Amazon Marketing Services (AMS) ads are a way to get your Kindle books in front of readers browsing the Amazon US store. They’ll also help you sell paperback and audio books, but your book must be available for the Kindle to advertise it using AMS ads.
Until a few months ago, you could only advertise books in KDP Select, so I didn’t pay much attention to AMS. But then Amazon opened the service up for all books, and I started to see authors report that they were seeing success with the ads.
I was jaded when it came to pay-per-click advertising. I’d tried Facebook ads with little success, mainly because my books’ niche is small, which made targeting the ads difficult. I lost money on them. Despite that, I decided to give AMS ads a go. From the author reports I’d seen, the clicks were still cheap.
AMS Ads Explained
There are two types of ads: product and sponsored. Since I’ve only tried sponsored ads, I’ll discuss them in this post. If you’re wondering what they are and where they appear, check out the following book:
Scroll down to the also-boughts section (Customer who bought this also bought). Underneath it you’ll see another strip of books, under the heading Sponsored Products Related To This Item. Regardless of where you live, do this at the Amazon US store. AMS ads don’t run in the other stores.
Now search for epic fantasy using the search box near the top. Scroll down to the bottom of the results page. The last two to four books are labeled with Sponsored.
Now you’ve seen the two places where sponsored ads show up.
Let’s get a few terms out of the way, in case you’re not familiar with pay-per-click (PPC) advertising. You bid on keywords related to the book you’re advertising, and when the platform wants to show an ad, it (in this case, Amazon) looks at all the bids and shows the ads with the highest bids. For example, when you searched for epic fantasy, the ads you saw had the highest bids for the keyword epic fantasy.
In reality, it’s usually not that simple. Often other factors are taken into account, such as how well an ad has performed in the past, and how relevant the product is to the keywords. But that’s secret sauce stuff. Nobody knows what other factors Amazon uses to determine which ads to show.
An ad gets an impression when it’s shown. For example, if a book ad has been shown 20 times, then it has received 20 impressions.
A click is recorded each time a browser clicks on the ad. So if 10 people have clicked on an ad, the ad has received 10 clicks.
When someone clicks on your ad, the cost to you is the cost per click. The amount you’ll pay won’t always be the same. I’ll explain why in a minute.
What to Track
When you run AMS ads, you’ll want to track these metrics:
- The click through rate (CTR). If your ad is shown 100 times and 2 people click on it, then your CTR is 2%, meaning that 2% of the people who saw your ad clicked on it.
- The conversion rate. This measures how many people who clicked on your ad actually bought your book. Your ad could have a fantastic CTR, but it’s not leading to sales.
- The ACoS. This tells you whether your ad is profitable. An example will be easier than explaining it. Let’s say you’ve spent $10 on ads and sold $50 worth of books. Your ACoS would be 20%, because you spent 20% of your revenue on the ad. You can calculate it by dividing the amount you’ve spent by the amount you’ve made and multiplying the result by 100.
You might think that ads are profitable as long as the ACoS is below 100%, but that’s not true. Remember that you’ll only earn 35% or 70% of each sale. If you get 70% of each sale, then your ACoS has to remain below 70% to be profitable. If you’re only earning 35% per sale, then you have to keep your ACoS below 35%. To muddy the matters further, paperback sales are also reported and taken into account (and maybe audiobooks are too–I don’t know).
My Experience with AMS Ads
With that out of the way, I can discuss how I’ve done with AMS ads. Better than Facebook. Much better. Here’s some data:
In the screenshots, the ACPC is the average cost per click. Some clicks were more expensive, some less. Because which ads to show involves an auction, the price you pay for a click isn’t consistent. You set the maximum amount you’re willing to pay per click, and Amazon takes that into account during the auction. If you’re willing to pay up to 0.10 per click, and someone else is willing to pay 0.15, the other author will win—maybe. As I said earlier, Amazon is probably taking other factors into account.
Also, you won’t always pay the maximum you’re willing to bid. If your maximum bid is set to 0.10, but other authors are bidding 0.05 or less, then you only have to pay 0.06 to beat them. And keep in mind that the auction involves what you’re willing to pay. You don’t actually pay unless someone clicks on your ad.
My numbers are smaller than some you’ll see floating around because I’m targeting a small niche (lesbian fiction). My ads get a few thousand impressions a day. Larger niches can rack up millions during the same time period. But that doesn’t matter. My results are great so far.
I believe I’m getting better results with these ads than I did with Facebook ads for the following reasons:
- Readers browsing books on Amazon are there to buy. That’s not true on Facebook, where people are there to socialize and watch cat videos (and these days, to talk politics, but let’s not go there).
- The cost per click is much cheaper. Most of my clicks are less than a dime. On Facebook, clicks could be 0.50 or more. When advertising a cheap product like a $2.99 eBook, expensive clicks aren’t sustainable, but 0.03 clicks are.
- Targeting is much better. Authors are advised to target other authors on Facebook, but I couldn’t do that because authors in the lesbian fiction niche don’t have hundreds of thousands of fans on their pages, and so Facebook doesn’t offer their pages as potential targets. On Amazon, I can target lesbian fiction, lesbian romance, lesbian mystery, etc., and get my books in front of buyers who are looking for books like mine.
- You can sell full-priced books using AMS ads, making it easier to create a profitable ad. The same didn’t appear to be true of Facebook ads, where free, discounted, and cheap box sets books do better.
I’ve only tried sponsored ads, because other authors reported that the product ads don’t work as well. Also, you have to commit to spend $100.00 when doing product ads. There’s no minimum commitment for sponsored ads.
I’d love to tell you the rules for how to make your ads profitable, like to pause keywords when they have X impressions but no clicks, or when the CTR falls below Y, or whatever. But honestly, nobody really knows the best approach yet, and what works for one keyword and book may not work for another. We’re all experimenting. It’s so cheap to run ads that the best thing you can do is jump into the pool and run your own experiments.
Some authors report great success by using author names and book titles as keywords. That’s worked for me too, but so has using niche keywords like lesbian fiction. This may be one case where it’s an advantage to be in a smaller niche. There’s not as much competition, so the clicks aren’t as expensive as they are for something like epic fantasy.
Drawbacks to AMS ads
Nothing is all good or bad, and the same is true of AMS ads. Here are some drawbacks.
- You can’t scale them. If you have a keyword that’s converting like gangbusters, raising your bid or increasing your daily spend for the campaign doesn’t lead to more impressions. In fact, on most days, Amazon won’t spend anywhere near your daily budget. Running these ads won’t lead to the heady heights that Facebooks ads did in the early days, but they will help you sell more books.
- Reporting is slow. Clicks and impressions are reported in a timely manner in the AMS dashboard, but if you make a sale, you won’t see it in your AMS dashboard for 3-5 days. I don’t know why. A sale should just involve updating the AMS database, but unfortunately, the delay is there. That means you have to wait 3-5 days to see if a keyword is converting.
- The ads only run in the US store. For my Self-Publishing for Canadians book, I can’t use them to reach readers who shop at amazon.ca.
- Some book pages have 20+ pages of ads. When I checked the Game of Thrones book page, it had 24 pages of ads. If your ad is on page 23 of 24, it’s unlikely anyone will see it. Which leads to…
- Nobody knows what an impression really means. Does an impression mean that your ad was visible on the page, or does it mean that your ad was on page 23 of 24, and it counts as an impression regardless of whether someone actually clicks through to page 23?
- Nobody is really sure about what sales are reported in the AMS dashboard. Is it only those attributable to someone clicking an ad, or all sales? Based on what I’ve seen, I believe that only sales due to an ad are reported. Not only that, if someone clicks on an ad and buys more than the advertised book, those sales are also reported in AMS. I believe that sales of one of my advertised books, and a couple I’m not advertising, were reported in AMS for another book I’m advertising. If that’s true, someone clicked on the ad for one book, and from there bought a few of my other books.
- ACoS evaluation isn’t that simple. Paperback sales are reported in AMS, which have a different royalty rate to Kindle books. This makes the calculation of the actual ACoS a little more complex. An ad with an ACoS lower than 70% may still be losing money if a lot of the sales are paperbacks. Also, are audiobook sales reported? I don’t know the answer to that question.
But all that aside, AMS ads are a cheap and effective way to get your books in front of readers who are browsing Amazon, ready to buy. However, they won’t propel you to the stratosphere. They’ll sell a few copies of your books here and there. There will be days where they don’t move any books at all.
If you don’t have a large advertising budget and you have Kindle books, try AMS ads. A successful ad won’t sell hundreds of books a day, but hey, turning $10 into $70, or making a few sales a week for a book that wasn’t selling anything, is nothing to sneeze at.