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Board Member’s Memo: How to Use Amazon Ads to Boost Sales

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by Ian Lamont, Founder, i30 Media —

Ian Lamont

Online and mobile advertising has been a mixed bag for indie publishers. You may have tried platforms such as Google’s AdWords tool or Facebook Ads, which let publishers target audiences searching online or browsing their social media feeds. But there’s a relatively new player in town—Amazon Marketing Services (AMS)—and it deserves a close look from independent publishers. My company, i30 Media, has been using the service for a few months to place advertisements on Amazon and has realized a respectable sales boost for a relatively small investment.

i30 Media publishes a series of how-to guides under the “In 30 Minutes™” brand. Our tagline is “Quick guides for a complex world,” and we target readers who want a quick and easy way to understand computer software, genealogy, personal finance, and other mildly complex topics. Recent titles include: LinkedIn in 30 Minutes by Angela Rose and Genealogy Basics in 30 Minutes by Shannon Combs-Bennett.

Many readers find out about our In 30 Minutes guides through organic keyword searches on Google and Amazon. We have optimized our websites for Google searches; on Amazon and other retail websites, we make sure product descriptions and metadata can help attract readers who are searching for books about the topics we cover.

However, i30 Media is not the only publisher with books explaining LinkedIn or genealogy. On Amazon, many of our titles compete with dozens—even hundreds—of other books. Good covers, strong marketing copy, and positive reviews can only go so far. When I realized it was possible to start leveraging Amazon’s self-serve advertising platform, I decided to launch a few experiments to see if it could help our In 30 Minutes”guides stand out. So far, I have had good results for our utility nonfiction titles.

Amazon Marketing Services (ams.amazon.com) offers three types of ads:

  1. Headline search: People searching for specific terms will see your ad above Amazon search results.
  2. Sponsored products: People browsing products after a keyword search will see your book in a rotating “sponsored products” carousel and other locations.
  3. Product display: Your ad appears on specific product pages or pages associated with specific interests designated by you.

A single ad takes a few minutes to set up. After registering at ams.amazon.com, click to create one of the ad types described above. For instance, I built a headline search ad that directs people to different Amazon product pages for LinkedIn in 30 Minutes. I uploaded a licensed piece of stock photography, entered some text (“Make a rock solid profile and boost your job search”), bid on 41 keywords, and set a daily budget of $5. Amazon approved the ad, and, that day, shoppers started to see the ad when they searched for one of the 41 keywords.

If I did not have that ad running, someone searching for “LinkedIn book” would only see LinkedIn in 30 Minutes by scrolling down the page of results, where it currently ranks at No. 13 organically. However, with the headline search ad, it now appears prominently above the other 12 titles.

While this ad has generated nearly 20,000 impressions, only a few hundred people have clicked or tapped the ad to learn more about LinkedIn in 30 Minutes. Every time someone clicks on the ad, Amazon charges i30 Media a small amount of money—about 10 cents per click. Whoever clicks on the ad gets taken to the Amazon product pages for the paperback and Kindle editions of the book; most don’t do anything, but a small percentage end up buying the book.

At first, I was skeptical the ads would work. In past years, I experimented with Google AdWords and Facebook Ads, but the results were disappointing. Despite lots of testing with different keywords, images, and messaging, my Google and Facebook campaigns always cost a lot more than the sales they generated.

It was a different story when it came to Amazon ads. I was pleasantly surprised to see modest sales taking place on Amazon within a few days of starting the campaigns. For a few titles, including Excel Basics in 30 Minutes, Twitter in 30 Minutes, and Genealogy Basics in 30 Minutes, i30 Media realized fantastic returns on investment for the simple headline and sponsored product campaigns.

The AMS dashboard provides various metrics for each campaign in your account, as well as each keyword. Data includes impressions, clicks, click-through rate (the ratio of clicks-to-impressions), average cost per click, amount spent, and total sales of the books being advertised. The figure I paid the most attention to was the average cost of sales (ACoS); this is the ratio of ad spend-to-sales. For the LinkedIn headline search ad, my ACoS is $26 (the amount spent on ad clicks thus far) divided by the total sales ($221), or about 12 percent. That’s not bad, but it’s important to remember that the sales figure reflects Amazon’s sales, as opposed to my net revenue after Amazon and middlemen take their cuts. In this case, the true ratio of ad spend-to-i30 Media’s net revenue may be closer to 25 percent, but it’s still a profitable campaign.

The bid for a particular keyword reflects the maximum price a vendor is willing to pay for a single click on the associated ad. However, the average cost per click may be much lower if there is not much competition. Not surprisingly, Amazon regards the ad program as a potential profit center, so it encourages vendors to make higher bids on keywords, set larger daily budgets, and create campaigns with no end date.

Not all keywords are created equal. Some keywords may be bid on by other publishers or even vendors selling non-book products, which may drive up my average cost per click. Other keywords may get a lot of clicks that don’t result in sales.

Based on high ACoS rates, I may pause bids on certain keywords. I may also want to pause on keywords that are generating only a few impressions or clicks (you can use competing titles or authors as keywords, but I have found the results to be underwhelming). On the other hand, considering the impressions cost nothing and the clicks are relatively cheap, I may keep those keywords active and see how they perform over time.

For upcoming titles such as Microsoft Word in 30 Minutes and Crowdfunding in 30 Minutes, Amazon ads will be an important part of our launch marketing. However, I am keeping a close eye on cost per click rates, as they will surely go up as more publishers see the opportunity in Amazon ads. This is what happened with Google AdWords campaigns, which offered inexpensive keyword bids in the early days but became far more expensive over time as marketers piled into AdWords.

If you do decide to experiment with Amazon ads, start with a small daily budget and low keyword bids, and try different visual and text combinations. Evaluate the response rates over a period of two or three weeks, and adjust keywords and bids as necessary. If something works for one book, try a similar campaign for another title. However, if you are not having success for a particular campaign, it’s okay to retire it and move on. Further, even if the ads boost your visibility and top-line revenue, be sure to keep an eye on the ACoS ratio and remember that it reflects total sales at Amazon, not the revenue you will collect after Amazon and others take their respective cuts.

Ian Lamont is the founder of i30 Media Corp., publisher of In 30 Minutes guides (in30minutes.com). He is also the author of an upcoming guide to the Lean Media framework (leanmedia.org). Follow him on Twitter at @ilamont.

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