But is understandable. More competition means higher advertising costs. And as much as I’d love for the conspiracy theorists to win and drive everyone away from using AMS, I don’t see that happening anytime soon.

So it raises the question: Do I keep spending advertising money on low-margin products like the fantasy and romance? Or do I focus my advertising money on high-margin products like the non-fiction?

Both are profitable, which would argue for spending that money because I’m making money even if it’s less per dollar. And it’s not like I spend time on the ads. Maybe ten minutes a day total across all of them, so there’s no added cost in that respect. And it is nice to see things you’ve written sell as opposed to sinking in the rankings.

I guess if I had a finite budget for things and was maxing out that budget with the non-fiction it would be an issue. But I’m not. AMS, the way I use them, only spend so much per title.

So I guess I keep them going. But I do miss those lovely halcyon days before everyone else had discovered AMS and I was spending $2.50 to make $10 on the romance and fantasy novels, too…

On Authority and Authenticity

First, a quick note. AMS Ads for Authors is now Easy AMS Ads. With the ebook I just changed it over, but for the paperback I had to publish a new version, so don’t go getting confused and buying it twice.

It seemed the best thing to do since the Dawson course seems to have been rebranded as Ads for Authors, including a module on AMS Ads for Authors. Not to mention that someone much wiser than me recently pointed out that I was burying the lede with the prior title.

So, rebranded. Done.

And it’s the AMS book and video course that have had me thinking a lot lately about this issue of being an authority on a subject and how you also maintain authenticity at the same time.

For me, the Excel books and courses are easy that way. I know Excel. Every single professional job I’ve had since college when people wanted to do something in Excel I was that person they asked about how to do it. Or when something went wrong I was the one to fix it. So I have no hesitation claiming authority when it comes to day-to-day use of Excel. I know it.

AMS is a different beast. I’m comfortable with explaining the mechanics of how you start an ad and what the differences are between SP and PD ads. That’s easy to do. I’m even comfortable explaining how I use the ads. And I absolutely have told new writers who aren’t seeing a lot of sales that the ads are worth running and believe that 100%.

I feel confident and would stand behind everything I’ve said in Easy AMS Ads.

Where I get a little hesitant is in putting myself out there as some sort of ultimate authority on the ads. Given the fact that this is Amazon we’re dealing with it seems supremely arrogant for me to claim I’ve cracked the code to AMS and that everyone should listen to me and do things the way I do them and only that way.

And it’s not realistic to think that things will stay static that way. Even if I believed that I had cracked their code today, there is no certainty that I could still say that tomorrow. As I mention in the video course, this is a blind auction system with millions of participants and unknown relevancy factors at play that are subject to change at Amazon’s whim. And that’s before you try to account for changing consumer behaviors.

So it’s tricky. I recommend the ads today, but will I feel that way tomorrow?

A few folks have recently urged me to be more aggressive with pushing the AMS book and video course. And I can see the argument for it. I wrote the book out of a place of frustration with things people were saying about AMS and I still have that sense of frustration when I see people talk about AMS as if they’re the most complicated, insane, involved ads out there.

They don’t have to be. You just have to remember the serenity prayer and accept that you can’t control it all or know it all but if you’re making money at running them then yay. And so I can see the value in pushing the book and course more than I do to reach those people who could benefit from the ads if they’d just see past the angst and drama.

But building too much of a reputation on AMS ads seems like a shaky foundation to me. I want to be able to call it one day and say, “Nope. Done. Not working anymore.” And I want to be able to do that without hesitating because I’m earning good money off of selling people on using the ads.

For me it’s an issue of authenticity. I don’t want to ever feel like I’m lying to people to make money. It’s damned easy to do, but it’s not who I want to be. So the book and the course are out there and I stand behind them and may even do a few things to push them more than I have, but don’t expect me to build my empire on AMS ads.

I don’t think I’m suited to it.