Running an Amazon Advertising Campaign on a Low Budget
For about a year, Amazon US have been encouraging authors to pay for advertising. I always vowed never to spend anything on promotion, as I don’t make enough money from my writing to lose any of it, but I changed my mind recently after seeing my US royalties from my books decline to almost nothing. Reluctantly, I signed up to run an advertising campaign, learning what to do by trial and error.
First of all, you have to give Amazon permission to drain your bank account. Since the minimum budget is $100 for each campaign, you need that sum available before you sign up. Your advertising campaign won’t cost your entire budget if you are careful – but you’d better have it ready to lose if you do. So, for example, if you want to run six simultaneous campaigns, you would need a minimum of $600 in your bank account. I was pretty worried about giving Amazon permission to take that off me – but only until I learnt how the ads work. (See later.)
Once you have set up your advertising account, you can create a new advertising campaign for any of your books in Kindle Direct Publishing.
You’ll be asked to choose if you want to advertise by interest or products. This is a crucial decision because they offer radically different services.
Interest based ads let you choose broad categories of interest, like thrillers, horror and science fiction. You can choose multiple categories – but you can’t choose specific products. These ads appear on Kindle e-readers, where they will be seen by browsing Kindle owners.
Product based ads let you choose specific products. You can target books similar to your own or best-sellers or anything else, but the ads will not appear on Kindle e-readers. That is a huge disadvantage. It means these ads are less likely to reach customers in a buying mood. However, there is an option to show these ads on other related products. You can choose a small number of products to hundreds of them by using a search for keywords or book codes.
I tried both types of advert. (I’ll give my opinion later.)
After choosing the type of ad, you will have to choose your minimum budget. I set mine at the minimum $100, though you could set a budget of thousands.
Next, you have to choose the maximum amount of money you want to bid for adverts. This is where the process becomes complicated and tricky. Your bid enters a mysterious auction where the highest bid wins the right to be shown first, then the next highest … and so on. This process is baffling because Amazon don’t make it clear how this works.
You start by setting a maximum bid between two cents per click and infinity. The highest bidder gets their advert shown to a relevant customer. If it’s clicked on, the advertiser is charged one cent more than the next highest bidder’s max bid – not their max bid price. That means if they set their max at $1.00 and the next bidder set a max of $0.30 they would be charged $0.31 – but they’d be charged the full bid price if the next bidder was bidding $0.99.) Ouch! If it’s not clicked on, they don’t get charged anything. It counts instead as an impression – ad-speak for appearing on a customer’s screen. Impressions cost nothing.
It sounds like it makes sense to bid high and hope the next bidder is low – but that could cost you a fortune if you guess wrong.
Effectively, the top bidder will have their ad shown to everyone until they either use up their budget or stop their campaign.
Theoretically, someone wealthy could bid extremely high to get an ad shown exclusively. It’s not quite as simple as that, though. If an ad isn’t clicked on after a certain number of impressions, Amazon will consider it not successful and stop showing it, replacing it with another one.
Adverts are delivered to customers in a mysterious auction where the suggested bid can be quite high – sometimes 30 to 40 cents per click is the suggested bid – which is a lot considering the typical royalties from a Kindle book are under a buck.
After deciding how much to risk spending on each click, you will need to write a tagline and a short synopsis of your book to appear in your adverts. Your ad will be rejected if doesn’t follow Amazon’s strict code. The tagline should be something interesting that will make people want to click on your ad – but nothing misleading. You don’t want people to click on your ad unless they are genuinely interested in buying your book because clicks cost money.
An advert will look like this:
When you are happy with your ad, you submit it to Amazon for approval. It usually takes about a day before it goes live. It will take about three days to receive data on how it is doing.
Timidly, I tried just two ads with very low bids. (I hoped one person out of ten would buy my book if they clicked on the ad so it would break even.)
I did an interest-based advert for The Bone Yard and Other Stories.
I did a product-based one for another horror book.
My interest-based ad was shown to only 100 customers in a month. It wasn’t clicked on once – so it cost me nothing. (That was a relief.) Obviously, my bid was too low to outbid other authors. (I increased my bid in increments up to ten cents per click. Nothing happened. I didn’t dare go higher than that because it wasn’t worth the risk. Evidently, you need to bid pretty high to guarantee ad space using interest-based ads.)
In contrast, my product-based ad was shown to over 1600 customers. It was clicked once and produced one sale. The ad cost $0.02 and earned me $1.00 in royalties. Not bad for a very cheap ad!
Since then, I’ve done several more low-priced product ads, which are a cost effective way of reaching customers without throwing wads of money around. I select about fifty to a hundred products that I think are like my titles. I could select more products of less relevance, but then my impression to click ratio would be lower and Amazon would stop showing my ad. I’d also risk wasting money appealing to the wrong audience. It often takes a few hours to set up a product campaign because you need to get the product codes from Amazon. Luckily, it’s easy to repeat an ad when it ends because the information can be copied for a new campaign.
I won’t bother running another interest-based one because the categories are too general and the competition for ad space is too tough. Too many authors are willing to overbid, risking a lot of money. You could blow your budget in a day without making a profit. Interest-based ads would be better if they could be narrowed to sub-sub-sub categories, targeting the right customers. Then I’d have another go running one – but right now I’d not bother with another one.
Some Tips for Running a Successful Low Budget Amazon Advertising Campaign
Choose to advertise by products.
Select a 100 or so Kindle books like your own.
Add more after your campaign is running if it doesn’t get many impressions.
Make sure they are popular titles before adding them to your list – but remember the most popular ones will be in a bidding war.
Keep your bid low unless you want to risk spending your whole budget.
Don’t click on your own ad! It costs you money!
Delete products from the list if they are not similar to your own book. It will improve the click ratio.
Don’t add irrelevant products to your advertising list just to increase the number of impressions. They will result in clicks that don’t lead to sales.
Don’t have two books competing in a bidding war against each other.
Remember it might cost more to win bids at the weekend, when customers are more likely to be browsing on Amazon.
Don’t terminate a campaign if it gets a lot of impressions with few clicks. That’s free advertising!
Some Bad Tips for Running an Ad Campaign
Set your budget at $5,000,000.
Bid $500 per click.
Advertise on all interests.
Ignore the frantic calls from your bank manager.
Sell your house to pay for the next ad.
It is possible to run an ad campaign for a few dollars if you are careful and take the time to study the market.
Just don’t expect to turn your book into an instant best-seller.