Today I uploaded most of my December 2020 numbers in my Access database.
(Audio and Kobo are still outstanding and so is IngramSpark Australia for some reason and I never upload D2D until the last moment to give them time to finalize the numbers they show, but what I had at this point was 95% of the year so close enough.)
As I expected, revenue was down, but profits were actually up, so yay. It seems less people were clicking on ads perhaps but more were willing to buy when they did since most of my revenue is ad-driven. Either that or I just didn’t keep my eye on the ball as much in 2020, because, well…2020. Either way.
Steady improvement, but still not where I’d like to be. And still not sure that the market is long-term sustainable as it exists today. But that’s a post for another day.
Part of looking at my numbers involved comparing them to some goals I’d set at the beginning of the year for revenue and profit by author, series, and title for 2020 as well as lifetime.
After laughing uproariously at my early 2020 optimism (I was hoping to have lifetime revenue by now of $75K more than I have) it was time to set 2021 goals.
I realized what I needed to do was stop setting goals based on lagging indicators like revenue and profit and instead set them on leading indicators.
What do I mean by that? I’ve probably discussed this before at some point, but it’s a good topic to cover again. A lagging indicator is a result, but it requires other actions to make it happen. A leading indicator is an action you take that actually drives those results.
For me, with publishing, leading indicators are published titles and ad spend. If I don’t publish titles and advertise them, I don’t make money.
For some it could also be word count or hours spent writing but those don’t work for me. I need a tangible finished product that I can sell. If I write 50,000 words on something I don’t publish, that doesn’t help pay my rent. Right?
And sitting in my office saying, “I will make $50,000 in profits this year” sounds great, but unless I have something out there selling that well already, it’s not going to happen.
Fortunately, I normally do set new year’s resolutions some of which are things like, “Publish 4 non-fiction titles” which cover the “produce new product” side of things.
Where I tend to forget this is when I look at ad spend, revenues, and profit and loss. Because I’ll often jot down revenue and profit goals for a title separate from my new year’s resolutions. “I would like Title X to make revenue of $20K with a profit of $15K.” But I almost never jot down title-level ad goals.
Saying I want a profit of $15k is nice and all, but it leaves out the steps that are required to get there. Which for a published title comes from promotion and advertising. If I think a profit of $20K requires an ad spend of $5K, then I need to actually spend that much on advertising. That needs to be my goal.
If I can actually make that work. There are diminishing returns on ad spend for some of my titles. The market for them is only so big, so I can’t just say “Spend $500K to make a million” because, haha, no, not with what I write.
But what I can do is go back to that revenue goal of $20K that expects an ad spend of $5K and then break that down either monthly or quarterly and set a goal to spend $400 per month or $1,200 per quarter on that title.
Now, I know some people who publish don’t have that money to spend on their titles. It comes up in the forums often. So let me say this: Start small and reinvest your profits.
Especially with something like AMS ads, you do not have to spend hundreds or thousands or even tens of thousands when you’re getting started. You do need to bid enough for your ads to show, but if you can only spend $2 a day on an ad, fine. Start there. If that ad is making you $4 a day then next month you can spend more. And the month after that and the month after that.
(I think we all have a better grasp of exponential growth after last year, no?)
And if you spend $2 a day and don’t make anything over the course of a month, then something there isn’t working.
If you aren’t getting impressions, you’re likely not bidding enough. If you’re getting clicks but not sales, then something is off in that chain from first impression to purchase.
Are you targeting the right audience? Is there alignment between your target audience, your cover, your ad text, your sales page copy, your genre, and your look inside?
Does it all tell customers that they are getting the same product or does the initial impression look like a novel when what you really wrote was a philosophical treatise? Is the price you’ve set competitive for your genre? If it’s more do you justify that added cost with your presentation of the product?
And if you’re getting sales, but losing money, you may need more product to afford those ads. Often a first-in-series is a loss-leader and you make that up with the rest of the series. Or there’s something in that sales funnel that can be tightened up to get better conversion. But it’s good to start poking around and figuring that out so that when you’re finally ready to run you actually know what you’re doing and what works for your books.
Anyway. Some thoughts.
And now I have to go feed a “puppy” before she starts crying that I have cruelly neglected her by going 3 minutes past her lunchtime. (The real reason I write is so I can have the free time for her. Haha. Sad but true.)