Meeks Explains Amazon Ads (2)

Meeks Mastering Amazon AdsBrian D. Meeks.[1] 2017. Mastering Amazon Ads: An Author’s Guide. CreateSpace.

Review by Stephen W. Hiemstra

In April I began advertising with Amazon Ads, sometimes called AMS ads. In the summer, I cut my bids about in half and started showing a small profit on the ads at the cost of reducing my sales volume. Over the last six months, I have gone from selling most of my books in person to selling more online and my Kindle sales have exceeded paperback sales. If sales continue at current rates, I will exceed the benchmark of having sold more than one thousand Christian, non-fiction books.[2]

Against this backdrop, when I learned that Joanna Penn was hosting a podcast[1] with Brian Meeks, a former business analyst, on AMS Ads, I was all ears. When I learned that Brian also had a book on the subject, I immediately ordered a copy.

Introduction

Brian Meeks begins his book, Mastering Amazon Ads, with these objectives:

“Later in this book I’m going to cover many aspects of marketing: how to improve your ad’s performance, return on investment (ROI), some of the misconceptions about Amazon ads, and dozens of other pieces to the puzzle.” [SIC].(7)

AMS offers two kinds of ads: sponsored product (SP or keyword) and product display (PD or interest) ads (16). Because SP ads run almost immediately and PD ads take a day or two to kick in, many people write off PD ads as not profitable (8).

Brian advocates PD ads because they are easy to set up and serve a different market—PD run on Kindle, while SP ads do not (8). Because the ads serve different markets, they do not compete with one another which implies that authors should run both kinds of ads to maximize their sales. Consequently, I began testing PD ads even before I finished reading the book.

Metrics

Before writing full-time, Brian worked as a business analyst and he advocates testing the assumptions that go into creating AMS ads. But how do you know that your ads perform as well as they might? Brian says test and measure performance among the alternatives.

Brian advocates measuring ad performance by taking daily snap shots of ad statistics provided by AMS. Key performance indicators are:

Click Through Rate (CTR).

How many impressions (views of the ad) are required to get a click?

Brian likes PD ads because the CTR is lower (fewer impressions are required to get a click) and conversion rate is lower (fewer clicks are required to get a sale) (19). In my own test comparing my first books’ SP performance with its PD performance, I notice today that the CTR for my SP is 1,298 to 1, but for my PD is it 340 to 1. This implies that my PD ad generates about four times as many clicks as my SP ad. (Brian’s own test showed five times as many clicks). Brian sees the CTR as a measure of ad copy efficiency (21).

Conversion Rate (12-13).

How many clicks are required to get a sale?

The conversion rate from clicks to sales combined with the bid give the cost of a sale. If five clicks are required to get a sale on average and the bid is $0.11 per click, then the ad cost of a sale is 5 *$0.11 or $0.55.

Return on Investment (ROI).

Are the ads profitable?

According to Brian (13), the ROI for ads is calculated by subtracting ad costs from ad revenue (price times the royalty rate) and dividing that number by the cost of the ads.

Continuing the above example, if a Kindle sale generates $3.47 ($4.95 * 70%) and costs $0.55, then the ROI on that ad is: 531% ($3.47 – $0.55)/$0.55). If the Kindle sale generates $0.35 ($0.99 * 0.35), then the ROI is: – 36% (($0.35 – $0.55)/$0.55).

Clearly from this example, the bid offer and the book pricing work together to determine whether ads are profitable. If the bid is too high or the book price is too low, then the ads are not profitable. Brian makes both observations repeatedly in his discussion and examples.

Assessment

Brian Meeks’s Mastering Amazon Ads: An Author’s Guide is a helpful book for authors who want to sell books on Amazon.com. Brian’s writing style is accessible and his analytical advice is useful for those not comfortable in working with numbers.

Footnotes

[1] https://www.TheCreativePenn.com/2017/09/04/Mastering-Amazon-Ads-Brian-Meeks.

[1] www.BrianDMeeks.com/non-fiction. @ExtremelyAvg. http://ExtremelyAverage.com.

[2] According to different sources, less than five percent of independent authors sell a thousand books and most sell none at all. For this reason, the thousand book threshold garners attention.

Meeks Explains Amazon Ads

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