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.

It’s Been A Strange Year

First, for anyone looking for info on AMS ads, it’s one of the categories on this site so just look for posts listed under that category.

Second, I just had a random pleasant surprise. I was doing my usual evening ritual of surfing various websites and dropped by Joanna Penn’s site to see what she had up. It’s an interesting article about what people look at on Amazon book pages that’s well worth a read in and of itself. But the surprise was that the author of the post, Michael Alvear, gave my book AMS Ads for Authors a shout out.

Which brings me to how this has been such a strange year for me. I did far better this year than any previous year, but how I did that is the part that’s so strange. Back in May I was preparing for Taos Toolbox and didn’t want to start on a new novel so decided I’d work on some non-fiction titles instead. I had three presentations planned at RMFW in September and two of them (one on CreateSpace and one on ACX) didn’t tie into anything I’d written yet. So the idea was to write a book about each.

Instead I wrote a book about AMS. I’d been finally seeing consistent long-term sales across titles and I could chalk almost all of that up to the use of AMS and thought I’d learned enough to share it. Little did I expect that that book would actually sell. I mean sure, I used AMS to get it out there and that helped. But what I hadn’t expected was that members of one of the writings forums where I participate would pick it up, too, and that some of those members would share with others how useful they’d found it. (Thank you to all of you who did so either through a review or a forum post or just a private comment.)

That was the first odd outcome of the year. Writing a book on a whim and having people actually like and recommend it.

The second was when an AMS ad I’d had running for almost a year took off in June and stayed hot for close to four months resulting in far more sales of a book I’d released in 2014 than I’d ever expected from that title. I could’ve never predicted going into this year that one of my top revenue producing titles for the year would be one I’d published two and a half years before.

The third was what happened with the Excel guides. I wrote those four books and the whole time I was writing them I thought I was wasting my time. I figured Excel for Writers and Excel for Self-Publishers would each sell maybe a handful of copies. But once I’d started writing them I couldn’t stop myself. I wanted to get down on paper how I used Excel for my writing.

And then, even more bizarre than the first two surprise outcomes of the year, I had an opportunity to put those two books into the NaNo StoryBundle. Suddenly, books I’d thought would sell a handful of copies had a chance to sell thousands.

And the more general guides that I wrote because I’d written the other two, Excel for Beginners and Intermediate Excel, have been doing better and better, giving me my best-ever month for print sales this month.

I’m glad that those passion projects have turned out well. It’s made it a much better year than it would’ve been otherwise. But I have to say it does make trying to figure out what to do next even more confusing. At this point in my career, this is all I know:

This is a constantly changing market. What works today will likely not work tomorrow or not work as well tomorrow. The more product you have out there, the better. (As long as it’s good work that its audience will enjoy.) And for me, personally, it’s better to write eclectic projects that I enjoy and that keep me writing than to try to force myself to write what I think is in demand. (Although if I could write reverse harem or alphahole romance I’d certainly be doing so right now…)

Anyway. It was an interesting year to say the least. Here’s to another one in 2018.

It’s Okay If You’re Not There Yet

We’re about at the end of Nano and some will celebrating their victory of “winning” Nano, while others will be kicking themselves for failing to hit those 55,000 words. And even those who won nano will soon realize (one hopes) that putting those initial words on the page are just step one of a long process. (I think it took me nine drafts to finalize my first novel and the second draft was almost a complete rewrite.)

It’s easy to look around and see what others are doing and think you don’t have what it takes. Or to get defeated when things aren’t happening fast enough. And it’s normal. The key is to keep going. If you keep going AND keep striving, you will improve. You will get better. It will get easier and you will start to see little glimmers of success that pull you forward.

Let me share a little of my own journey on this one.

Often times in the indie world there’s a lot of “oh, well, obviously your problem is…” talk. Covers is one of the top targets of these kind of comments. Those who’ve been around a while can look at a cover and think “NO! That won’t work at all.” But for a newbie, that skill just isn’t there yet.

I had to buy a new computer last week because this current one has developed the habit of just turning itself off, and I figured before I transferred my files I would go through my GIMP files and delete all the many drafts that had led to each of my covers. (I’ll sometimes go through twenty iterations of a cover before I’m satisfied.) What this made me do is look at some of my oldest covers.

And, oh man, were they bad. The initial covers on Douchebag were hideous. I’d done enough research to figure out the basic color scheme for men’s dating books (black, white, red, yellow), but what I then did with those colors? Holy cannoli. Bad.  Bad, bad, bad.

But I didn’t know. I put ’em out there without hesitation. And, surprisingly, a few copies sold. Why, when the covers were that bad, I will never know. Trust me, they were BAD.

But I learned and I experimented and I swapped out the covers more than once and I slowly improved. Is the cover perfect now? No. But it gets the job done. And maybe someday I pay someone who does this for a living to put a really flashy cover on it.

(Doubtful. This class I’m taking now has taught me that I have far more interest in the writing of things than in the marketing of things and that I may always be one of those folks who spend far more time on creating a product or thinking about how it all works than on trying to find my audience.)

Anyway. Back to the point. I didn’t know back then what I didn’t know. And I could’ve had millions of dollars to spend and still not done it “right”, because there was a lot I needed to learn. (Still is, but I think I’m further along now than I was then.)

This is a journey. With a lot of steps. And some of us are starting out in Australia with ten bucks in our pocket, trying to make it all the way to London, or in Idaho trying to make it to Russia.

It’s okay if it takes a while. It’s okay if you go off course for a bit. The key is to keep going and keep improving. And if someday your old covers or your old stories make you cringe? That’s okay, too. It just means you’ve learned enough to see the flaws in your early work.

So chin up and keep moving.

 

Number Crunching

I’m in this phase right now where I’ve decided to dive back into all of my notes and books from my MBA program to see how I would apply all of that teaching (I had a concentration in Entrepreneurship after all) to self-publishing.

It’s been interesting, because most of the materials address larger corporations and they assume that people have bigger goals than I actually do. I view writing as a lifestyle business not a scalable enterprise. (Although it could be and rumor has it a lot of the top romance writers have turned it into one.) If I could earn $100K a year without getting out of my pajamas or having to work in a team, I’d be ecstatically happy.

So I’m trying to take materials written for managers and corporate executives or the type of entrepreneurs that might seek outside funding and adapt it to self-publishing. Which means I’ve been looking at my writing from a number of different angles.

To give you some perspective, as of the end of October I had earned income on sixty-seven different titles this year. (That number is higher now.) The titles range from fantasy novels to romance novels to romance short stories to non-fiction books about Excel, finances, raising a puppy, dating, grief, cooking, and who knows what else. So I have a large variety of titles to look at. And my question is, which are my best performers? What should I do more of?

The most basic but incredibly flawed approach is to just look at gross revenue. How much money have I earned on each of those titles? It’s the one I tend to do the most often and the one I really shouldn’t do ever. If you focus on gross revenue you may bring in a lot of money and bankrupt yourself at the same time.

In terms of cash-in-hand, my romance and fantasy novels are at the top by a hefty amount.

The next step would be to look at what I’ve earned after accounting for advertising costs and production costs. My fantasy series has very nice covers that cost a pretty penny. My romance series has covers I made myself. I’ve spent roughly the same amount on advertising both series.

When I account for advertising costs (which I do at a series level not a book level), my romance novels drop to third place and my fantasy novels are the worst performing of all of my titles. The number one spot goes to a written-to-market series of short stories that basically sold themselves.

But I can’t stop there. Because this is a flawed approach, too.

I’m still not properly applying costs to each title, because I’m only thinking about direct costs. Covers, ads, etc. But what about the cost of this blog? Or of other expenses related to writing like conferences or my computer or electricity, etc.? (I haven’t done this yet, but the way to do it would be using activity-based costing, probably based on wordcount or hours spent writing each title.)

Also, I’m comparing titles that were published in 2013 to titles that were published in 2017. It’s a little unfair to say, “that’s the better title because it’s made me more money” when the title has been out for four years longer than the next best title that’s been out six months.

Which is why this week I went through and compared month 1, month 1 & 2, and months 1-6 sales for my titles. When I did that I could see that for months 1 & 2 the first in that written-to-market series dominated the list, but one of my Excel guides also made an appearance and the fantasy and romance novels did, too, particularly the ones that were later in the series.

Another interesting thing to look at was the percentage of sales that occurred in the first two months and first six months versus lifetime sales. That written-to-market series where the title was published three years ago? 71% of its lifetime sales were in the first six months. (It’s now permafree but still gets audio sales.) My first-in-series fantasy novel on the other hand? 10%.

Finally, last night I ran across another way to approach things: profit margin. Now, the number I calculated isn’t actually profit margin because I used what I receive from the distributors, which means this is after I’ve paid the 30-65% that they charge to sell my books. But having said that, I have a series with a 95% margin. For every $50 spent, I’ve earned $1000 on it.

This analysis moves a lot more of the non-fiction up to the top and drops the romance novels down because contemporary romance is so competitive you have to fight for visibility.

Of course, it’s never that simple. Because then you have to look at what you can write. It turns out I suck at writing to market, not because I can’t do it but because I can’t do it consistently. At least not the market I wrote to that did so well.

And the trick with fiction is that most writers (not all) need a sort of critical mass of titles to really start seeing results. (My estimate is twelve novels. I’ve heard five in a series from trade publishers.) So looking at the performance of one novel against three related non-fiction titles may not be a fair comparison. You have to figure that you can expand on a fictional world with much more ease than you can expand on a non-fiction area. I’ve written three books about dating for men. I maybe have one more I could write, but that’s it. Whereas novels? I could write those for eternity.

And I also have to consider how replicable those results are. Being in the NaNo StoryBundle has seriously skewed the numbers for those series and titles so everytime I look at them I have to do so with a big asterisk next to the results or back out the bundle portion of the sales.

Also there’s how much time it takes to write each title. If you’re three times faster at writing X than Y then you need to consider that in terms of what you get back when you sell X and Y.

Anyway. I find it fun to think about these things. But, really, the best thing to do is write the next damned book. Product is key. And we as writers never have enough of it because even if someone loves what you do, they’re only going to pay you for that title once. (Or maybe three times at most? Ebook, print, audio.) You have to give them more so they’ll give you more money.

So quit reading this and go write. Like I’m going to do.

Theoretically.

Let’s Talk Pricing

So over on FB a fellow author was essentially calling out trade publishers for how they price ebooks. And they’re not the only person who has ever done that. It happens on a fairly frequent basis that someone questions why trade publishers price ebooks so high.

Usually, the argument that’s made is that it doesn’t cost all that much to put out an ebook. There’s no paper or ink or printing process that needs to happen. So the marginal cost of an ebook is negligible.

But what those arguments all fail to account for is that people are willing to pay that much for those books. Lots of people. Right now The Midnight Line by Lee Child is $14.99 in ebook. It’s ranked number 2 in the Kindle US store. That means somewhere around six or seven thousand people were willing to pay that for that book today. And it’s a book that’ll be in the top of the charts for a while so that many people are going to be paying that much for that book each day for weeks.

What benefit is there to the publisher to drop that price? It won’t improve the book’s rank on Amazon. It’s already #2. Where else can it go?

Well, the argument goes, they’ll get more readers if they drop the price. Okay. True.

But they won’t make more money. And ultimately they may capture all of those readers. The problem with a lot of the “price lower” arguments are that they fail to account for long-term pricing strategies like price-pulsing

Let’s walk through some numbers to show you what I’m talking about.

First, we need a set of assumptions. For our fictitious book let’s assume that there are 12,250 people willing to buy this book. 5000 of those people will only buy the book if it’s available at 99 cents. 2500 will buy it for $2.99 or less. 1000 will buy it for $3.99 or less. Another 1000 will buy it for $4.99 or less. 750 each will buy it at $5.99 or $6.99 or less. 1,250 will buy it for $7.99 or less. 750 will pay $8.99 or less. 250 will pay $9.99 or less.

(I did this in Excel. It’s the chart on the left below. That third column is the cumulative number of customers who’d be willing to pay that price. So everyone would pay 99 cents, but only 250 would pay $9.99.)

Pricing Scenario

Let’s start with the ideal world scenario where we somehow manage to sell our book to every buyer at the maximum price they’re willing to pay. We capture the 99 centers at their price, but also get the $9.99 buyers at their price.

In that scenario, we sell 12,250 copies of the book and we gross $42,127.50. But you have to account for the Amazon cut, so we net $27,756.75.

That’s the ideal scenario. It doesn’t happen, because we have to list our book for sale at one price and even if we change prices over time (as we’ll discuss in a minute) there’s no way to ensure that the customers who are willing to spend $9.99 only see our book when it’s at that price. So in reality we’ll end up with a customer who would’ve paid $9.99 paying $4.99 or even 99 cents depending on when they see the book.

Now, a lot of times the argument is made that you should maximum your sales by pricing low. So 99 cents. That captures the most possible customers. You get all 12,250 customers at that price, no doubts about it. So what do you earn with that approach? You gross $12,127.50, but you net $4,244.63. Same number of sales. But because you priced for the lowest-paying customer, you earn $23,500 less than the ideal scenario.

Of course, as we mentioned, the ideal scenario isn’t likely anyway. So let’s compare the 99 cent approach to another alternative, pricing at $4.99. That captures anyone willing to pay $4.99 to $9.99 but loses anyone who would only pay less than $4.99.  Instead of 12,250 sales you only get 3,750. But those 3,750 gross you $18,712.50 and net you $13,098.75. So you lose 70% of your potential customers but you make three times as much.

Now, what about the final option? Price-pulsing. You list at $4.99, so you’re giving away some potential income there, and then, after you’ve captured those buyers, you drop the price to 99 cents to capture the bargain hunters. Under this approach you sell all 12,250 copies. You do worse than the ideal scenario (because your highest price paid is $4.99) but better than the other two scenarios (because you’re capturing some of the higher-paying market by initially pricing at $4.99 as well as the lower-paying market by dropping the price to 99 cents). In this approach, you gross $27,127.50 and you net $16,044.

So, really, price pulsing is the best approach if you’re willing to be patient about when you capture your buyers.

And for trade publishers with established authors who aren’t struggling for visibility, pricing really high initially and then slowly lowering prices over time is the most profit-maximizing decision. That’s the approach that’s most likely to allow them to stay in business long-term and pay all those salaries and overhead costs and find new undiscovered authors who aren’t established and cant command those prices.

Does that mean self-publishers should price that high? No. There are other factors at play when you’re not Lee Child. Key among those Amazon’s algos that reward early success and seem to have a support level that means that ranking high early means better long-term performance. But it does mean that if you’ve chosen to always price at 99 cents that you’re leaving a lot of money on the table.

 

10,000 Copies Sold

Sometime this last month I crossed the 10,000 copies sold mark. Half of that came in the last six months.

I should be thrilled. I should be dancing on the tables, overjoyed that maybe I’m finally starting to get some traction on this whole writing thing and to figure out how to sell what I write.

But I’m not.

While there is a part of me that’s excited about where I am, I know this might not continue on an upward trajectory. I have a color-coded list of income by month and I can look at that list and say, “Hey, there’s December 2014 when I published my first romance novel and a successful romance short and thought I was on my way. My first $500+ month.” And then I can look at July 2015 and see that I only made $56 that month. And that that was followed by August 2015 where I had a $600+ month. And then December 2015 which was again under $100.

So I know better by now. Some folks do great right from the start and just keeping going, but I’d say that for most writers it’s more peaks and valleys.  Good months and then not so good months.

What makes me even more uneasy is where those sales have come from this last six months. In July, almost half of my revenue for the month was from a single romance novel. In October, that novel is next to nothing for revenue, but I had a successful fantasy promo and non-fiction picked up the slack.

On one hand, yay, diversification. When one track slips, another can catch the slack. On the other hand, where do you put your efforts when from month-to-month there’s no good way to predict which titles will do best?

I like to tell my friends entering the corporate world to just get that first job, put your head down, and do the best damn job you can. Even if it isn’t the ideal position for you, you need to focus on where you are to get forward momentum and move up. You want to tell a good story when you’re ready for that next job, you need to commit to the job you have now.

That should be true of writing, too. Pick one path, focus on it, and follow it until you succeed. And I think it is for many. But what path do you choose when you could easily choose any of three paths?

(Me being me, I just wrote a new story on path four that I should just drop already. Someone please smack me upside the head.)

The other killer about that number is that it’s not enough. I know how amazed I would’ve been in year one of self-publishing to sell 10,000 copies. That’s thousands of people I don’t know who paid cash money for something I wrote.

Think about that for a minute.

Let that sink in.

Thousands of people have paid money for something I wrote. How many people can say that?

But then realize that selling 10,000 copies isn’t enough to make this sustainable. For one year, let alone four of them.

I often ask myself why I stick with the self-publishing. There are so many ways I could make money that would be far, far easier in terms of hours spent and money earned. And I think part of the answer is that it’s so damned hard for me. I have some weird, twisted need to fight for what I get or I don’t consider it worth keeping. If I’m not challenged, it doesn’t work for me.

(Also there’s theI get to work alone and from home aspect of it…)

Anyway, yay for me. Pauses to celebrate this milestone. Now time to get back to it.

20K here we come. And sometime this decade, please.

It Ain’t The Road That Kills You…

It’s the paper walls.

That’s from a song I happen to love by Marc Cohn:

The portion of the song where he says that doesn’t actually occur until the end. (At 3:39 on that video.) If you listen to it you may be asking yourself what on earth that song has to do with anything except people making really strange choices about who they hook up with and when, but stay with me for a moment.

Because, as always, I take something completely different away from that song than probably anyone else would. See, I hear that line “It ain’t the road that kills you…” and I think that the song is about how it isn’t being alone that’s the problem, it’s knowing that others aren’t and being able to hear (in this case) what you’re missing and how knowing what you’re missing is the real issue.

Now to bring this back to writing.

I ran a promo on Rider’s Revenge this weekend. It ends today. And, good news, I sold at least 374 copies of book 1 and 24 copies each of books 2 and 3. The promo isn’t even over yet and it’s already been profitable and sell-through to books 2 and 3 over the long-term will make it more so.

Fantastic, right?

Except I kind of felt like crap about it the last two days. Because part of the promo was an international-only Bookbub. And according to their site, the average number of sales from this particular list should be 550, but I’m only at about 300 off of the Bookbub.

It paid for itself. And I think I’m still missing Google sales and maybe even some iTunes sales. But I’m not going to hit 550. Which bummed me out.

I had a successful promo. I made a profit. I hopefully have a couple hundred new fans. And yet…knowing that others have done better running the same promo spoiled it for me.

It’s like we’re all trying to hike a mountain here. And I know that as long as I keep going and putting one foot in front of the other that I’ll get there eventually. But it’s harder when someone breezes by like there’s nothing to it or the person you started the trail with leaves you behind because you’re going so much slower.

(Real life experience: I hiked Mt. Quandary, a 14er, years ago with a couple co-workers. They were both in excellent shape and left me behind after the first hour or so. But I made it to the top. Eventually. Just in time for them to be ready to turn around and head back down…)

It’s easy to always be looking to others and feel constantly dissatisfied.  Because there will always be someone selling more, getting more reviews or better reviews, or signing high-profile deals. But you can’t do that. It’ll kill you.

Step back and remind yourself what you have done.  See how far you’ve come. Embrace the positives.

(I say as I continue to sit here and sulk.)

Remember, it isn’t the journey that will kill you, it’s comparing yourself to others and letting their successes (or how you feel about them) defeat you.