Advanced Amazon advertising for Authors

I was pretty sure I  sucked at Amazon ads.

Which is mostly fine: I’m still making money and I figured I couldn’t *really* spend big on Amazon ads until I had a bunch of finished series out.

Tonight I took a look at the ads I’m still running.

My average cost per click is about $0.30; and my average Advertising Cost of Sales (ACoS) is about 500%. Which means, basically, that I spend $5 to make $1 (not exactly though, because getting more visibility also gets more borrows and page reads.

The nice thing about advertising is that I can keep a better rank with a higher price – so I changed Shearwater to $3.99. In the last month, I spent $400 on ads, and made $1200. My first reaction is to think, damn that’s not so good. 1/3 of my profit – gone.

So I was tempted to cancel the ad and just focus on writing more books.

But that would be a mistake.

The other book I’m advertising is The Scarlet Thread – my only book with a sequel out.

I spend about $600 on ads, and made $1400. However, the sequel, Golden Shears, made an additional $2200 with no advertising.

Obviously, having more completely books in a series would make it easier to spend more on advertising and see bigger profit margins.

But hold on, let’s do a thought experiment.
Remember when I send spending $400 to make $1200 wasn’t great?

What if I was spending $40,000 to make $120,000… a month.

Now it seems pretty damn exciting, right? Who cares if you lose $40,000 – you’re still making $80,000!

Of course it would be risky to just start spending more money (and it’s actually not that easy to do). But rather than quitting, what I need to be doing is improving.

And you can’t improve without goals, so here’s mine for the summer of 2017.

#1. Test more ads. Specifically, even though it’s more competitive, I need to to get my Average Cost per Click lower, down to $0.20 if possible. That’s not easy, because there’s a lot of competition – but I’m going to try it by focusing on product display ads for new releases and books on preorder in my genre (assuming that, since they aren’t out yet, there will be less competition for them… plus if I can get lots of cross-buys, I’ll start showing up in their also boughts, which will be great for long-term sales).

#2. Get my ACoS down. I’d be super happy if I could get an ad down to 250% ACoS. I have done it before. Basically, it’s a problem of conversion, so I need BETTER ad copy, and I need BETTER sell through (with an amazing description). I should be testing ad copy and blurbs until I can make this happen. If nobody was clicking on the ads at all, I’d guess it was a problem with the cover. If they are clicking but not buying, my sales copy sucks. The sales copy needs to match and deliver on the promise of the ad.

#3. Spend $10K in one month on ads. This is scary stuff, especially since I only have a few books out. I’d start slow and up my spending bit by bit. If I had an ad performing at 250% ACoS, I’d raise my daily spend to $50, then $100, then $200, then $500 and monitor sales. Amazon rarely actually spends your daily budget, but you’d need to monitor spend and track daily income.

Theoretically, I’m spending about $1k in ads right now and making $7K… if I spend $10k a month in ads, I *could* earn $70K a month. That would be even easier if I get a few month books out this summer (readers could check out the title I’m not advertising when they finish the ones I am).

If I can spend $10K and make a profit, hypothetically I could spend $20K or $50K a month on ads and suddenly be one of the highest-paid authors on Amazon.

That’s a risky assumption, and I’ll need to be careful… but it is exciting that writing books is a truly scalable source of income, in which a 10X increase in income is possible with a larger ad spend.

I’ll update this post once I reach the goals I posted above with the results.

About Derek Murphy

Derek Murphy is a book designer with a Ph.D. in Literature. He's been featured on CNN and spoken at dozens of writing conferences around the world. These days he mostly writes young adult fantasy and science fiction, while helping authors build profitable publishing platforms. Find me
  • Matt

    Derek how sophisticated is your targeting? Are you going after popular authors? Or are you building look-alike audiences using your list? Thanks

    • I don’t think “Sophisticated” is the right word.
      I looked at the top 100 in young adult scifi and fantasy, and used all the author names and book titles that were similar to my books. I could have found a thousand very low selling titles, hoping to get a lower cost per click, and maybe that’s also a good idea (to look at the top 20 of young adult>>scifi and fantasy>>scifi>>thrillers>>technothrillers, etc. But I want my book to show up a lot; and there’s a credibility issue – I don’t want my book to show up on books that aren’t selling well with crappy covers; I want my books to show up next to the mega bestsellers in my genre. Better branding and positioning.

      My pages convert decently, so I know I can afford to spend more than average and brute force my way in. If your Amazon page doesn’t already convert well and you need to drive more traffic to make a sale, you’ll need to get your cost per click way down – but you shouldn’t be spending on ads, you should be spending on new covers/better description or focusing on reviews.

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