Pay per click advertising
One of the main elements that differentiates Amazon Advertising from other advertising platforms popular among authors is that Amazon is a pay per click advertising platform. Crucially, this means that authors advertising their books on Amazon are only charged when readers click on their ads.
This is in stark contrast to Facebook or BookBub CPM ads, which operate on a cost per thousand impressions—or Cost per Mille (CPM)—basis, and therefore charge authors for displaying their ads in the first place, no matter whether people then click on them or not.
In the unlikely event that your ad was shown by Amazon a million times without anyone ever clicking on it, all that brand exposure would be for free. Now, that wouldn’t necessarily be good news for you (we’ll explore why in this book), but it serves to exemplify the fact that Amazon Advertising offers a certain margin for error.
If your cover isn’t right, if you’re not targeting the right audience, if you’re using ineffective advertising copy—or for any other reason that can lead to readers not clicking on your ad—you won’t be monetarily penalized for it, because Amazon Advertising doesn’t charge for impressions, it only charges for clicks.
On the other hand, this makes Amazon Advertising directly, financially liable for the relevancy of the ads served to readers. If they choose to serve irrelevant or ineffective ads, that readers don’t click on, Amazon won’t make any money. This is the main reason why many authors struggle so much to get their ads to serve in the first place—and to scale afterward. More often than not, it’s just as hard to get Amazon Advertising to spend your money as it is to get a positive return on your investment in the platform.
First, there’s a lot of competition (I’ll get to that in the next chapter), but even more importantly, Amazon is quick to hamper the deliverability of campaigns that don’t perform well. And what does performing well mean in Amazon Advertising terms? One thing: attracting clicks.
If we go back to our extreme example about getting a million impressions on your ad with no clicks, this is effectively impossible, because Amazon would stop showing your ad much sooner than that (probably after a few thousand impressions and no clicks).
Amazon has zero interest in showing ads that readers don’t click on: not only is this a missed revenue opportunity for Amazon (they could have shown an ad that got a click instead), it also makes for a terrible user experience on the reader side. Imagine browsing Amazon as a reader and only seeing ads for books that you’re not interested in.
Paradoxically, the fact you don’t pay for impressions on Amazon means that you need to watch your click-through-rate (the ratio from impressions to clicks, hereafter abbreviated CTR) all the more closely. Otherwise, you might not lose a lot of money, but you won’t be able to get Amazon to serve your ads, so you’ll be wasting your time looking at a dashboard that barely changes from one week to the next.
Multiple factors can impact the click-through-rate of your campaigns, and they can generally be separated into two categories:
Targeting-related factors: the keywords or products you use for targeting, your bids, and your placement optimization, for example. If you target the wrong people, or bid too low for your ads to show up on prominent placements, your CTR will naturally suffer.
Ad-related factors: basically, every single element that is displayed on your ad.
I’ve found that authors often obsess over the targeting-related factors, tweaking their bids, pausing targets with a low CTR, and so on. And for good reason: that is an important part of the campaign optimization process, to which the whole Part III of this book is dedicated.
What authors often overlook, however, is that the ad-related factors are just as important, if not more. So let’s take a look at them, by order of importance.
The cover: This is by far the most important element of your Amazon ad. It needs to not only grab the eye of the reader, pique their curiosity, but also instantly show them that this book is exactly what they are after. I will not go over the importance of having your cover designed by a professional cover artist with experience in your genre—I stressed this enough already in my first book. I will say this, though: any money you pour into Amazon Advertising with a nonprofessional cover will be forever wasted.
The title: This is the first thing readers will read if your cover grabs their eye. It needs to either intrigue them, amuse them, or give more information about the genre or topic of the book. Remember the old “show don’t tell” adage? Well, while your cover serves to show your readers what your book is about, your title can be used to flat out tell them (especially in nonfiction, case in point in the example above).
The reviews: This is the only element of social validation on your ad. Generally, the star rating will always be between 4 and 5, so what will really matter to readers here is the number of ratings. The higher it is, the more successful your book will be perceived, and the more likely readers will be to take a chance on it.
The price: The price can be just as important a factor as the other elements, especially if it’s significantly different from other books in your niche. Since Amazon Advertising reaches readers who are actively looking for their next book, it can tolerate higher price points than Facebook or BookBub ads. That said, do keep in mind that most readers you’ll reach with your ads will not be familiar with you and your books. Therefore, lower price points will always draw more clicks (and ultimately sales).
The ad copy: As I discuss later in the book, not all ads feature ad copy. When they do, that copy is minimal (compared to the book title) and, as such, often ignored by readers. It can, however, certainly play a role for those who do read it.
It is absolutely vital—and I cannot overstate this—that you nail all these elements to the best of your ability, before you start advertising on Amazon (or anywhere else, really). Often, a change in cover, or in a series title, can have a much bigger impact on your CTR and overall campaign performance than any targeting or bidding change you could make.
Not managing to get Amazon to spend your money is a common issue, but there’s an even worse scenario with a pay per click advertising platform: getting a lot of clicks but no sales. In this scenario, you’re not just failing to make money, you’re actively losing it.
Which brings us to the second ratio, which needs to be closely monitored: the ratio from clicks to orders, or conversion rate. The fewer clicks you need in order to generate one sale of your book, the more cost-effective your advertising will be on Amazon.
While your targeting decisions will affect the conversion rate to some extent, the most important conversion factors here have to do with your product page. When a reader clicks on your ad, they are taken to the book’s product page—and will therefore make their purchasing decision based on the information on that page.
Ranking the elements of the product page based on their potential impact on the conversion rate isn’t easy, as some of these were already present on the ad (such as the cover, the title, or the price). The most important element, though, is unequivocal:
The book (product) description: Amazon Ads display precious little written information about the book (the title, and sometimes, the ad copy). So the first thing a reader will do after clicking on the ad will be to read the book description. You’ll find entire books out there on the art of writing an effective book description, or book blurb, so I won’t go too far into the subject here. Instead, I’m recommending two of my favorite books on the topic in the footnotes,4 and leaving you with one simple piece of advice: check out and carefully study the descriptions of all the best-selling books in your genre. Try to identify some common elements or tropes (maybe they’re all written in first person or they hit the same keywords or they use a similar formatting), and take inspiration from the competition for your own description.
The customer reviews: While the ad features the star rating and number of reviews, readers will likely want to actually read some customer reviews from previous buyers. Here, it’s important to pay attention to the top reviews specifically, as these are the first ones readers will see when they scroll down to the reviews section. Having a huge number of reviews with a solid average rating is ideal—but if your top three reviews are all negative, that alone can detract most readers from buying the book. Sadly, what I’m describing is not an uncommon scenario—and it’s a particularly nefarious one, as it’s hard to revert (short of asking your reader base to upvote the positive reviews, there’s little you can do about a troll review showing up at the top of your reviews).
The editorial reviews: If you click on the star rating next to a book, you’re taken straight to the bottom of the description page, where the customer reviews are featured. However, most readers will rather scroll down to get there, and by doing so, they’ll come across the Editorial reviews section. If they see accolades there from trusted publications, review sites (For example from Reedsy Discovery), or well-known authors, this might just give the potential buyer the extra push they need to hop over the fence and buy the book.
The Look Inside: This feature allows readers to “look inside” and read the first few pages of a book—usually up to 10 percent of its total content. If your first chapter doesn’t grab them, they’re likely to stop reading the sample, and definitely won’t purchase the book. Inversely, if you manage to hook them and get them to finish the sample, their only way to know what happens next is to buy the book.
The book cover: Feeling like déjà vu? Don’t worry, this is not a mistake: the cover can play an important role both for the click-through-rate and the conversion rate. You may wonder, “But if readers have seen the cover on the ad already, and they clicked on it, surely the cover won’t make a difference in their purchasing decision once on the page?” That is some sound rhetorical reasoning right there, but here’s the trick: cover images on Sponsored Product ads are relatively small (thumbnail size). On the product page, however, they’re almost three times bigger! And they can be further expanded by clicking on the image, or using the Look Inside feature. So you can bet readers will take a longer, more precise look at the cover once on the product page—and any details they may see there can sway their decision for better or worse.
The price: The same thing goes here. While book prices are generally featured on Sponsored Product ads, readers will not always look at them before clicking. They will, however, definitely look at the price before buying. And they will probably compare the prices of the different formats you have available, which brings me to—
Multiple format availability: Many readers swear by print, others by Kindle, and many others have now flocked to audio. One of the best ways to maximize your changes that readers will actually buy something once they’re on your product page is to make sure that their preferred format—be it Kindle edition, paperback, hardback, or audio—is available.
As a rule of thumb, if you’re noticing that fewer than one out of twenty clicks convert to an order, you should take a hard look at each of these elements, because it’s likely that one of them (at least) is hurting you.
In other words, your minimum conversion rate objective should be 0.05%. Anything lower than that is probably the symptom of a deeper problem with your product page, which you’ll want to fix before you continue advertising.
Of course, you should take this rule of thumb objective with a pinch of salt, as normal conversion rates will vary greatly from one genre to another. Niche nonfiction typically sees higher conversion than broad, commercial fiction. The availability of your books in Kindle Unlimited can also affect the conversion to Orders. And finally, price can play a huge role.
For example, my current Amazon Ads promoting the free How to Market a Book: Overperform in a Crowded Market convert at 30 percent—but that’s not unusual for a free book. In contrast, a full-price (think $3.99 or more), first-in-series romantic comedy will do very well to even beat the 5 percent conversion objective, no matter how optimized the product page may be. If you have a trusted group or network of author friends in your genre, it can be a smart idea to share your Amazon Advertising conversion rates from time to time and see how yours compare.
Once you get neck-deep into setting up your first campaigns, optimizing targets, and tweaking bids, it’s easy to forget about these two vital ratios. So make a mental note to regularly check both the click-through-rate and conversion rate of your campaigns.
At the end of the day, Amazon might (and certainly will) change its advertising platform over time, but it probably won’t move away from pay per click advertising. They might introduce other bidding optimization strategies, but, ultimately, you’ll always be paying for each click, with all the implications that this carries.