Amazon Marketing Services: My Experiment, Sales, & Results

The self-publishing business consists of two parts. The first part involves producing a book. Many authors write their books while some use ghostwriters. The second part includes marketing a book. Marketing aims to raise awareness for a product, service, or brand. When people become aware of an item, only then can they consider purchasing it. Marketing is essential to achieve success and necessary in highly competitive environments like the book industry, where hundreds of thousands of authors compete globally for sales. The book industry must also contend with alternatives such as digital media in the form of blogs, video platforms, and streaming video services. To a lesser extent, publishers and authors must compete against bad actors and schemers. For instance, Chance Carter scammed his way to hundreds of dollars daily on Amazon, which hurt the marketplace, self-publishing, and authors wallets.

Some authors don’t promote their books because they don’t understand marketing or believe marketing is useful. Some think that having a presence on Amazon is enough, which is a mistake. While a minority of authors do well without promoting their wares, most success stories stem from robust marketing plans. For example, many bestselling authors have extensive email lists. An author with 50,000 subscribers can email her fan base about her upcoming book. If 2 percent of her subscribers make a purchase, she will sell 1,000 copies, which will start a positive ripple effect regarding rankings, visibility, and sales. Furthermore, Amazon may take notice and manually add the book to their recommended lists and customer emails. Yes, manual intervention and private deals do take place on Amazon and other marketplaces. Everything isn’t automated and algorithmic as we are to believe.

There are many free and paid ways to promote books. One paid method I’ve experimented with is Amazon Marketing Services (AMS). AMS differs slightly for authors and vendors so I’ll recount my experiences as an author.

AMS Overview

Amazon Marketing Services (AMS) offers targeted cost-per-click (CPC), or pay-per-click (PPC), advertising solutions to help Amazon authors reach new customers and drive sales on Amazon.com. It’s like Google Ads, but advertisements appear on Amazon only.

What type of ads are available?

Authors can run sponsored product and product display ads (ebook only). Sponsored product ads appear on desktop and mobile browsers as well as on the Amazon smartphone app. Authors use keywords to target customers. Product display ads appear on desktop detail pages and may qualify for additional ad placement on Kindle E-readers. Ads target customers by related products (books or otherwise) or by customer interest (genre/category).

AMS Ad Types

How much does it cost?

AMS uses a cost-per-click, auction-based pricing model. They recommend you set the maximum cost-per-click you are willing to pay, for example, $0.10. Budget settings and requirements differ for ad types.

How are sales tracked?

Sales attribution depend on the ad type and can be attributed to ASIN, title, and brand. Each ad type uses one or a combination of these attribution methods to report ad sales. A customer must click your ad and purchase your book within 14 days for attribution.

How do you measure return on investment?

AMS records the amount you’ve spent, average CPC (aCPC), estimated total sales, and advertising cost of sales (ACoS). The data appears on your dashboard and is available to download in CSV file format. You would use total cost and total sales to measure your return on investment.

Are results in real-time?

No. Campaign metrics can take up to 14 days to appear and do not include Kindle Unlimited or Kindle Owner Lending Library royalties generated by the ad.

Where can you learn more?

AMS has three channels to learn more about their services.

How to Create an Ad

Ad types differ in setup but require similar steps.

Steps to create an ad:

  1. Click on New Campaign and choose Sponsored Products or Product Display Ads.
  2. Select the book you want to advertise.
  3. Choose a customer targeting method. Learn more about targeting.
  4. Enter your campaign name, ad period (specific date or no end date), minimum CPC, budget, and advertising copy, where applicable.
  5. Submit your ad for review.

Amazon will notify you via email about the status of your ad. If your ad is approved, it will start to run as soon as possible or on the date you specify. You can pause or terminate your ad at your discretion. You can update the price and metadata for a live ad. For a cover update, you’ll need to create a new campaign for the updated cover to display in your ad. If your ad is rejected, Amazon will explain why. You cannot resubmit a rejected ad; you must create a new one and submit it for review.

My Experiment

I began using AMS in January 2015 to promote my WordPress plugins book. I used it sparingly and my total spend for the year was under one dollar and resulted in one sale. In 2016, I used it once. I paid $100 and achieved sales of $60.15 for an advertising cost of sales (ACoS) of 166 percent, which wasn’t impressive and a terrible return on investment. In 2017/18, I gave AMS another shot and committed more financial resources and time.

My Strategy

In 2015/16, I used product display ads. In 2017/18, I switched to sponsored product ads because they are more visible and prominent on pages and in search results. By contrast, a product display advertisement sits to the right of a page and is ill-positioned to catch the attention of most visitors.

I thought more about Amazon’s search engine and SEO. I believe most people shop for books by their titles. Secondarily, shoppers search for books by authors and keywords. For sponsored product ads, you can choose automatic or manual targeting. With automatic targeting, Amazon targets all relevant customer searches based on a book’s metadata. With manual targeting, Amazon features your ad based on keywords that you choose and approve.

Automatic targeting sounds imprecise, random, unproven, and gives Amazon control of where my ad appears. With manual targeting, I’m in control of where my book shows up. I chose manual targeting because I trusted my keyword selection over Amazon’s “relevant customer searches” approach and didn’t want to leave my money to chance. For example, Amazon’s approach could pair my investment book with keywords/phrases like “money,” “personal finance,” and “how to save for retirement.” While these keywords are relevant, they’re too broad a match for my book. I manually added keywords like “investing for dummies,” “stock market 101,” and “a random walk down wall street” to increase search relevance and accuracy.

My 2017/18 Results

I spent $1016.65 for sales of $1308.77 for an ACoS of 78 percent. A campaign for my WordPress book achieved an ACoS of 25 percent with $37.12 spent on purchases of $151.50, which was my best outcome.

Ad spend/costSalesACoS
2015 $          0.29 $          8.973.23%
2016 $     100.00 $        60.15166.25%
2017 $     572.63 $     546.15104.85%
2018 $     444.02 $     762.6258.22%
Total $  1,116.94 $  1,377.8981.06%
Observations

At first glance, my 2017/18 results appear to be money well spent, but this is incorrect. I must account for my royalty/revenue share to get a better understanding. Between ebooks (70 percent) and paperbacks (60 percent), my average royalty is 65 percent. (Ebooks priced at $0.99 attract a 35 percent royalty.) A 65 percent royalty on sales of $1308.77 yields a pretax profit of $850.70 (the difference, $458.07, goes to Amazon). After spending $1016.65 and sharing revenue with Amazon, I lost $165.95. I achieved in ACoS of 78 percent but would need an ACoS of 65 percent, my revenue share, to break-even. Breaking-even wouldn’t be terrible because sales would improve seller rankings and visibility. However, to make the expense worthwhile, I would like an ACoS of 50 percent or less.

2017/2018Ad spendSalesACoSAMZN’s shareMy shareProfit/loss
Actual$1,016.65$1,308.7778%$458.07$850.70($165.95)
Break-even$1,016.65$1,564.0865%$547.43$1,016.65$0.00
Goal$1,016.65$2,050.0050%$717.50$1,332.50$315.85
Criticisms

I’ve always been a critical thinker, which has helped me to see the truth in things. It’s a vital skill to develop in a world full of illusions, theatrics, and deceptions. Let’s review AMS critically.

The CPC Model

The purpose of CPC and PPC advertising platforms is for users to pay for clicks to get traffic, leads, customers, and sales. Some advertisers will succeed, and some will fail regarding goals, customer acquisition costs, return on investment, and so on.

AMS defaults keyword bids to $0.25 for sponsored product ads. All things being equal, 100 clicks will cost $25. A standard conversion rate of 2 percent will yield sales of $19.98 for paperbacks selling at $9.99 and $5.98 for ebooks selling at $2.99. Before we get into revenue share and taxes, the results are appalling. You could lower your bids, but you’ll get fewer impressions, which will reduce your potential for sales. If you increase your bids, you’ll get more impressions at higher costs with no guarantees. AMS probably produces many losers and very few winners, which creates a win-lose, profitable platform for Amazon.

The AMS Value Proposition

CoinsThe problem with CPC isn’t the model; it’s Amazon. I’ve used Google Ads to my satisfaction, and Facebook Ads have worked wonders for thousands of advertisers. How many authors have reported success on AMS? Hardly any.

AMS isn’t equivalent to Google Ads or Facebook Ads. The latter offer sophisticated advertising platforms. Users get tools, recommendations, insights, strategies, case studies, advice, and support to optimize their campaigns. For example, Google’s keyword planner tool provides search volumes, competition, and bid scenarios. Facebook enables you to target ads by gender, age, location, and more. AMS doesn’t offer tools and uses basic targeting methods.

Google and Facebook depend on their advertising platforms for revenue, which drives them to improve their offerings daily. By contrast, AMS is a low priority, nothing burger in an ever-expanding Amazon ecosystem. Jeff Bezos has more important things to focus on and more significant battles to fight, for example, their Whole Foods acquisition, Amazon Web Services, and competition from Walmart and FANG. AMS has been hung out to dry, which is why the platform doesn’t see many improvements and upgrades. AMS’s shortcomings don’t stop there:

  • Amazon’s customer base and reach are much smaller than Google’s and Facebook’s.
  • Sales figures are unreliable, and it’s near impossible to reconcile your ad spend. Campaign metrics may take up to 14 days to appear and do not include Kindle Unlimited or Kindle Owner Lending Library royalties generated by the ad. Total sales are an estimate. AMS states, “Estimated total sales shows you the total price of orders customers placed after clicking your ad. This may include the removal of purchases that were canceled within 72 hours of the initial purchase or any declined purchases. Your KDP sales reports will show you the final sales numbers, which may be different from the number you see here.” “May” is used too many times to trust the numbers. (Advertising spend and billing, however, are incredibly accurate and timely.)
  • Users cannot filter data on the dashboard.
  • Only two ad types are available for authors.
  • Users cannot split test ads efficiently.
  • Users don’t get recommendations or insights to optimize their ads.
  • No advertising tools are available.
  • Users cannot use demographics or behaviors to target customers, only keywords, product information, and genre, which are less specific.
  • Keyword research, volumes, competition, and projected bid costs are not available.
  • Users cannot add negative keywords.
  • Users cannot do bulk edits, which would be helpful to change bids.
  • Bid input fields are flimsy. (I thought I changed and saved a bid, but I didn’t, which resulted in a click that cost me $20.52. My dispute was to no avail, and few details were provided.)
  • Analytics and reporting are nonexistent. Users must track information manually and create reports with a CSV file.
Final Word

Today, success in publishing is less about how excellent a book is and more about the reach, relationships, and connections an author has. A sizable email list, thousands of engaged social media followers, and loyal fans help to achieve sales targets. A robust network will yield many reviews, endorsements, and sales within days to stifle the competition. Additionally, marketing is necessary to build awareness and spread the word. That’s not to say an author without reach and marketing can’t hit a home run, but chances are low. Five-figure marketing budgets used by traditional publishers play a role too and surpass the budgets of most indie and self-published authors.

Given my prescription for success, I won’t be using AMS again. AMS is not a viable or reliable advertising solution for authors. It’s dated, inefficient, one-dimensional, and needs upgrades. It can be useful for niche books like my WordPress book; however, unreliable sales data is too big a problem to overcome. Perhaps it works better for vendors, but I don’t know. I wouldn’t recommend Google Ads or Facebook Ads for authors either, although I would favor Facebook over Google for marketing books.

Instead of wasting money on AMS, I’ll stick with free marketing activities to promote my books. I’m better off investing in marketing and business tools to grow/expand my email list, brand, online presence, and reach. Those areas will produce higher returns than AMS.

 

About this Post

I use affiliate links on my website, but my opinion isn’t for sale. I may earn a commission if you click on an affiliate link, but it won’t cost you extra. I only recommend what I use, have used or vetted in the best interest of my readers. For more details, see chadtennant.com/privacy-policy.

 
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