#003: Three Lessons From $100,000 Spent On Amazon Ads

Read Time: 4 minutes

Hey,

Amazon Ads are exciting because their potential is huge.

And today, I have three of the biggest lessons I've learned from spending over $100,000 on Amazon Ads across multiple different genres.

But, there are unfortunately a LOT of pitfalls that can leave you feeling frustrated, confused, overwhelmed, or in the red financially.

Lessons are there to help us learn, evolve and thrive. Some lessons though, are unnecessary and avoidable, and the 3 lessons I have for you today are exactly that.

The past is where you learned the lesson. The future is where you apply the lesson

I get it... Amazon Ads are difficult and sometimes, you'd rather:

- Turn them all of off and never look at them again
- Launch more and more campaigns, targeting more and more keywords
- Pump more money into them in the hopes that they will start working "one day"

But with the right approach, you can avoid all of this and finally start seeing results from your Amazon Ads within the next 30 days.

If you want to learn my full approach and strategy for Amazon Ads, I lay it all out for you inside Jumpstart Amazon Ads For Authors.

Let's dive into the 3 lessons (plus a BONUS lesson, that is possibly the most important lesson of all) I've learned the hard way...

Lesson #1: Let New Campaigns Run For 7-14 Days (untouched)

I know first hand how tempting it can be to "optimize" your Amazon Ads when you see a poor performing Campaign.

Resist the temptation!

The Amazon Algorithm takes time to understand what your book is all about and how relevant it is to the Keywords or ASINs you are targeting. 

Yes, there are things you can do with your Campaign setup to speed things along, such as using higher bids, or a Fixed Bids bidding strategy.

But using these strategies all depends on how comfortable you are with aggressive advertising, because they will spend money quickly and may result in little to no results.

Over time though, Campaigns mature as Amazon learns more about your books, your readers and your Ads; Amazon Ads are like a fine wine or a good cheese; they get better with age!

If you're tinkering with your Ads every day (e.g. changing bids, adjusting budgets, adding new keywords, etc.), particularly in the first 7-14 days of a new Campaign, you're going to:

#1: Be basing your decisions on incomplete data
#2: Not give the Algorithm enough time and space to optimize the Campaign for you

If you're not seeing impressions within the first 7 days, yes, something is off (I'd start by looking at your bids and raising them, if necessary).

Or, perhaps you're getting the impressions and clicks, but not seeing the sales (this is highly likely something to do with your book product page itself). 

Action Step:

For the most part though, I recommend that you leave any new Campaigns to run for 7-14 days, untouched, to begin with.

After those initial 2 weeks, then plan on optimizing your Campaigns once per week.

Lesson #2: Use 10-15 Keywords/ASINs per Campaign

A few years back, using the full 1,000 quota of Keywords/ASINs in a single Campaign was commonplace.

In 2019, however, Amazon changed their algorithm to put a much larger emphasis onrelevance.

This meant that the spaghetti on the wall approach was no longer an effective strategy when it came to targeting.

If you've been running Amazon Ads for some time now, you may have witnessed this yourself.

Look at any of your existing Campaigns that contain hundreds of keywords, you'll see that maybe 10-20% of those Keywords will actually have any statistically significant data on them. 

The rest of the keywords may have a few impressions and a handful of clicks, but nothing you can take action on.

Amazon's Algorithm will soon figure out which keywords it's going to focus your budget on within a Campaign and essentially ignore the rest of them.

Amazon wants to make sales (they're a business at the end of the day too) and if there are keywords you're targeting that just aren't going to convert into sales, Amazon isn't going to be too inclined to show your Ads for those keywords.

An Example...

If you have 500 Keywords in a Campaign, a $10 per day budget and you want to collect data on every one of those keywords, in a perfect world, that would take months, if not years!

But seeing as we're not in a perfect world, you may get clicks on 50-100 of those 500 Keywords - if you're lucky.

Ideally, you need at least 10 clicks on a keyword before deciding whether it has the potential to be a winner or not.

Let's say an average Cost Per Click (CPC) is $0.50, you need to spend $5 on every Keyword to figure out if it's going to be a winner.

So, for those 500 Keywords, you would need to spend $2,500 ($5 x 500 Keywords). That's a lot of money to figure out what is going to work! And at $10 per day, that's 250 days – almost a year!

Action Step:

Instead, what I recommend you do is test 10-15 Keywords per Campaign.

And make sure every single one of those Keywords is relevant to your advertised book.

With this approach, you'll save a lot of time, a lot of money and figure out what works within a matter of days, or at most, weeks, rather than months.

Lesson #3: Don't Start Running Amazon Ads Too Soon

Amazon Ads, like many other advertising platforms, can appear to be a magic bullet, a shiny object that can turn your books from unheard of into bestsellers overnight. 

In reality, to get the most out of Amazon Ads, you need

- A good book
- A solid sales history
- Strong reviews
- Sales Pages that converts.

Ideally, I recommend you have at least 20 reviews on your book before you start to advertise it with Amazon Ads.

Amazon themselves recommends at least 15 reviews before starting to run Ads, but I find that 20 or more reviews perform better as it's just additional social proof that will help with the conversion of your Ads.

And the more reviews/ratings you collect, the better your books will convert!

Amazon Ads also rely heavily on sales history when deciding whether to show your Ads in the first place and where to show them (i.e. how much exposure they're willing to give you), but also, how much you'll be paying for every click on your Ads.

If your book is ranked at over 100,000 in the Kindle Store, I recommend you get some initial traction with sales by using other RELEVANT marketing or advertising channels (aside from Amazon Ads) such as Facebook Ads, Newsletter Swaps, Promo Sites, etc, as these sources don't look at Sales History; they just send lots of traffic to your books!

Action Step

- Look at your Amazon Bestseller Rank (ABR) on the book you'd like to advertise
- If ABR is above 100,000, start with another platform aside from Amazon Ads (I recommend Facebook Ads)
- If you have less than 20 reviews/ratings on your book, work on collecting more of them before starting Amazon Ads

Amazon are going to be much more inclined to show a relevant Ad to readers if it has a proven history of converting into sales/borrows compared to a book that has little to no sales history.

So, once you've built up some good sales history, then you're ready to start Amazon Ads.

BONUS LESSON: Always Look At The Big Picture

Saving the best (or biggest) lesson till last... 

Big Picture Thinking.

In the beginning, when I saw that we'd spent more on Ads than we had earned in Sales (this was before KENP Royalties were reported in the Amazon Ads Dashboard), I used to think this was a bad thing. 

I was also a little "obsessed" with bringing my ACOS down as low as possible.

Both of these ways of thinking limited the potential of our Amazon Ads, because they failed to look at The Big Picture.

Today, I rarely look at ACOS at all. And if there are days where we spend more on Ads than we make in Sales and KENP Royalties, it doesn't matter.

Why, you ask...

It's because I'm much more interested in the impact every Sale and Borrow has on the organic side of things (i.e. the visibility, Sales and Borrows that come from pushing the books into a better Amazon Bestseller Rank). 

Organic is where the magic happens. It's where all your hard work pays off as Amazon sells your books for you with enhanced visibility.

From a financial perspective, all I'm doing is comparing our Amazon Ads Spend (as well as our Facebook Ads Spend and any other marketing costs), with our Total Royalties. 

This is what really matters financially.

Your profit...

Royalties minus Expenses = Profit

An Example...

If you spent $50 on Amazon Ads, $50 on Facebook Ads, but made $200 in Royalties (despite your Amazon Ads Dashboard telling you that you only made $25 in Sales), by looking at The Big Picture, you'll see you actually made a $100 profit that day.

This is why I ALWAYS look at The Big Picture and never look at Amazon Ads in isolation.

TL;DR (Too Long; Didn't Read) 

1. Let your Ads run for 7-14 days untouched
2. Use 10-15 Keywords/ASINs per Campaign
3. Don't start running Amazon Ads too soon
BONUS: Always Look At The Big Picture

That's it for this week; thanks for reading. See you next Saturday. 

To Your Success
– Matt