How to Analyze Ebook Advertising on Amazon

Ebook advertising on Amazon requires ongoing attention and analysis to achieve the best possible results.

It also requires a learning curve for anyone who wants to improve performance. Even so, the results of an Amazon advertising campaign will vary somewhat from month to month.

An easy starting point is the campaign graphic available in the Amazon advertising account like the one below.

The date range button located elsewhere on the screen is an important tool for writers and publishers who want to analyze results over specific time periods. Longer time periods provide smoother and more insightful information.

For example, the graphic below is set for a full month, which is a useful range for understanding results.

ACOS Matters Most of All

The most important number is not the amount of spending, the amount of revenue or the amount of impressions. It is the Average Cost of Sales (ACOS), which is a percentage of spending divided by total sales.

One major site that tracks Amazon advertising for all products and services and not just ebooks says the average for all of the accounts it tracks is about 30 percent. The ebook example above for one month is 42 percent. But even a 60 percent ACOS is good for some important reasons.

What’s important to note is the break-even point. Amazon takes 30 percent of all sales off the purchase price. That means the writer gets 70 percent of that price.

So the break-even point for ACOS is 70 percent. In other words, if the ACOS is above 70 percent, the writer will lose money. If it’s below 70 percent, the writer will profit.

A one-month campaign with an ACOS of 42 percent therefore has a profit to the writer of 28 percent of the total sales. Keep in mind that traditional publishing houses often offer writers about 10 percent of the book price. So anything above that number is a win by comparison.

How to Make Even More Money

But the analysis doesn’t end there. Anyone searching on Amazon for a Kindle book may click on the ad without buying the book. They may eventually return and buy the book without clicking on the ad again. The purchase may not register as a sale as a result of advertising.

A book in the Kindle Unlimited program and the Kindle Owners’ Lending Library, which are part of a subscription-based service, will generate revenue but not a “sale” from an ad click. Any Amazon customer who subscribes to the program can read as many books and book pages they want for a fee every month.

So any profit in an Amazon ebook advertising campaign has the potential to deliver more revenue than just what the ACOS indicates.

Still, many writers have posted online that they don’t make any sales at all from advertising. So the results depend on the book and the subject category.

It pays to tread carefully with an ad campaign for ebooks. Start small, learn what works and what doesn’t, and evolve from there.