Today I have a wonderful post for the guests of the writer Nicholas Erik, an expert marketer with an acute analytical mind, who will show you how to analyze the profitability of your paid ads, so you can sell more books. It is easily the longest post we have had here – over 4,000 words – but it is worthwhile to be content with this excellent and complete guide that will have something useful for all self-publishers, from beginners to experts. Here's Nick with more:
As the title suggests, this guide explains how to analyze the profitability of your paid ads to help you sell more books. The detailed system described is effective both for promotional sites and for pay-per-click (PPC) platforms such as Facebook Ads, Amazon Advertising and BookBub.
If you follow the steps in this guide, you will have reliable numbers on which to base your advertising decisions, rather than speculating on their profitability.
I want to be clear: paid advertising, especially PPC, has a steep learning curve. Developing your skills requires extensive testing and practice. It is likely, at the beginning, that your ads are not profitable.
If your budget is limited, not spend money you do not have. Start small and reinvest continuously a part (or all) of profits in your publishing business. Those without budgets can still apply many of the concepts to increase the effectiveness of their free marketing efforts.
Since loss of money is possible, many authors are reluctant to publicize and consider it risky. Properly done, however, paid advertising is not risky and is instead a reliable profit generator.
In fact, the increased competition (over 7 million books and counting on the Kindle Store) and the greatly reduced organic visibility make it difficult, though not impossible, for the authors to succeed in 2018 without spending money on advertising.
By analyzing your ads successfully you need to calculate three simple metrics: cost per download, sell through, is revenue for download. But before starting with mathematics, it is important to define seven fundamental principles for profitable advertising.
How to use this guide
There is a lot of information here, but if you do it slowly I hope you will find intuitive concepts.
Reading this guide in its entirety before doing your own analysis will be useful. After reading it once, go back and do the calculations step by step. In this way, you will have a full understanding of how each component fits together as you crunch your numbers.
Remember that these numbers are unique to each series, which means you have to calculate them for each series you plan to advertise.
Now on these principles.
Seven basic principles
Following these seven principles is essential for profitable advertising and can save you time and money. As with all the rules, there are exceptions, but if you're starting, you should break them only after careful consideration.
PRINCIPLE 1: Most, if not all, of your profits will come sell through. This means that the longer your series are long, the more money you can generally spend advertising. Advertising of an independent novel is difficult (and rarely profitable outside of a contract featured with BookBub) and is not recommended unless you are a marketing expert.
PRINCIPLE 2: Focus your advertising on the book 1. Even in a series of self-sufficient novels, many new readers will begin with book 1. Advertising later books generally produce smaller returns. Only publish subsequent books if you receive a BookBub Featured Offer or if you have run out of all Book 1 options.
You can also advertise a set of start boxes-e.g. Books 1, 2 and 3. The general principle here is that it is easier to sell new readers at the beginning of the series (otherwise known as your initial funnel).
Advertising only Book 1 has the advantage of making the administrative side much more manageable. Tracking ads for five or ten titles in a series is a nightmare.
As a final note, you should also publicize your latest version of a series, especially during the launch, but it is much more difficult to analyze the data as described below. There are too many variables that distort the launch numbers to make this analysis useful.
Instead, the general purpose of advertising the last book is visibility and general awareness: make sure your fans are aware that it is out, while also drawing some new eyes in the series.
PRINCIPLE 3: When using promotional sites, stick to proven options. You can find my list of recommended sites, updated regularly, here.
PRINCIPLE 4: When you publish PPC ads, start small ($ 5 – $ 10 a day). Make sure your ads are profitable before attempting to scale. If your ads are not profitable at a small expense, a bigger budget will increase your losses.
PRINCIPLE 5: Although extremely useful, these metrics – cost per download, sellthrough, revenue per download, conversion and al-are estimates. Because of the nature of Amazon's reports and simple old variance, it is impossible to predict with absolute certainty that your sellthrough will be precisely 41.4% over the next three weeks, that your book will be converted to 32.5% on Tuesday or a certain promotional website produced exactly 921 downloads.
With this in mind, always factor in a safety margin during advertising.
PRINCIPLE 6: The advertising of most books will not be profitable (outside the BookBub featured offers). This is not a reflection on the quality of the book. Many books simply do not reach the right commercial notes to resonate with a wider audience.
If you find, after executing the numbers, that you have written a book or a series like that, do not worry, but do not force the problem by advertising anyway. Here's how it accumulates huge losses.
There are free marketing alternatives for these titles: mentioning them in your newsletter and autoresponder, including cross promotions, social media, your website and so on.
PRINCIPLE 7: Requires profitable advertising consistent tests. You can and should use the principles, tactics and advertising ideas that have proved beneficial for other authors. But in the end, you have to develop your ads and ideas by finding what works your books.
This is the number one rule of advertising. If you forget everything else, be sure to test.
A keynote on the test: when you adjust the back of your book, the blurb, the cover, the price or other elements that influence the numbers, only one main element changes at a time. If something affects your numbers, you want to know Exactly what was responsible.
This wraps our key principles. It's time to dive into the cost per download.
Cost per download and because it's important
Everyone has a price, as the old proverb says.
Advertisers also have prices. But the price of the adhesive, whether it's $ 20 or $ 400, is not an accurate indicator of the real cost. Sometimes BookBub is incorrectly referred to as the most expensive advertiser in the game. At first glance, this sounds true, but digging into numbers reveals a different story.
This is because it determines the position of an advertiser true the effectiveness requires the calculation of the cost per download (or sale).
The equation for the cost per download is:
The cost of advertising is the price of the promotion.
The # of downloads is the number of downloads or sales of the promotion produced.
The base line is the average number of downloads or sales that your book gets without promotion.
To calculate the baseline, you can:
- Get the average number of downloads in a recent 7-day period without a promotion.
- Look at the number of downloads a few days before the promotion and make it look.
Note that the baseline varies. Closer to release, or a couple of months after a big promotion, your prediction could be 70 downloads a day. For an older backlist title, it could be 5 downloads or even zero.
Let's analyze some real numbers. In this guide, I will use my urban fantasy book Lightning Blade as a case study. Lightning Blade it was a permafree title. However, it is essential to understand that you can use the exact same calculations for securities paid without changes.
Because I mainly advertise on Amazon, I've only included Amazon downloads. For a cleaner comparison, I do not include the "queue" downloads of the days following the promotion. Depending on the situation, you may include downloads from other retailers – Barnes & Noble, iBooks, Kobo, Google Play and others – or the queue.
Whatever you decide, make sure your calculations are consistent. Numbers that include all resellers and the queue are not directly comparable to those that include only one retailer in a single day.
- Cost of advertising: The BookBub promotion costs $ 219.
- No. of downloads: 19,266 downloads of Amazon.
- Basic download: around 300 / day.
Therefore, the cost per download was $ 219 / (19266 – 300) = 1.2 ¢ or $ 0.012.
In comparison, an EReaderIQ promotion produced a download cost of $ 15 / (123 – 23) = 15 ¢ ($ 0.15).
The cost per download does not work only for promotional sites; in fact, it's more critical when using PPC, where you can spend money like water.
Facebook ads produced a download cost of $ 5.08 / (22 – 5) = 29.9 ¢ ($ 0.299).
Among these three advertisers, BookBub was the cheapest and Facebook was the most expensive. Knowing the true cost is essential when assigning the hard-earned advertising dollars. At the end of this guide, you will find a comparison table of the costs for downloading over twenty promotional sites.
The cost per download is much more useful than simply determining the actual cost of the advertising options. With sell through is revenue for download, you can use the cost per download to determine if a specific advertiser will be profitable for your series-before book a single promotion.
Before going into mathematics, however, let's take a short moment to answer a question you might have: can I reduce the cost per download?
Yes, and I'll show you how.
Sidebar: increase your conversion
Suppose you receive 75 downloads for $ 10 (the cost per download is 13.3 ¢).
Not bad. Maybe you're even profitable if your series has a strong sale. But of course you'd rather get 100 downloads at the same price (10 ¢ per download).
This could be possible or not during advertising on promotional sites. The major influences on the number of downloads you receive from these sites are the quality and size of their listings.
When you run PPC ads, however, conversion optimization It has a huge influence on the cost per download.
The conversion rate is calculated as follows:
The number of downloads is the number of downloads or sales received from your book.
The number of clicks on the ads it's the number of people who have clicked on your PPC ads. This tells you the number of visitors received from your Amazon page.
To calculate (and optimize) the conversion, you need to run PPC ads like those offered by Facebook, Amazon or BookBub. Otherwise, there is no way to estimate how many people have visited your Amazon page, as promotional websites do not provide this information.
The more downloads and clicks you get, the more you can be sure your data is accurate. But this can take a long time and be very expensive.
My general rule is to take a period of time with at least 1000 clicks on ads and 300 downloads on a free book. On a paid book, the number of sales you deal with is much smaller. It is usually expensive to get 300 sales, so I would aim for 30 to 100 sales.
These are Lightning Blade & # 39; s numbers from 6/24 to 7/15:
- No. of downloads: 463
- No. of clicks on Facebook ads (eg visitors): 1779
- Conversion rate: 463/1779 = 26%
Once you've got the conversion rate, you can run tests to improve it. The following three elements have the greatest impact on conversion (in order from largest to smallest):
- Price. The lower prices produce a higher conversion; free books have a conversion rate 10 times higher than those paid.
Of these, you will mostly experiment with the price and the blurb, since those are fast (and free) to change. By continually running the tests, you can run the iteration to a better Amazon page. Change only one thing at a time, so you know what is the cause of any changes in the conversion rate.
An important note: the audience to which you target your ads makes a big difference in the conversion. For example, if I publish my urban fantasy book to readers interested in thrillers, my conversion will be atrocious.
Be sure to target only the audiences that will be interested in your book.
Now that you know how to increase the conversion rate of your book (and therefore reduce the cost per download), we can move on to the next piece of the analysis puzzle: sellthrough.
Sell throughAlso known as readthrough-It's the lifeblood of every author's career. In short, we need readers to read more than one of our books. Even if you never plan to spend a dollar on advertising, know that your sellthrough is vital.
Sellthrough is the percentage of readers who, at the end of a book, buy the next book. Let's say that ten people have bought Book 1 and five buy Book 2.
The sellthrough would be 50% solid, but not overwhelming. Bass sellthrough, however, is a glaring problem that needs to be addressed as soon as possible.
Low sell-through is generally the result of three things:
- Your book is free Free books have a significantly lower sale (2% +) than paid ones (40% +). This is not a problem unless your sellthrough is not low for a free book.
- Badly optimized back material. This can be solved.
- People are not finishing the book, or they do not find it convincing enough to pick up the sequel. This can not be reliably fixed on that series.
The three problem often alludes to more profound problems related to craftsmanship, or it could happen that a particular series simply does not resonate with the readers. If your sellthrough is consistently poor on multiple series, however, there are craft problems that need to be addressed.
It is important to understand that while sellthrough is career-resolvable-you can learn techniques like cliffhangers, effective pacing, scenes and sequels, plot structure, and so on to keep readers turning pages series of books level is usually not.
I say this because, in the face of poor publicity, the natural inclination is to rewrite or otherwise revise Book 1. It is not recommended. It is a huge investment of capital and rarely solves any problem preventing readers from finishing the title.
Your best option for a series with low sales is to conclude and start a new series.
With those points out of the way, here is the equation for sellthrough:
Let's analyze some real numbers again Lightning Blade:
- Book No. of downloads 1: 1405
- # of sales of Book 2: 20
- Sales number of Book 3: 11
- Sales number of the complete set of trilogie boxes: 28
In this case, because the reader can buy Book 2 or the complete trilogy after reading book 1, we need to add these sellthrough numbers together to get the total sellthrough.
1.42% + 1.99% = 3.41% sellthrough
This means, of the 1405 readers who downloaded Lightning Blade3.41% of them buy the next book. It is solid
In a few minutes, we will use the number of sellthroughs to be calculated revenue for download. But first, I'll show you how to optimize your back matter to increase your sellthrough.
Optimize your back matter
While reviewing a book to increase its sellthrough is a risky proposition that I not recommending, rear-end optimization is a quick and effective way to counter sell-through.
Most secondary subjects are ineffective because they offer too many choices. The authors tend to overwhelm the readers by launching every link and request imaginable in the back subject.
This causes two problems:
- Each choice is not the same in value. A follow-up on Twitter or Instagram, or even a review on Amazon, has much less value than a sale.
- Having too many choices makes many people default to the simplest choice of all: close the book without taking any
Therefore, we want to simplify our secondary subject to focus on the essential.
This is why I switched from a back topic containing three CTAs (called to action): a review request, a link to the mailing list and a link to the next book (with a short set) – to a single CTA.
A link to the next book (with a brief description).
The old version of three CTAs is on the left. The new CTA version is on the right.
The new one was 1.4 times more effective, with a sale of 4.8% (against 3.4%).
This adjustment takes five minutes: just delete extraneous links and text. However, you've probably heard that reviews and subscribers to the mailing list are valuable and may be reluctant to remove those requests.
A review request has little value now that an automatic Amazon pop-up at the end of each book asks readers to review it.
A subscriber has significant value, but a sale is often worth more. After a reader has completed the mailing list registration process about ten minutes later, their interest in buying Book 2 may have already fallen – or they may simply be distracted by other things.
I prefer to capture the sale right away.
I have a link to the front page mailing list for those readers who are interested in joining. I also include the link to the mailing list at the back of the series' final book: if a reader goes through a whole series, he is likely to be a fan of my work and interested in hearing more from me.
Instead, you can use a version of two CTAs: a link to the next book (with a short file) and a link to the mailing list, if you wish.
Finally, you can enter any additional links (for example, review requests, social media, and others) that do not cut in the Author Information section.
Two best practices that are visible if you really strip the image above:
- Put your CTAs immediately after THE END, on the same page. If you have a page break, an automatic Amazon pop-up that sells books from other authors and asks the reader to review the triggers, essentially ignoring your secondary subject.
- Always include direct links. This can be a problem if you are large, but includes a direct link to the retailer (or your mailing list / review form, if you include those links).
Now that we have optimized the back, we can move on to our last piece of calculation of the number: the calculation revenue for download.
Revenue for download
Remember that sales number we found a few minutes ago? Good. We will need it to calculate revenue for download. This number tells you what the values of each download of the advertised book are (usually Book 1 or the Starter Box series set).
Here's how to calculate revenue for downloads:
Ellipses indicate that if you have multiple books in the series, you need to add them to the calculation.
Here's what it looks like with real numbers: I calculated revenue for both 3.4% and 4.8% sellthrough downloads so you can clearly see the impact.
- Book 1 net fee: $ 0.00 (since it's free)
- Book 2 net rights: Net Sovereignty of Book 2: $ 4.99 * 0.70 = $ 3.49
- Sovereign of Book 3: Net Sovereignty of Book 3: $ 4.99 * 0.70 = $ 3.49
- Net sovereignty of the box$ 9.99 x 0.70 = $ 6.99
- Book 1> 2 sellthrough: 1.42%
- Book 1> 3 sellthrough: 0.78%
- Book 1> Box Sellthrough: 1.99%
- Book 1> 2 sellthrough: 2.54%
- Book 1> 3 sellthrough: 2.15%
- Book 1> Box Sellthrough: 2.3%
With a sale of 3.4%, every download of Book 1 produces revenue of 7.7 ¢ if a reader buys Book 2 or 13.9 ¢ of revenue if they buy the box set. This average is 10.8% of revenue per download.
At 4.8% of sellthrough, these jumps to 16.4 ¢ and 16.1 ¢, respectively, for an average of 16.2 ¢.
Another step if you have a box set
While the average revenue for download numbers from the frame and Book 2 together produce a solid estimate, it is not 100% accurate. This is because not all those who buy Book 2 buy Book 3, which means that this route through the channel does not produce the same revenue as when they buy the box.
The calculation of exact revenue by number of downloads requires a weighted average.
Here, 41.6% of people bought Book 2 (20 sales / 48 sales of Book 2 + Box) and 59.4% of people bought the box.
Therefore, to calculate actual revenue for download, you need to do the following:
(0.416 * 0.077) + (0.594 * 0.139) = $ 0.115 or 11.5 ¢ per download.
The numbers do not change much with the new sellthrough, since the number of units sold is closer to 50-50 (32 of book 2, 29 of the box):
(0.524 * 0.164) + (0.476 * 0.161) = $ 0.162 or 16.2 cents per download
You can skip this step if you do not have a box set.
Or simply average the numbers together for simplicity.
This is done for the analysis part of the guide data. Now that we have our numbers, we can determine which sites and platforms will be profitable for our books.
How to analyze profitability (final phase)
Determining whether an advertiser will be profitable for a particular book is easy.
- Get advertiser cost for download.
- Then compare it with the revenue of your download book.
- If the cost is higher than revenue, that advertiser will not be profitable.
For Lightning Blade, each download is worth 11.5 – 16.2 ¢ (depending on the sellthrough). This makes every site that costs More less than 11.5 cents per risky download; remember from the introduction that these numbers, although incredibly useful, are only estimates. I have a lot of historical data suggesting that I can expect a 3 – 3.5% sales up Lightning Blade. While I think the improvement of the back matter has increased my sellthrough, I do not know if it is actually 4.8%, or something smaller, like 4% or 4.5%.
I know, however, that any advertiser that costs more than € 16.2 of download will not be profitable.
Of course, calculating the cost per download for each individual site is a problem, not to say expensive. It's nice to know what's working, minus the proof and the error.
So I did it for you.
Below you will find more than 20 promotional websites sorted by cost per download. The cost per download varies depending on the genre and conversion rate of your book, but this should provide a solid starting point for your efforts.
These races during the summer / autumn of 2018 (so in the last four months) onwards Lightning Blade. The book had already been published on many sites. If it was the first time, I made a note. I booked the fancy list of each site (or the equivalent).
I've included numbers for some other genres / stacks of promo for comparison, plus Lightning Blade for the 2017 BookBub and a Freebooksy on one of my other urban fantasy books.
PPC platforms like Facebook, BookBub and Amazon Advertising are not included, because cost per click (CPC), and therefore the cost per download, is strongly influenced by your gender and the quality of your ads. When you publish PPC ads, you must use your data to analyze the profitability of your ads.
The Process & Key Takeaways
Since we have covered a lot of ground, and the whole calculation task might seem overly complex, here is the complete process, which also serves as a small checklist:
- Calculate the cost per download.
- Calculates the sellthrough for each series.
- Use sellthrough to calculate revenue for downloads.
- Compare the revenue for download to the cost per download. If the cost is higher, that advertiser will not be profitable for that series.
Run the numbers for some series: I promise you that it will be an eye opening exercise.
Other things to do:
- Focus your advertising on Book 1 (or on a series of book series 1, 2 and 3).
- Try various types of paper, prices and covers to increase the conversion rate (and thus reduce the cost per download).
- Optimize your back to increase your sellthrough. Limit your CTA: a link to Book 2 with a short teaser e could be a link to your newsletter. Good sellthrough is the key to profitable advertising and, in general, a successful career.
Remember to make only one big change at a time, so you can measure the effects.
If you have problems with sellthrough, but your secondary subject is optimized, read reviews and try to find out why readers do not buy the next book. Do not review that book; wrap the series, then start a completely new series that addresses the previous craft problems.
And finally, do not force the problem. Many books can not be advertised profitably (outside of the offers featured on BookBub). When this is the case, do not spend money to advertise them.
Instead, market these securities through free and passive means: your newsletter and its autoresponder, social media, your website and so on. This will not generate explosive results, but it can produce a constant income, especially with a large amount of material.
You can find an updated and updated list of promotional sites (and their cost per download) on my site here.
That's all. Go to sell some books.
Appendix: destination metrics
The numbers vary according to gender; romance, in particular, has its own set of marketing rules.
Remember: your data is king. However, if your numbers are well below the "solid" benchmarks below, you have a problem that needs to be fixed.
- Conversion (free book): 25% + is solid; at most 50 – 60%
- Conversion (paid book): 2 – 5% + is solid; at most 10 to 12%
- Sellthrough (from a free book to Book 2): 2% + is solid; at most 10% – 15%
- Sellthrough (from a paid book to Book 2): 50% + is solid; at most 80 – 90%
- Sellthrough (from a book KU to Book 2-note that I refer to readers who borrow Book 2, not buying it): 75% + is solid; at most 85 – 90%
Also note that the sellthrough on successive volumes of a series that must be read in order can approach 100%, unless you do something as good as killing a main character.
Nicholas Erik is the author of 24 SF / F novels. He also manages marketing campaigns for independent authors in the genres of mystery, adventure and thrillers. Take a look at its latest free book marketing guide on nicholaserik.com/start.
A huge thank you to Nick for this wonderful resource: I'm sure there's been a lot of work and many of you will benefit from it. If you want more good things like this make sure you check out Nick's site above, especially the guide to the promotion sites mentioned in the top post. It is another incredibly precious resource: a practical list of noteworthy advertising spaces, broken down by effectiveness and regularly updated. Be sure to check here.
With the launch of the fan on Kboards since the new owners took over, it is more important than ever that we authors share our methods and help each other in every way possible, ignoring those who want to climb the ladder behind them. Complimenti a Nick per aver condiviso questa analisi e Buona pubblicità a tutti voi!