How to Promote Your Book with Amazon Ads


Glossary:

  • ACOS: Advertising Cost of Sale – basically, how much you spend on ads for each sale compared to how much a customer pays for your book. Note that Amazon’s ACOS number is not very useful as it goes off of the retail price and not the amount you are paid, and it does not tell you what format the purchase was made in, and does not include any Kindle Unlimited page reads or Kindle Online Lending Library borrows. For a very rough estimate, assume that 65%-70% is where you would break even for a Kindle sale and 35%-40% is where you would break even for a paperback sale.
  • Actual ACOS: See Advertising Cost of Sale. The only difference is that in my spreadsheet, I calculate the ACOS based on how much money you are being paid, and not on how much money Amazon is collecting, and it takes all sales into account and not just the ones that Amazon reports.
  • Ad Groups: This is basically a single ad, grouped together by common elements. (Technically, each keyword is it’s own ad, but they are grouped together in the interface to make it easier to see aggregate data.)
  • AMS / Amazon Marketing Services: Amazon Marketing Services is the former name of Amazon Advertising
  • Bid: How much you are willing to spend per click to send a customer to your page for Sponsored Product ads. (For Lockscreen ads, your bid is actually for somebody to show an interest in the ad and you pay if they visit your ad after waking up their device whether they eventually click on it or not.) The bids act as an auction, where Amazon will apply your bid to an algorithm to determine which ads are going to make Amazon the most money. We don’t know the specifics, but they likely factor in the conversion rate of the ad, the sales price of the product, and how much you are willing to spend. See the section below on Bidding Strategy for possible adjustments to your bid.
  • Bid Adjustment / Adjust Bids by Placement: An option to increase your bids by up to 900% for specific ad placements. You can automatically increase your bid for the top of search results on the first page, and on product pages. We have not experimented with this feature yet.
  • Bid+: A discontinued program, replaced by “Adjust Bids by Placement”
  • Bidding Strategy: How Amazon treats the bids in your campaign. Until April 2019, Amazon treated your bid as a maximum bid but would lower the bids in real time if your ad is less likely to lead to a sale. There are now 3 options:
    • Dynamic Bids – Down Only: If Amazon thinks your bid is less likely to convert to a sale, they will automatically lower your bid so you don’t spend as much.
    • Dynamic Bids – Up & Down: Amazon will adjust your bid based on the likelihood that they think your ad will convert into a sale. This can effectively double the amount you bid if Amazon likes your ad and thinks customers will respond to it.
    • Fixed Bids: Amazon will not adjust your bid based on the likelihood of making a sale.

    We generally use the default “Dynamic Bids – Down Only” option except in rare exceptions. Note that in all three cases, the bids are still assigned by an auction process, so you’ll only pay 1 cent more than the next best bid.

  • Budget: How much you are willing to spend on a single campaign. Budgets can be a daily max, or they can be for the life of a campaign.
  • Campaign: A set of ad groups under a single campaign that share a budget. Basically, these are the ads that you are showing to customers.
  • Clicks: Each time a customer clicks on an ad to go to your sales page, you will pay a small fee to Amazon.
  • Conversion Rate: How many people convert into a specific action. The conversion rate for clicks would be the number of clicks divided by the number of impressions. The conversion rate for sales (which is what is in my spreadsheet template) is the number of total sales (direct sales of the book plus assumed KU “sales”) divided by the number of clicks. Generally speaking, you should be able to make a profit off of a 1 in 10 or better conversion rate, and will have trouble making a profit off of a 1 in 20 or worse conversion rate. The easiest way to improve your profitability is to improve your conversion rate so that you are not spending money on as many clicks that don’t then turn into sales.
  • CPC: Cost Per Click – the amount of money you spent compared to the number of clicks you’ve received. A lower CPC means that you are spending less for each person sent to your sales page, which means that it is easier to have a positive ROI for that ad. (i.e. make money…)
  • CTR: Click Through Rate – the number of times that your ad was clicked compared to the number of impressions that your ad received. This figure lets you know how well your ad is converting into clickers.
  • End Date: When a campaign is scheduled to end. You do not have to set an end date, though if you only want an ad to run for a limited time then you can set one so you do not have to come in and cancel it manually. If Amazon is not showing any impressions of your ad, then you can sometimes encourage them to by setting an End Date for a week or two in the future. Just remember that you will need to then remove the End Date or reset it for another week or two following if you don’t actually want your ad to stop running.
  • Expected Read-Through / Expected Page Reads: Determining how much you can afford to bid on an ad requires you to know how much each sale is worth. If you are selling a standalone book and know what your royalties are based on a sale, and you know your click to sales conversion rate, you can determine how much you can spend on ads without losing money. If you are advertising a first book in a series or a box set, and know how many readers will continue reading later books in the series, then you can calculate how much the average sale of the first book (or boxed set) will be worth over the long run. You may find that you only earn 35 cents on a 99 cent first in series book, but that enough readers continue reading later books in the series that each customer that reads book one is worth an additional $10 or $15 (or more or less) based on further book sales and/or further page reads in later books.
  • Impressions: How many times your ad has been displayed to customers. You do not have to pay for impressions we are paying per click, but it’s a useful metric to see how when Amazon is actually showing your ad to customers or not.
  • KDP Select / Exclusive Distribution: KDP Select is an optional program that you can opt-in to that gives you access to Amazon’s Kindle Unlimited and Kindle Online Lending Libraries, as well as to Kindle Countdown Deals and Kindle Free Days for promoting your books. KDP Select terms are for 90 days, and you can opt-back out at any time to have your book removed at the end of the current term. The cost is that the digital version of book must be exclusive to Amazon and can not be sold anywhere else.
  • KENP: Kindle Edition Normalized Page – Currently on version 3.0, this is the algorithm that Amazon uses to determine how many pages are in a book and how far a customer has read through a book so they can pay authors in the Kindle Unlimited program based on page reads.
  • Keyword: A keyword is an individual word or phrase that you can use as criteria for a campaign to show up for a customer. It can be related to a search made by a customer, or keywords used in a book’s meta data. Common types of keywords include book titles, author names, ASINs, category names, character or setting names, descriptions, etc.
  • KU “Sales”: Kindle Unlimited Sales – I calculate this in my spreadsheet based on the number of pages read in the book during a period of time divided by the KENP count for that book. Obviously, not everybody that starts a book will finish it, but it does give us a minimum number of people who have borrowed a book so we can calculate potential sales impacts in the bestseller ranks as (at least as of right now) it seems that a KU borrow is treated as a sale in terms of determining bestseller ranks.
  • Lockscreen Ads: These are ads that target reader interests and are displayed as a screensaver on Kindle devices. Customers can pay Amazon an additional fee to turn these ads off, but many customers just leave them on and are presented with the ads every time they pick up their device. Note that unlike Sponsored Product ads, you pay every time a customer unlocks their screen to visit your ad, and that they then need to click on the ad in order to visit your actual sales page. We have not had a lot of success with Lockscreen ads and recommend that you avoid them until you have plenty of experience under your belt and a large enough budget to be able to experiment and learn how to make these ads work for you, as it can be more difficult to target the right people and they are less likely to be in a buying mood when seeing these ads compared to the others.
  • Match Type: Match Types determine how Amazon treats your individual keywords and which search phrases can trigger those keywords. Your options are “Broad”, “Phrase”, and “Exact” match. Match type does not apply when Product Targeting.
    • Broad: A broad match occurs when a customer’s search term includes words from your keyword or a close variant, such as plural, acronym, stemming, abbreviations, accents, or synonyms.
    • Exact: An exact match only occurs if a customer searches specifically for your exact keyword or keyword phrase.
    • Phrase: A phrase match occurs when a customer’s search term includes your keyword, either as a very close variation (more restrictive than a broad match) or with additional words before or after your keyword phrase.
  • Negative Targeting / Negative Keywords: These are keywords or keyword phrases that will cause your ad not to show to a customer. For example, if a popular book in an unrelated genre uses a term you want to bid for, but that book’s audience would not be appropriate for your book, then you can prevent your ads from appearing on that book by including the author name or ASIN or book title as a negative keyword. Negative keywords can be either a “Phrase” or “Exact” match type.
  • Orders: The number of orders placed by customers as a result of clicking on your ads. Note that it can take 3-5 days or more for these numbers to be reported and do not include all purchases made (for example, Kindle Unlimited borrows, or sales to third-party resellers.)
  • Page Reads: Books that are in the Kindle Unlimited library are paid based on the number of pages that are read in the book from people borrowing from the program each month. The amount changes from month to month but can generally be assumed to be slightly less than half a cent per page. Amazon uses a calculation to generate the length of each page using KENP.
  • Placements: Where your ads are shown. You can analyze each campaign to see how many times it has appeared at the top of search on the first page, on a product page, or somewhere in the rest of the search results.
  • Portfolio: A group of campaigns. These are a relatively new feature added in 2019 that allow you to more efficiently run reports. We track our sales based on the books we are advertising and put all campaigns about a specific book under the same portfolio.
  • Product Targeting: You can optionally target specific products when setting up your ad rather than targeting keywords.
  • ROI: Return on Investment – This is how much money you are earning based on your net income compared to your ad spend. You will break even at 0%, and you will double your money at 100%. You can not go lower than losing all of your money at -100% ROI. For example: If you spend $1 on ads, then you would have the following ROI if you earned back royalties of:
    • $0 – (100%) – no sales
    • $0.50 – (50%) – You only earned back half of what you spent
    • $1 – 0% – break even with the same amount earned as you spent
    • $2 – 100% – you have doubled your $1 investment
    • $5 – 400% – You earned 4 times what you spent
  • Sales: The retail dollar value of books purchased by customers as a result of clicking on your ads. Note that this is how much Amazon collected, and not how much you are actually earning. Also note that it does not include all purchases made (for example, Kindle Unlimited borrows, or sales to third-party resellers.)
  • Schedule: The Start Date for a campaign, and (optionally) the End Date.
  • Search Terms: These are the actual search terms that people have used and had your campaign displayed to them. You can see which keyword was triggered by that search term and how well it performed. This is a great place to find future keyword research.
  • Spend: The total amount you have spent for clicks during the current reporting period. Note that Amazon automatically removes invalid clicks but that can take up to 3 days.
  • Sponsored Product Ads: These ads are targeted at specific products or keyword/keyword phrases and are displayed on product listings and in search results. You pay for each click somebody makes on your ad that sends them to your product listing. We recommend starting with these ads while learning how to advertise on Amazon, specifically by using lists of keywords and keyword phrases.
  • Start Date: When you began a campaign.
  • Status: This refers to the status that your ad is in, which is actually a little confusing as Amazon has changed the terms they’ve used over the last couple of years but still references the old terms in some places.
    • Archived: Your ad is stopped. You can copy the ad but can not restart it.
    • Delivering: Your ad is eligible to be shown to customers.
    • Enabled: Your ad is eligible to be shown to customers.
    • Live: Your ad is eligible to be shown to customers.
    • Paused: Your ad is currently stopped but can be restarted at any time.
    • Pending: Your ad is being reviewed by Amazon Advertising moderators and is awaiting approval.
  • Wide Distribution / Going Wide: You are considered “going wide” when you distribute your book in more places than just Amazon. Amazon requires exclusive distribution to take part in their KDP Select program, but if you opt out of KDP Select you can sell your book on your own website or at other retailers such as iBooks, Google Books, Kobo, Nook, Toreno, and others.