Authors must stay up to date on the state of Amazon advertising.

Amazon ads are those “sponsored” books you see at the top of Amazon’s search results pages. They appear on Amazon book pages. Ads for certain books will even appear on a Kindle’s lock screen. Amazon ads are a key strategy for many authors. I address the topic frequently because it changes so often. Right now, they’re one of the fastest-changing marketing strategies.

Blogging strategy hasn’t changed much in the last five years, but Amazon ads have completely changed several times in that same period.

In the olden days of Amazon ads, an author only needed to create an ad in order for it to be profitable. Not so in 2021.

How have Amazon ads changed in 2021? 

What do authors need to know about the changes? To learn how authors can navigate the turbulent world of Amazon ads, I interviewed Bryan Cohen of the Sell More Books Show.

Thomas: Why are Amazon ads such a popular strategy for indie authors?

Bryan: Amazon ads are fairly easy to set up. Amazon’s ad platform tends not to overspend your money if you’re careful. Most authors sell the majority of their books on Amazon, and since the ad appears where readers are already shopping for books, it’s effective.

Compared to other forms of advertising, it’s also relatively cheap and easy. It doesn’t take people off of a social media page or a promo page. People on Amazon are looking for books, and when they see an ad for yours, they are more likely to click on it and buy it.

Thomas: It’s the equivalent of the in-store promotion at the grocery store. You’re already at the store in the aisle for the product you’re seeking, and there’s a big promotional ad right there in front of you. It’s easy for the customer to make that purchasing decision.

It’s also easy for authors to create that kind of ad.

If you compare Amazon ads to podcast advertising, which arguably has a higher ROI than Amazon ads, podcast advertising is complicated. You don’t have a Podcast Ads Dashboard. You have to find and connect with each podcast host on your own and track the activity generated by each show and each episode yourself. It’s so complicated that most authors don’t even try it.

Tips for Getting Started with Amazon Ads

Thomas: How do authors get started with Amazon Ads?

Bryan: Start by doing a little research. Don’t go into it blind. You need to know your book well because Amazon Ads run on bids (how much you want to pay for a click) and relevancy (how closely related your book is to other books you’re targeting).

If someone searches “Christian fiction,” you want to show up on that page if you write Christian Fiction. You don’t want to show up when someone searches for “paranormal cozy” because Christian Fiction readers will leave you one-star reviews saying, “This is about Satan!”

Authors need to be smart about bidding relatively low while keeping relevancy high. It’s not valuable to create hundreds of ads on whatever you can find as a target.

Thomas: That one-star Satan review brings up an important principle that applies to every reader. You can determine how many stars your book has partly by picking the right kind of readers. If you advertise to the wrong readers, they’ll leave bad reviews because they thought it was something it wasn’t. Or it may not be the kind of book they like.

For example, I don’t read Amish fiction. I don’t have anything against it, but I prefer action and dragons. If someone bamboozled me into buying Amish fiction because I thought it was about dragons, I would not be happy.

Choose your readers carefully, and your reviews will be better. Good reviews will help you sell books to more readers.

How does Amazon ad bidding work?

The ad auction is not a fine art auction where you raise a paddle. This auction happens 24 hours a day, and bots facilitate it.

Bryan: Essentially, you tell Amazon, “I don’t want to pay more than this when someone sees my ad, clicks on it, and goes to the Amazon book sales page.”

There are some bells and whistles you can play with to change certain circumstances. But mainly you’re saying, “I’ll spend no more than 35 cents for a click.”

When your campaign is submitted, it goes into these magical bot auctions. Your ad with your bid is in the queue. Based on your bid, to a certain extent, the ads that have a higher bid than yours will show before yours because they wanted to pay more. Amazon likes money, so they tend to seat the higher bids ahead of the lower spenders.

But, former Amazon ad employee Janet Margot taught me that relevancy is also a factor in where your ad is placed in the queue. It’s not always a line, but more like a carousel that shows up on the Amazon sales pages of books. You might see a section labeled “Sponsored Products” or “Books you Might Like,” or whatever they’re calling it these days. You’ll see about 15 pages of 10 ads each. You click an arrow to see the next 10. The order is determined partly by how much you bid and partly by how relevant your book is.

But it’s not always a carousel. If I search “self-help book,” Amazon’s bots magically select a couple of books from the ad queue, and they show those at the top of the search results page based on how much was bid and how relevant the book is to the customer’s search.

A little farther down on that search page, you’ll see a couple more sponsored books. There are about four ads per page. There’s also a “Sponsored Brand” ad space at the top, but I don’t recommend sponsored brand ads for authors. They’re expensive. It’s the Amazon version of buying “likes.” Sponsored Brand ads are used to bring exposure to your book, but it’s not a great return on your investment for authors.

Thomas: With any kind of brand advertising like TV or radio, authors are bidding against profitable, wealthy companies who aren’t trying to make money on the ad. They’re just trying to establish their brand, and they’re not watching every penny. If they lose money on the brand awareness ad, they’re fine. They only care about building awareness. Nike and Coca-Cola build their brand this way. Even if an author has a $10,000 budget, that’s just a rounding error for large companies who buy those brand exposure ads.

Thomas: I want to explain bidding another way. Let’s say we have three authors, Andrew, Betty, and Charlie.

Andrew is bidding 50¢ per click, but he’s only budgeting a maximum of a $5.00 ad spend per day.

Betty is paying 30¢ per click, and Charlie is paying 20¢ per click. 

Assuming they all have the same relevancy, Andrew’s bid will win the auction for that spot. But after Andrew receives ten clicks on his ad, he’s spent his entire $5.00 budget for the day, and Betty will be in line for the leftover spots.

Once Betty receives enough clicks and spends all her budget, any leftover clicks will finally go to Charlie.

Some days, Andrew is the only one of the three who will get clicks. If only three Amazon customers search for the keyword those three authors are bidding on, Andrew’s high bid will be the only ad to show.

But when we return to the principle of relevancy, things change.

If an Amazon customer searches for Author Betty, who is only bidding 30¢ per click, Betty will probably be listed first in the search results. She’s not the highest bidder, but she is the most relevant because that customer is searching for an author named Betty.

Andrew, who’s trying to snipe Betty’s readers, is going to have to pay a whole lot more money to outrank Betty for her own name in that list of search results.

Should I increase my bid to get more clicks?

Bryan: For authors with equal relevancy, the higher bid will win. However, if Andrew has run the numbers and found that the most he can profitably bid is 40¢, then every time he pays more than 40¢ per click, he’s losing money.

The temptation is to think that jacking up your bid will help your ad start getting clicks. You will start getting clicks, but we want profitable clicks that will keep us in the black.

It’s easy to bid $2.00 for a click and use your budget every single day. But if you don’t have a 40-book series, it’s probably not an effective, profitable strategy.

Thomas: If Andrew is paying 50¢ per click, but only 1 of 10 clicks leads to a sale, Andrew has to buy ten clicks to sell one book. If he’s selling his book for $5.00 and spending $5.00 to get a sale, he’s losing money because Amazon takes their piece of his $5.00, and he receives less than the $5.00 he spent.

But if he has many other books in the series and a high sell-through rate, he might lose money on Book 1, but half of his Book 1 readers will buy Book 2. Some of those will go on to buy the other ten books in his series. Andrew is happy to lose money on those initial Book 1 sales.

In the indie world, authors create books to fit Amazon ads rather than creating ads to fit their books.

How do I write a book that is easy to advertise?

Bryan: Chris Fox was one of the creators of the write-to-market concept. Certain genres sell better. Within those genres are very popular sub-genres.

If you’re aiming for profit, you write a book that will help you put food on the table. You do the research and find out which books tend to sell. You investigate what kind of title, cover, and book description they have. You optimize the heck out of everything and make sure all the marketing is in place, and then you write a great book. With marketing that hit’s the bullseye, that book will sell better from paid advertising, especially if it’s part of a series.

The stand-alone book you wrote several years ago without a marketing strategy that hasn’t been selling well may not benefit much from paid advertising. Not all books sell equally well with Amazon Ads.

To the victor of the algorithm, go the spoils.

Thomas: But what do you say to the author who just wants to write from their heart?

Bryan: I’ve seen authors who don’t want to write to market. They decide to write what they want to write. But those authors go out and find 25,000 readers who like to read what they like to write. They don’t worry about Amazon ads, but they do run Facebook ads and use retargeting. Those authors treat their readers with great care and give them what they want. It’s a tough road, but authors do succeed on that path.

Thomas: It still requires resonance with an audience, and authors must still connect with their readers. For every author who is successful on that path because they happen to be passionate about a kind of book that already resonates with millions of readers, thousands of authors try to walk that path and fail because their books don’t resonate. They’re not in tune with the music around them. They’re writing books for themselves. And it turns out their audience is just them and a few of their close friends.

No matter which path you take, you have to care about what your readers want. Ultimately, you must write for your readers and not for yourself.

Thomas: I interviewed Chris Fox on these topics. I talked with him about his book, Write to Market (Episode 151) and his ad strategy in Episode 193. Chris said he doesn’t believe you can profitably advertise a single book, and I pushed him on this. But he believes you have to have a series before you can run profitable Amazon ads.

Do you agree with him on that?

Do authors need a series in order to advertise?

Bryan: It’s a sliding scale. When you advertise the first book in a series, you’re advertising a series. It’s easier to make money from the potential sale of multiple books. One nonfiction book may lead to the purchase of a course, and in that case, your ad is actually marketing two products.

But for the stand-alone book or the first in a series that isn’t written yet, the profit margins are very small.

People who sell $1,000 courses usually make $800 in profit. If you spend $200 to sell a $3.00 book, you lose $197. The margins are tight. It doesn’t mean you shouldn’t advertise, but you should run the numbers to see if you can have long-term profit on that book.

Thomas: Of all the ad platforms, Amazon is the easiest for running numbers and seeing your ad performance and sales data.

Bryan: Comparatively speaking, yes.

But the Amazon dashboard is misleading in a way.

My Amazon ad dashboard showed that in December 2020, I sold 215 books. They said, “We have tracked that your ads have definitely sold exactly 215 copies of your books.”

I use a tool called Book Report to track sales. Since I only ran Amazon ads in December and did no other advertising, I’d expect my Book Report dashboard to show 215 books sold. But When I opened the report, it said I’d sold 850.

How do I explain that discrepancy?

Either I had 600 organic word-of-mouth sales, or I can attribute every single sale on my Book Report dashboard to those Amazon ads. Neither of those is completely true, of course. Maybe 20% can be attributed to word of mouth.

But for consistency’s sake, I’m going to say those ads led to those 850 sales. Operating under that assumption, we can see the trends on a month-by-month basis. I have seen an author use this strategy to go from making $200 to $1,000 per month, and I’ve seen another go from making $4,500 to $11,000 per month. They began operating under the assumption that one particular ROI statistic in the Amazon ads dashboard isn’t helpful.

Thomas: So you’re assuming all those sales were a result of your Amazon ads. You know that’s not exactly true, but it’s closer to the truth than Amazon’s ad dashboard number. And by believing all the sales come from amazon Ads, you’re able to be more aggressive in your advertising. That brings in more sales, whether it’s because a reader told their friends about it or because your ads resulted in more clicks than reported.  

Bryan: Right, and it’s much more scalable. The more accurate and scalable point of view ends up being the one I’ve seen authors succeed with.

Thomas: If you market your book through multiple channels simultaneously, this strategy breaks down. If you’re buying BookBub ads, going on podcast tours, and swapping newsletters with other authors, this metric will not help your bidding strategy. You can’t assume all your sales are coming from Amazon ads. 

On the other hand, the more marketing you do for your book through multiple channels, the more effective your ads will be. More people will be searching Amazon for “Bryan Cohen” because they heard of you somewhere else, and that’s going to be a cheaper click for you than if someone was searching “young adult fantasy.” That search phrase will be a more expensive click. You’re less relevant, and you’re competing with more advertisers for that phrase. Fewer people are bidding on the keyword “Bryan Cohen,” so there is less competition, and you are the most relevant search result for Bryan Cohen. 

Bryan: I’m guessing that for a reader to click from Amazon to another Amazon page is likely to be a higher conversion rate than a person clicking from Facebook or BookBub to Amazon. You lose people when they go from one site to another.

I had a client who was doing well in a popular sub-genre. She spent $10,000 on Facebook, and she made significantly more than that on her campaign. But I told her if she could spend that $10,000 on Amazon instead, her launch would go better.

Well, it was hard to get Amazon to spend that much money, but we did it. She reached #18 in the Amazon store and had oodles of Amazon data. It was a huge success. She had previously seen evidence of success on Facebook. But when she got data from her experiment with Facebook and Amazon, she could make a valuable comparison between the two.

Thomas: You’re talking about a sequential test. You test by only running Facebook ads in one month and only running Amazon ads the next month. Then you compare the data.

I’ve watched this market, and one of the biggest changes is the number of people following your philosophy. They’re disregarding the Amazon ROI dashboard and using your strategy of dividing the number of clicks by the total number of sales. People who follow your approach are bidding more aggressively and are outbidding people who aren’t.

Bryan: I recommend starting with a 30¢ bid for a stand-alone book and a 35¢ bid if you are advertising a series starter.

It’s also important to know what you can bid, so you need to run your own numbers. One student learned she could bid $2.00 and still be profitable. If you know you can bid more and will make money, then do it. But you have to know based on data.

When you understand your own numbers, you can bid confidently because you have data that shows how much you can bid and be profitable.

Thomas: Amazon likes the approach of the higher bids because they keep more of the bid money. Amazon would prefer that people keep outbidding each other until somebody is making the tiniest sliver of margin. Eventually, you’re going to be giving almost all your profit back to Amazon in advertising costs just to get that little edge.

The strategy may not work in 2025 or 2030 if people continue outbidding each other.

That’s why it’s so important to know your own numbers.

Experts like you and Chris Fox have different philosophies on Amazon advertising. But everyone agrees that you have to follow your numbers. Bryan Cohen might have suggested 35¢ per click, but that’s a starting place.

You have to experiment to see if you should move that bid up or down for you. It’s possible that 35¢ is a terrible bid for you, or you may need to be more aggressive.

Advertising becomes a little bit intimidating at this point because it requires math. It’s not vector calculus, but it does require addition, subtraction, division, and multiplication.

You break from the others when you instruct people to take the total amount of money and use that figure rather than Amazon’s number.

Bryan: Yes. People get angry when I say that, though.

Thomas: I’ve talked to almost all the Amazon advertising gurus. They’re all making money. But they all agree that measurement is the key. 

Bryan: I love that we have different ideas. If you’re following a strategy that’s working for you, then keep doing it. That’s why I don’t understand the angry responses from people. 

There’s evidence that all the strategies work for some people. It’s inaccurate to say one strategy doesn’t work because they all work for some people. I hope that authors will sample the methods and do what works.

Thomas: Approach it like a scientist. 

In what other ways has amazon changed over the last year?

New Markets

Bryan: Ads have changed a lot this year. In 2020, Amazon ads expanded into new territories like Australia and Canada. In early 2020, they expanded to Germany, Spain, France, and some other territories.

Thomas: Can you buy ads for those countries through the regular advertising dashboard?

Bryan: You have to create new accounts, but Amazon makes it easy if you go through your KDP dashboard. For each book, you click the “Promote and Advertise” button. You’ll see a dropdown menu where you can choose the country you want to create an ad for. Then it will create your account for you. And you only have to do that once to create the account.

Thomas: That’s a big change because it’s opening up new English-speaking audiences for American authors. 

Multi-Book Ads

Bryan: I run a copywriting agency that writes Amazon ads and book descriptions. This year, Amazon allowed advertisers to include multiple books in a standard ad if you didn’t include any copy in your ad. Multi-book ads, without copy, were available in some international territories. Now they’re available in the US.

You can create a campaign to advertise all 40 of your books, which will be shown to consumers one book at a time. You can create a campaign for all your books.

We thought Amazon would take away the ability to include copy because multi-book ads didn’t include copy in the international markets. But in the last couple of months, they allowed advertisers to write copy on their multi-book ads. 

So, we’re not sure what they’ll do with the words that go on the ads, but right now, in the US, you can throw as many books as you want into an ad, and you can include copy with your ad. 

In all the other territories, you can run multiple book ads, but you still can’t include copy.

Thomas: Amazon is constantly experimenting with their whole platform. They can do a split test and see the difference when they change the color of the “Buy” button. You might wonder why the button is so ugly.

It’s because that’s the color that gets the most clicks. If Amazon gets 1% more clicks with an ugly button, that’s a huge amount of money for Amazon. That’s one reason Amazon ads and Facebook ads are changing so quickly. They’re constantly testing and changing the rules, and that’s why it’s so important to keep up.

Amazon Advantage Accounts Discontinued

Bryan: There was a backdoor, high-level Amazon Advantage account available to some advertisers. Not everyone had access to it. But this year, they closed the door on it. 

With an Amazon Advantage account, authors could run certain ad types, including the Sponsored Brand ads we talked about earlier. Authors with a regular ad account could not run those ads.

Thomas: Were the Kindle lock screen ads only available through the Advantage Account?

Bryan: I’m not sure if you could run those through the Advantage account. I don’t know. But I do know that with an Advantage account, those Sponsored Brand ads, which look like a logo with three little book covers next to them that show up at the top of your Amazon search, you could not run those ads through a regular ad account.

But now you can.

The jury is still out on their effectiveness. Like lock screen ads, which I don’t recommend for most advertisers, if you get a click on one of these ads, it doesn’t necessarily mean the customer landed on your sales page.

Lock screen ads bring the reader to an intermediary page where they have to click again to get to your sales page. I don’t like it when Amazon changes the definition of things mid-stream because it confuses people.

Thomas: Do they charge you for the first click on the ad or the second click on the intermediary page?

Bryan: The first click. 

Thomas: So, the author advertiser has to pay for all the accidental clicks when someone grabs their Kindle wrong and accidentally clicks the ad? 

Bryan: That’s right.

Thomas: Lock screen ads, banner ads, and sponsored brand ads were more popular with traditional publishers. 

Bryan: Yes. It’s what they’re used to because it’s more like buying space in a newspaper, and it’s what they understand. But it’s not easy to track.

Sponsored Brand ads are the most confusing of all. 

Pamela Kelley, of the 20BooksTo50K® Facebook group, has some great “Why isn’t my book selling?” posts. She taught me that if a user clicks one of the book images in the sponsored brand post, it takes them to that book’s sales page. If someone clicks anywhere else in the banner, it takes them to an intermediary page that lists all three books again with greater detail, but it’s still not the sales page.

To my knowledge, Sponsored Brand ad reporting does not distinguish which was a click to a book sales page and which was a click to the intermediary page. Since it’s confusing, I do not recommend lock-screen or Sponsored Brand ads at this time unless you are making a heck-of-a-lot of profit. 

Thomas: The fact that we have to ask how a click is defined is a very bad sign.

Bryan, you work with people who’ve never run an Amazon ad before. What are the common mistakes people should avoid?

How can I avoid common Amazon Ad mistakes?

Bryan: Three things come to mind.

Double Check your Bid

Often people accidentally bid too high. They might enter the wrong number. When they see their budget spent, they don’t understand why.

The best way to check this is to enable all your stats. They aren’t all enabled by default. Enable all the stats and then look at your “Cost per Click” metric. If you believe you’ve bid 35¢, but the cost per click is higher than that, it usually means there was a user error.

Most likely, it means you accidentally bid 75¢, which is Amazon’s standard bid.

Keep it Simple

If you have five books, start by advertising one until you get your feet wet. You have to keep track of everything. If you suddenly go from tracking zero books to tracking ads and stats on five books, it’s overwhelming.

Don’t Expect Overnight Results

Advertising is a slow and steady process. Sometimes with these lower bids, 70% of ads don’t even turn on, and that’s a good thing. When people get upset because their ad isn’t spending or because their ad is spending, they panic because they expect immediate results. It’s not an immediate-results platform.

Start with a low bid. Double-check the bid. Start with one book and see how it goes. Don’t worry about everything happening right away.

Thomas: In other words, be faithful in the little things before buying ads on all 30 of your books. Tell us about your free course for beginners.

Bryan: On January 11, 2021, we’re starting a free community course called the Five-Day Amazon Ad Profit Challenge. It’s a lot of content for free. We love to help people learn to set this up themselves rather than making a magical promise on a webinar and then letting you figure it out later. We’ll have 47 support personnel on board for this event. They’re experienced authors who’ve taken the challenge before and had some success with ads. They’ll be available to help answer questions throughout the challenge.

We’ll walk you through it for free, and a lot of folks get results from the free stuff. You can register at Sellingforauthors.com/January. We do it every quarter, so if you miss it in January, click here, and we’ll redirect you to the most recent one. Or learn more on the Sell More Books Show.

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