Nov 012016
 
One of my ads displayed on Amazon.com

One of my ads displayed on Amazon.com

Amazon ads. I was tempted to give them a try. After all, they differ from all other promotion we have done for the book so far.

When people click the ads, they’ll land on Amazon product page of University of Solitude. In all my previous and ongoing marketing efforts, I have tried to bring visitors to Universityofsolitude.com website, and not to Amazon. Could bringing them to Amazon yield better results, in terms of sales? I decided to give it a try.

Pluses and minuses of Amazon Marketing Services

Before starting the campaign, I considered pluses and minuses of Amazon promotion:

Pluses:

  • People are in the buying mood when they see the ads. Browsing pages of Amazon, they are likely ready (or even eager) to purchase something. After all, we don’t visit Amazon to read news, do we?
  • The ads are displayed specifically to book readers. If you choose product display ads, and select, for example, “Memoirs” book category, people who check other Memoirs on Amazon will see your ad. Book readers, shoppers, people interested in your genre. We can hardly target a better audience, or, can we?
  • Easy setup, no special knowledge needed. You can set up a campaign in five minutes. Amazon will review it, typically within 24 hours, and people will start to see your ads. No additional work required.

Simple setup and targeted audience ready to purchase. For an internet marketing newbie, it must look like a golden opportunity!  But before you go and spend thousands with AMS, I suggest you to read my post to the end. Amazon promotion has some downsides as well.

Minuses:

  • You can’t control what people see when they click the ad. You can’t show them your book trailer, or a specific review on the top of the page. This you can do on your own website, since you can freely modify it. You can work with the visitors, navigating them to various sections of your website, trying to help them to make the right decision—a decision to purchase your book. But you have very little control over the design, functionality, or even the content of your Amazon product page.
  • People either buy the book, or leave your product page. They won’t subscribe to your newsletter; they won’t like you on FB…. Amazon pages does not support such functionality.
  • Amazon does not provide traffic statistics. How many people saw your product page today? Which countries did they come from? How much time did they spend on the page? How old were they? Where did they navigate from your product page? Etc, etc. When you attract visitors to your own domain, and set up a free Google Analytics account, you can learn virtually everything about your visitors. Advertising on Amazon, you know nothing….
  • Minimal budget of $100 for a product display campaign. In my opinion, this is too much, especially if one wants to test the waters. And it’s a non-sense policy … I’ve never seen such limitation on Google or Yahoo advertising programs. (Don’t worry; I’ll show you how to bypass their stupid limit…)
  • Very little options in campaign setup. Setting a campaign is fairly easy; probably a trained monkey will manage setting an Amazon ad campaign. However, a real marketer prefers to have as many options as possible – targeting by gender, device, country, showing ads only in specific times of the day, and so on and so forth. Amazon does not allow such customization. You just choose the keywords, or the product categories, set the budget and click the button. . . .
  • The traffic is not recurring, and can never become recurring. Once you stop paying, you’ll stop getting impression and visitors. Not a single more (very different to the core promotion techniques I work on, and suggest you to use, such as YT channel, SEO, building your personal brand).

 

My case study

Pondering the pluses and minuses can give us some idea of Amazon ads. In order to see whether it works, however, we have to try it. So I set up two campaigns.

Campaign one: Sponsored Product Ads (keyword oriented, ads show when people search for a particular keyword on Amazon)

Interest based campaign on Amazon ads

As you can see on the picture, I chose a daily budget of $5, and selected the keywords to target. I believed them relevant to the University of Solitude.

Then I set a maximum bid of 10 cents/click. Honestly, you can’t expect better conversion rate than 4% on any kind of pay par click campaign. Knowing our royalty of about $2.7 for every copy of University of Solitude sold on Amazon, 10 cents was about the maximum I could bid to realistically make any “profit”.

Note: We donate all royalties to Red Cross, so the money spent on PPC campaigns go from my own pocket, and I’ll never see them again. But I still wanted to try this promotion technique, so you, the reader of my blog, can consider whether it is possible to achieve a positive ROI with it, and apply it successfully..

The results? In two weeks, our ad was served 526 times, mostly for the keyword “books for inmates”. We got some impressions for “books about prison”, “books for prisoners”, “CIA stories” and other words.

However, we got no impressions for keywords like “best inspirational stories”, “inspirational stories”, etc.

Amazon did either not find our book relevant for those keywords (How the hell can they know? 🙂 I doubt they read the book to consider the relevancy. If they did read it, they’d find it relevant for “inspirational story” and similar keywords), or our bid was too low and Amazon simply served other advertisers’ ads, since they offered more for a click. This is likely the case with at least some of the keywords.

In the whole two week period, nobody clicked the ad. Nobody!

Impressions: 526; Clicks: 0; Sales: 0; Total amount spent: $0

 

Campaign two: Product display ads (interest based, they show next to books people browse on Amazon, in a categories of advertiser’s choice)

Interest based campaign, displaying in product categories

I chose “Biographies and Memoirs”, and “Politics & Social Sciences” for my categories. I would love to choose something more specific, going deeper into Amazon book category tree. For example, “penology”, or “Iran” (such sub-categories do exist on Amazon), but Amazon does not offer such an option, and let you choose only very broad categories.  

I set the campaign budget to the required minimum of $100, and my default bid to 10 cents again. After a few days, when I saw the campaign hardly getting any impressions, I decided to experimentally double the bid to 20 cents per click, even though I was 100% sure one cannot achieve a positive return on investment with such a high bid on a click, with a book of our selling price.

 

Results so far (this campaign is set to run until Christmas):

In eight days, our ad was served 700 times, and five people clicked the ad. Nobody of them has bought the book.

For product display ads, Amazon doesn’t provide any analytics, so I have no idea whether those clicks came from people browsing memoirs & biographies, or politics & social sciences books. I know nothing for that matter J

Impressions: 700; Clicks: 5; Sales: 0; Total amount spent so far: $1

 

 

How to bypass the minimum budget requirement?

In order to bypass the minimum budget requirement, set a short term campaign, and bid low.  Amazon doesn’t have a huge traffic in many of their book categories, and many advertisers try to promote their books in these categories.

Once the campaign is over, you won’t reach the $100 threshold. Maybe you’ll spend just $1, as I have spent so far :). Amazon will charge you for exactly what you spent, the immediate budget settings doesn’t matter. They can’t charge you more, because it’s not your fault that your ads weren’t served often enough to attract more clicks. . . .

 

 

Things I learned from the experiment

Amazon advertising program seems attractive, and the company succeeds to attract many new advertisers to their program. However, most of these advertisers (publishers, writers) have unrealistic expectations of the conversion rate (the percentage of people who not only click the ad, but actually purchase the book).

Following their unrealistic expectations, most advertisers bid too high on a click. This behavior increases the minimum cost per click for all advertisers, beyond the number with which they can realistically turn profit. At the end, they will get clicks, and also purchases, but they will spend (much) more money than they will actually make from royalties resulting from their Amazon Ads promotion.

Sooner or later, they will quit the Amazon advertising program. However, considering that several hundreds new books are published daily just on Amazon.com, new writers and indie publishers will always replace the advertisers who quitted the program. And they will again bid way too high and fail to make a positive return on investment at the end of their campaigns.

At the end of this never ending circle stays the only winner in this advertising program: Amazon company. They take the advertisers money, and they also take their share from each sale you make. They spend nothing, and earn twice. Good for them that you are in the program!

Final verdict

I would not recommend Amazon advertising program. But if you decide to try it, you should never bid more than 1/25 of what you can make from selling a book (if your royalty is $2.5, you should not bid more than $0.10). Ideally, you should bid less than 1/50 of your royalty, because the conversion rate will be more likely somewhere around 2%, not 4%.

You may be lucky and find yourself in a specific niche with low bids, having an ability to bid even the minimum of $0.02 per click, and still get decent number of impressions for your ads. If it is a case, go on and advertise!

But if it is not a case, and you need to bid more than 1/25 of what you can make from selling the book to get impressions and clicks for your ad, I strongly suggest you to quit the campaign as soon as possible.

Exception proves the rule

You might have written a series of books, believing that people will buy the second (and third) volume, right after finishing reading the first one. In this case it could make sense to run a campaign for a first book, even with negative ROI, if you believe that the final ROI of the campaign (including sales of other books from the series) will be positive. But please, measure twice and cut once if you decide to follow such a risky strategy. . . .

That’s it for today. I’ll keep running (and modifying) my 2nd campaign until Christmas, and let you know how it went once over.

Have a great week, try to live in harmony with yourself, and with the others. I will try the same 🙂 In the next post I’ll update you on our progress with YouTube channel and SEO of UniversityofSolitude.com. Meanwhile, take care!

Matej  

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Written by Matej Valuch

Matej Valuch

Having succeeded in building residual income from the network of content-rich websites, Matej currently devotes nearly all his time to non-profit projects, mostly in the spheres of philosophy, start-up, and writing. Sharing real marketing studies and experiments with his audience, Matej tries to help other writers and marketers to succeed with their projects.

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