This is all about helping you understand how the program works and whether it would be helpful for you as an author. I'm taking up to $200 to run two campaigns and being totally transparent about it to help you make a better decision about whether to use it. After all, we authors gotta stick together.
More than that, this blog's also going to explain some of the basics about digital marketing so you can better understand the pros and cons of advertising with KDP Select.
If you find this useful, make sure to share with your author friends!
Eligibility: KDP Select
(And while selling exclusively in one outlet might not make sense for some authors, one plus to this is by pushing sales only through that site, you can potentially increase the number of buyers and the speed at which they're buying, which helps to increase your visibility in the Amazon search engine.)
Being in KDP Select also means you can make your book available to Prime members to borrow for free, and for Kindle Unlimited to read. And you actually get PAID for the number of borrows or time spent reading your book from these programs. In fact, depending on the price of your Kindle book, you can potentially earn more per borrow than you do from a sale of your book!
KDP Select also lets you run promotions. You can give your book away for free for up to 5 days each 90 days, and you can do countdown promotions where you lower the price of your book and it slowly climbs back to its original price over a time period you select. You can see here what it looks like setting it up:
Tracking Amazon Sales
Now any time you do paid advertising, it's a really good idea to TRACK your costs and sales to make sure it's sustainable and profitable. This is done with some sort of analytics (Google Analytics is probably the best known, and it's free; but there are others.)
When you're selling a product on your own site and you have control of the conversion page, or "thank you for your purchase" page, you're able to add a tracking pixel to that page. I won't go into all the ways that can be used, but it can help you tracks sales and revenue. Used correctly, it can also tell you what led to that sale (a blog, an ad, etc.). So you can focus on things that are profitable and pause or change things that are not. Make sense?
The challenge in tracking comes when you don't have control of that conversion page. And when you're selling your Kindle book on Amazon, you don't control that page. So whether you're promoting your book for free using social media or blogging or whatever, or you're paying for ads on Facebook, Google, Bing, etc., you can only track the number of clicks you're getting from each, and your cost of getting those clicks. And you can track from Amazon how much you're making in total. But you can't tell what places are driving those sales.
YES ... you can try just one method at a time and see if that works before moving to the next. But this will slow you down and ultimately will never accurately track changes in the effectiveness of any one effort.
So as far as I can tell, in most situations, the best you can do is to watch your spend vs. your revenue and make sure you're earning more than you're spending. (Maybe early on, as you're building momentum, you're willing to spend more than you're earning, but that's obviously not sustainable.)
With KDP Select advertising, however, the tracking is done for you. Since it's all built into Amazon, who DOES have control over the sales page, they can tell you how much you're spending, how many clicks you're getting, and how many sales you've made. So that is a big advantage to advertising with KDP Select.
What is PPC Advertising?
And for now, it appears that 2 cents per click is the MINIMUM you can bid for clicks on KDP Select.
Getting your ad to appear, however, means competing with other people for the same ad spot, and that's why this is done on an auction basis. So the more you bid, the more often your ad will appear. Of course it won't get clicked every time it appears. You might need it to show up 50 times before it's clicked once. And if it takes 100 clicks on average to make a sale, you need 5000 ad impressions before you make a sale. That's a LOT of impressions, and it's tempting to raise your bid to get impressions more quickly. But once you find out what SUSTAINABLE advertising is to you -- something that keeps you profitable -- you can't just raise bids to make sales happen more quickly without risking a financial loss.
KDP Select charges you one cent more than the SECOND bidder. If you bid 10 cents to get a click, but the next eligible person only bid 5 cents, you would win the bid and get charged 6 cents -- one penny more than the next bidder. So keep in mind that your maximum bid is NOT necessarily the amount you'll spend on a click.
$100 Ad Budget and Charging
1) You're NOT charged $100 up front. You are charged in smaller increments along the way, only after you've gotten clicks and owe Amazon the money.
2) It is possible you won't use the entire $100 during the campaign. If you've set the campaign to run for one month and only get $1 in clicks per day, then you'll only spend around $30.
3) You can Pause or Terminate the campaign at any time. So you don't have to fear the $100 budget that you've set. Just keep an eye on your results (explained below) and stop the campaign if you need to.
Setting Up Your KDP Select Ad Campaign
First you log in to KDP Select and find the book you want to promote on your Bookshelf. Click on "Promote and advertise":
Next you'll see several of your promotional opportunities with KDP Select. In this case, click on "Create an ad campaign" and select the title you're promoting:
Your next choice is a pretty big deal -- it involves how you want to target people. You can either target them by broad interest OR you can target them by specific products. If you know that your book is similar to another book and believe its readers would buy your book, then you can choose that book and Amazon will only advertise to people looking at that. It's a way to refine your audience and SHOULD yield you a better conversion rate ... but less traffic. So you need to decide what is best for you.
For my test, I initially set up a campaign targeted to people who are interested in science fiction. For the screen shots here, I've set up a second campaign to target people who are interested in The Hitchhiker's Guide to the Galaxy, since it's similar to my book in the sense that it's a science fiction adventure full of humor and political commentary. Then I'll review with you how both campaigns proceeded.
Now notice that I've set my bids at a whopping $1. Also notice that Amazon has shown an average bid of 61 to 74 cents. So to get a lot of impressions for testing purposes, I'm setting my bid at $1. I will talk more about this in another section of this post.
Another thing to consider is whether you want Amazon delivering your ads evenly over time or as quickly as possible. This is important because you can't change it later. So since I chose even delivery in my last campaign (which was a broad match campaign -- people interested in science fiction), I will choose "as quickly as possible" for this campaign since it's extremely targeted and there's less opportunity for traffic. I can always adjust my bid later.
The final step in all this is writing your ad headline. The rest of the ad is based on your Amazon listing, so you don't control that here. I've written mine to touch on some of the books keywords and hopefully to appeal to Douglas Adams fans. We'll see.
Once you submit, it can take up to 72 hours for Amazon to review and approve the ad.
Bidding on KDP Select Ads
First, the "right" bid for you will not only depend on your budget but also on the audience you're after. If you target certain books, maybe you'll get away with low bids. If you cannot bid low enough to make a profit, then KDP Select ads may not be a good idea for you.
In my case, I am TESTING to share some results with you, and that means I need impressions and clicks to see whether I get any conversions. Since my book is only $2.99 on Kindle, I make a profit of $2 per book sold, so even if I get a 4% conversion on clicks (which would be a great conversion rate), I would need to spend only 4 cents per click in order to make a sale for $1 and earn $1 in profit.
You can see why selling a book at 99 cents -- when you only make 35 cents profit per sale -- makes it very hard to invest in advertising!
Ok, so I'm being clear that it's not likely I'll make a profit, but I need impressions, and when I set my first campaign at 50 cents per click, I only got ONE IMPRESSION in two days, and no clicks. After seeing that, I raised the bid to 70 cents per click and this is what I'm seeing so far:
Editing Your Campaigns
Sales Results from KDP Select Advertising
Again, if you think this is useful and you have friends who should learn from this, make sure to share! :)
June 6 KDP Select Ads Update
As you an see, I've had 374 impressions but NO CLICKS from my first campaign. Despite the bad job I did in naming the campaign, this is where I've bid very broadly on those interested in science fiction in general. Despite the broad audience, I'm only bidding 70 cents per click vs. $1 for my Douglas Adams campaign. And remember that I'm letting Amazon spread out my impressions / clicks over time, where I've asked them to speed up my exposure with Adams.
Given the low CTR, I would choose the faster exposure option in any future campaign unless I see things change.
The Adams campaign has had over 3000 impressions but only 4 clicks. Normally you would hope for a minimum .5% to 1% CTR, but I'm not getting much better than .1%. Still, I would also only expect 1-4 sales out of every hundred clicks, and it looks like I've gotten one from just 4 clicks.
Amazon authors will know that I'm only getting $2 from that $2.99, so I'm losing money as I thought I would. But again, this is being done for testing and hopefully to get some more readers who will review my book on Amazon (potentially driving up free traffic in time). But it would be fascinating if the conversion rate continued anywhere close to this!
To continue with this test, I am now bumping up my bid to $1 on the BROAD campaign to see if I can get more results to share with you. When the campaigns come to a close, I will share my final results.
June 13 Update: Campaign Stopped for Lack of Relevance
You'll also see that I spent $21.56 on those clicks -- a spend I never would have made on a long-term basis, but this was for testing and sharing results. Not one transaction must also suggest low relevance to Amazon.
The other campaign is still at about a 1 in 1000 impression click rate and still has made just one sale. So again, long-term I wouldn't want to spend $5.17 to make one sale unless my book were yielding more money per sale. And again, this is just for testing and sharing.
The sense I'm getting for now is that, bidding profitably on KDP Select ads means bidding so low you'll get almost no impressions and therefore almost no sales. In order to get enough impressions to yield regular sales, I might have to choose hundreds of science fiction titles that I felt were related to my book, stick with the Kindle editions, and then bid just enough to be seen now and then.