Suggested bids are all over the place

[notthatamanda]

I just started a campaign where half the key words were ten dollars or greater.  One was $31.  I'm not expecting a lot of impressions with that campaign.

[TimothyEllis]

I call that BROKEN.

Any ad mechanism where the bid is double or more of the return of the sale has become totally pointless.

[notthatamanda]

Agreed.  There's a loss leader and then there's insanity.  I do feel less stupid about my week of experimentation with the fixed bid replacement scheme though.

[PJ Post]

I think it's important to remember that when it comes to AMS, we (vendors) are the customer - not, in any way, partners. It's designed to maximize profit, not necessarily sell books (products). It operates on the "Not Outrunning the Bear" Principle.

To wit:

Two guys are in the forest when a bear surprises them in a clearing. As they turn to flee, one of them shouts in a panic, "We'll never outrun the bear!" The other guy grins and says, "I don't have to outrun the bear, I just have to outrun you."

Sadly, this attitude is pretty common when it comes to self-publishing too.

[TimothyEllis]

I think it's important to remember that when it comes to AMS, we (vendors) are the customer - not, in any way, partners. It's designed to maximize profit, not necessarily sell books (products). It operates on the "Not Outrunning the Bear" Principle.

To wit:

Two guys are in the forest when a bear surprises them in a clearing. As they turn to flee, one of them shouts in a panic, "We'll never outrun the bear!" The other guy grins and says, "I don't have to outrun the bear, I just have to outrun you."

Sadly, this attitude is pretty common when it comes to self-publishing too.

The problem is, the bear is going to get both of them, so the first guy is just in denial.

[PJ Post]

I think it's important to remember that when it comes to AMS, we (vendors) are the customer - not, in any way, partners. It's designed to maximize profit, not necessarily sell books (products). It operates on the "Not Outrunning the Bear" Principle.

To wit:

Two guys are in the forest when a bear surprises them in a clearing. As they turn to flee, one of them shouts in a panic, "We'll never outrun the bear!" The other guy grins and says, "I don't have to outrun the bear, I just have to outrun you."

Sadly, this attitude is pretty common when it comes to self-publishing too.

The problem is, the bear is going to get both of them, so the first guy is just in denial.

It's the dog-eat-dog principle I'm pointing out - work with me here. 


eta: More specifically, AMS pits Indies against one another, indoctrinating us into believing that self-publishing is a zero sum game.

[TimothyEllis]

eta: More specifically, AMS pits Indies against one another, indoctrinating us into believing that self-publishing is a zero sum game.

What I cant get past is people spending 10k to make 12k and thus 2k profit, when on my worst months, I make 2.5-3k without any advertising at all. I just dont get it. Not just no advertising, but when I do put an ad in, AMS wont spend it.

I just dont see the point. Making that 2k has to be able to be done without spending 10k.

[Simon Haynes]

I just dont see the point. Making that 2k has to be able to be done without spending 10k.

If they're in a really competitive genre, maybe only have 2-3 books out, and already know the alternative is to make $100 a month without ads, then spend 10k to make 2k profit makes sense.

Personally I spend maybe $50 a week on ads, tops, unless I'm running a heavy duty promo like a Bookbub.  I run a mix of AMS and Facebook, and if they're not covering their costs I bail.

I only advertise the first in each series, and I can afford to take a small hit on the ads if the sell-through holds up.

I'm wide, so I also have a number of audiences to target on FB for each novel - e.g. Apple, B&N, Kobo, Google Play and Amazon. In practice, Amazon and Kobo seem to work the best.

I'm currently ratcheting up my AMS ads, trying to get more of a handle on that platform. There, I believe I may be hamstrung by not being in KU.

[notthatamanda]

What's considered a good profit for a business?  20% of gross?  I was always a cog when I worked in corporate so I'm not really in the know about that stuff.

My situation (I'm just going to simplify the numbers here a little) if my gross is $10K a year and my costs are $8K, then that is $2K my family didn't have before.  Yes I could make more working at a "real" job, but that would come with additional stress and complications, and we file jointly in the US so I'm in a higher tax bracket no matter what I make.  Now, if I can keep that 20% profit and ramp it up to 1 million gross, well my $200K profit is a pretty significant change to our lifestyle.    My less than minimum wage income works for us for now.  But that still doesn't explain a $32 bid on an ad for a book.  Maybe people are just getting tripped up with dynamic bidding combined with the bid plus thing interacting in a horribly expensive loop.

[TimothyEllis]

Maybe people are just getting tripped up with dynamic bidding combined with the bid plus thing interacting in a horribly expensive loop.

Most likely. A lot of them probably dont even know they are bidding that high.

Its a good time to not be doing AMS, until the new changes settle down.

[Tom Wood]

I just started a campaign where half the key words were ten dollars or greater.  One was $31.  I'm not expecting a lot of impressions with that campaign.

Just out of curiosity, do you mind sharing a few of those high-priced keywords and their bid cost? It would be enlightening to see them, if only to know what types of keywords to avoid.

[Anarchist]

Its a good time to not be doing AMS, until the new changes settle down.

I have the opposite perspective.

I was telling my wife the other day that it's hard for me to set aside ads and devote the time to writing. While each new book is an asset that'll generate profits for years to come, AMS is currently like an ATM (for me). It feels like a license to print money.

I'm in a unique position. I have a lot of PPC experience. The tactics I'm using are complex compared to what other authors are doing (and no, I won't describe those tactics). For what it's worth, I earn a LOT more than 2K on every 10K ad spend. You might be stunned.

The reason I feel now's the time for me to be in AMS is because this circumstance won't last. Authors will eventually figure out how to make AMS work. When they do, the easy profits I'm enjoying will evaporate.

I'm soaking up every drop I can right now.

Also for what it's worth, the markets for my brands are getting hit with a lot of high suggested bids. Here are some examples:
















That's why it's imperative to devise a strategy and tactical plan for AMS. I'm locking down top ad positions for these keywords for pennies. I suspect that's due to relevance.

[notthatamanda]

It's a romance author.  You should be able to avoid high price keywords, just check the suggested bids when you create a new campaign and also go in and check the suggested bids on existing campaigns, they change.   For the record I did bid on those keywords, at what I was comfortable with.  I just started that campaign this morning and I have a 140 impressions, no clicks, so I haven't spent anything either.  I haven't made any headway on my romance titles with AMS, it seems super competitive, so I just keep trying.  I think as long as I avoid the new fixed bid and dynamic up down I think I won't lose my shirt, pants and underwear.

Anarchist - Totally respect your right to privacy but if you are willing to share any details about the price of your books I am curious.  I know you think relevance is king, I don't disagree but I'm inclined to think price and amazon's profits to be made are part of that relevance.  But tell me to buzz off and mind my own business if I'm being too nosy.

[LilyBLily]

eta: More specifically, AMS pits Indies against one another, indoctrinating us into believing that self-publishing is a zero sum game.

What I cant get past is people spending 10k to make 12k and thus 2k profit, when on my worst months, I make 2.5-3k without any advertising at all. I just dont get it. Not just no advertising, but when I do put an ad in, AMS wont spend it.

I just dont see the point. Making that 2k has to be able to be done without spending 10k.

Actually, the profits we're making are huge compared to many businesses--huge in percentage, that is. When I was studying the publishing business many decades ago, it was said that it made a 6% profit, which was low compared to some businesses but huge compared to grocery stores, which made only a 1% or 2% profit. Yet these are massive businesses. But that's the point. If you invent something and take it to a manufacturer who will produce millions for you and market them, too, you might get a 1% share--of millions of items that retail for a very wide range of prices. You'd get rich from the total sold, not from the percentage. This is why we gnash our teeth and complain that AMS ads won't take our money--most of us can't scale up because Amazon's algorithms have decided that the true market for our book is smaller than we think. Amazon would rather not waste an ad space on a book that doesn't sell well.

In indie publishing, we think we're entitled to a 70% profit, which on the face of it is absurd. Every business has carrying costs, and advertising is a major one for any business that attempts to reach its market. The problem is the amount of time and effort we put into these ads for the few dollars we may receive. Unless one is minting money--and some of us are--spending hours and hours trying to decide on keywords and bids is not a cost-effective use of our energy. Writing more books and getting them to market faster will do more to improve sales.

Sometimes we've got hold of a sweet deal in a niche with little competition or we've come up with incredible keywords and we make bank. Then we can earn the incredible percentages. That's the dream, but for most of us it's not the reality. Still, a 20% profit is very nice. The trouble is that $2k is not life-changing money. I hope. So many people live in poverty that it could be.

[Anarchist]

Anarchist - Totally respect your right to privacy but if you are willing to share any details about the price of your books I am curious.  I know you think relevance is king, I don't disagree but I'm inclined to think price and amazon's profits to be made are part of that relevance.  But tell me to buzz off and mind my own business if I'm being too nosy.

At this time, I'd prefer to keep such details close to my vest.

I realized awhile ago that this situation (high ROI with large monthly spend) can't last. So for self-preservation, I mostly comment on strategy rather than tactical advice.

[notthatamanda]

Gotcha.  Totally understand, but I hope you don't blame me for trying.  Print money while the sun shines, live long and prosper, emphasis on prosper.

[Anarchist]

Gotcha.  Totally understand, but I hope you don't blame me for trying.

Not in the slightest. I'm of the mindset "you don't ask, you don't get."

[notthatamanda]

New high today, another Romance Author.

Most ads are winning auctions at bids between $13.69 and $56.15. For this keyword or ad group, we suggest a bid of $27.94. Increasing your bid can make your ads more competitive in auctions.

We could have a pool to see when it breaks $100. 

[David VanDyke]

If I was guessing, this appears to be an algorithm-driven situation, like computer-controlled online trading anomalies, or the $2000 paperbacks that don't exist. It has to do with the "squeeze" that shoots up the price of any scarce commodity, when the supply and demand curves intersect.

If the biggest authors with series values that support such ridiculous bids don't cap their bids lower, they'll pay it. In a sense, it's a self-limiting marketplace situation. Let the giants fight for domination, expending most of their profits in the process, while the common folk look for other advertising avenues.

Amazon is obviously reaping huge profits on this. There needs be no conspiracy to see that Amazon is simply maximizing the amount of money they can extract from its advertising customers--and in this case, authors are customers, since they're purchasing advertising even as they function as vendors and content providers.

It's a total win-win for Amazon to control all levels of the production and sales pipeline. It's what they've always wanted--a closed ecosystem, like Apple tries to have.

I'm not in any way saying the sky is falling--it's just the maturing of the market combined with the market dominance of one company, especially inside their own ecosystem. The cheese has been moved on the advertising. You have to either find cheese elsewhere, or go find the cheese again and be willing to pay high prices.

[OfficialEthanJ]

Most ads are winning auctions at bids between $13.69 and $56.15. For this keyword or ad group, we suggest a bid of $27.94. Increasing your bid can make your ads more competitive in auctions.

Is that for CPM bids or something? I freaked out and checked my ongoing CPC run. The numbers are more like $0.50-$0.75/click.

[notthatamanda]

Ethan - I've only seen it on romance authors, and it's not every keyword, just some random ones.  Overall I think suggested bids are down from a month ago.   It is per click though. 

David - I never considered that people might willingly be paying that much, but I guess anything is possible.  I don't think it's a conspiracy, just my mind wobbling at the numbers.

[Hopscotch]

...authors are customers, since they're purchasing advertising even as they function as vendors and content providers....The cheese has been moved on the advertising. You have to either find cheese elsewhere, or go find the cheese again and be willing to pay high prices.

Lots of good points in this thread and lots of good AMS advice on WS.  But I can't make AMS work for me consistently (and that even tho' everything I write is a work of unparalleled genius).  Decided to bail on AMS for the month of June to measure AMS impact on knock-on sales and KU reads.  And perhaps stay bailed.  

[Joe Vasicek]

I mostly comment on strategy rather than tactical advice.

Thanks, Anarchist. Here's a strategic question: are the books that you advertise in KU? What sort of a difference does AMS make for a non-KU book versus a KU book? Also, do you run AMS ads on any permafrees, and if so, what strategies have you found work for that?

[Joe Vasicek]

If I was guessing, this appears to be an algorithm-driven situation, like computer-controlled online trading anomalies, or the $2000 paperbacks that don't exist. It has to do with the "squeeze" that shoots up the price of any scarce commodity, when the supply and demand curves intersect.

Or a glitch in the algorithms that screws everything up.

True story:

Back in January, I ordered a bunch of author copies for an upcoming convention, only to find that KDP Paperback had screwed them all up with a printing error. So I withdrew all of my paperbacks from sale until I could figure out what to do about it.

Fast forward one month. I wanted to run a 99¢ promotion on one of those books, but when I went to change the price, I found that the paperback was selling for less than $2, and the ebook was price-matched to the paperback.

For the next three months, I went through Amazon customer service hell. Nothing worked. I even escalated the problem to [email protected], with a personal response from the team behind that email promising to fix the problem promptly. Nothing. Another month went by after I'd escalated the problem to the top of the company, and the problem still remained unsolved.

In exasperation, I decided to just buckle down and buy my own paperback in an effort to lift the price. After all, for a paperback to be priced so low, there had to be one last copy sitting in a warehouse somewhere, right? Otherwise, why else would they run such a steep discount? They were stuck with one last copy, and wanted to get rid of it so it wasn't taking up space anymore.

Or so I thought.

Sure enough, the price went back up after I purchased the last print copy. But then I got an email from Amazon, saying that they were cancelling my order because they couldn't fulfill it. Apparently, there never was a physical copy anywhere, and the whole thing was a database error or other glitch in the system. The customer service folks either didn't know how to fix it, or didn't care.

It's worth pointing out that this whole thing happened while Bezos was going through his divorce settlement. So maybe the stuff in his personal life is affecting whether or not it works to escalate things to [email protected]. Apparently, that's no longer an avenue of recourse.

So yeah, when the algorithm is glitched, screwy stuff happens. That's just as true of AMS as it is the rest of Amazon.

[notthatamanda]

People would have to be bidding very high and setting the bid placement very high to get the numbers we are seeing.  According to what Amazon tells us, see below, the maximum I can calculate is:
$1 per bid, up to $9 for placement, up to $13.50 for dynamic bid.
Of course they can bid more than a dollar.
$5 up to $45 up to $67.
The really high bids I have seen are all romance keywords, authors and titles.  I guess if you were selling a really long box set it would make sense.
These are very high bids, for one click.  Like David says, it's possible. Maybe I'm just too prawny to wrap my head around it, you'd have to have a big backlist and a lot of confidence in read through to bid like that.  Then there's a feedback loop, maybe, where people see high bids on keywords and think they must be worth it?  I saw those bids and made like this: 

I'm sorry for your paperback woes Joe, that sounds like a real pain.

What they tell you about bid placement (replaces bid plus)

"Adjust bids by placement" sets different bids by placement, and dynamic bidding adjusts these bids further based on likelihood of a click converting to a sale. Under "dynamic bid - up and down," Amazon may increase a bid by up to 100% for top of search (first page) and up to 50% for other placements. This leads to:

Top of search (first page): $1 increased by 50% = $1.50; which may be further increased to a maximum $3.00 with dynamic bidding (100% increase from $1.50)
Product pages: $1 increased by 25% = $1.25; which may be further increased to a maximum $1.88 with dynamic bidding (50% increase from $1.25)
Rest of search: $1 may be increased to a maximum $1.50 with dynamic bidding (50% increase from $1.00)

[Anarchist]

I mostly comment on strategy rather than tactical advice.

Thanks, Anarchist. Here's a strategic question: are the books that you advertise in KU? What sort of a difference does AMS make for a non-KU book versus a KU book? Also, do you run AMS ads on any permafrees, and if so, what strategies have you found work for that?

I'm "all in" with KU.

I'm ignorant about the difference in ad performance for KU books vs. non-KU books. I've spoken to numerous authors in my markets, some in KU and some wide, and there's no consensus. It'd be nice if I was tight with someone who was wide and employing my ad tactics on my scale. That'd simplify comparison and yield better insight.

Alas, I don't know anyone that fits the bill. Part of the problem is that many advertisers scaling their ads are cagey with tactical information.

Because I'm in KU, I don't have any permafrees.

[RPatton]

eta: More specifically, AMS pits Indies against one another, indoctrinating us into believing that self-publishing is a zero sum game.

What I cant get past is people spending 10k to make 12k and thus 2k profit, when on my worst months, I make 2.5-3k without any advertising at all. I just dont get it. Not just no advertising, but when I do put an ad in, AMS wont spend it.

I just dont see the point. Making that 2k has to be able to be done without spending 10k.

Actually, the profits we're making are huge compared to many businesses--huge in percentage, that is. When I was studying the publishing business many decades ago, it was said that it made a 6% profit, which was low compared to some businesses but huge compared to grocery stores, which made only a 1% or 2% profit. Yet these are massive businesses. But that's the point. If you invent something and take it to a manufacturer who will produce millions for you and market them, too, you might get a 1% share--of millions of items that retail for a very wide range of prices. You'd get rich from the total sold, not from the percentage. This is why we gnash our teeth and complain that AMS ads won't take our money--most of us can't scale up because Amazon's algorithms have decided that the true market for our book is smaller than we think. Amazon would rather not waste an ad space on a book that doesn't sell well.

In indie publishing, we think we're entitled to a 70% profit, which on the face of it is absurd. Every business has carrying costs, and advertising is a major one for any business that attempts to reach its market. The problem is the amount of time and effort we put into these ads for the few dollars we may receive. Unless one is minting money--and some of us are--spending hours and hours trying to decide on keywords and bids is not a cost-effective use of our energy. Writing more books and getting them to market faster will do more to improve sales.

Sometimes we've got hold of a sweet deal in a niche with little competition or we've come up with incredible keywords and we make bank. Then we can earn the incredible percentages. That's the dream, but for most of us it's not the reality. Still, a 20% profit is very nice. The trouble is that $2k is not life-changing money. I hope. So many people live in poverty that it could be.

But those profits are taking all costs and subtracting it from the gross revenue.

What Timothy was bringing up is ROAS (return on advertising spend) not profit. Profit includes all costs and all revenue.

Nielsen says the average dollar spent should earn back $2.8. If someone is spending 10k in ads, then they should be seeing a gross of $28k. Anything less is well below the average and in the corporate world would mean the marketing department/ad agency is one the chopping block. The goal people should aim for is closer to $4 back for $1 spent. If someone is getting $1.2 back for $1, it would be considered a failure to a lot of industries. Some industries can sustain getting $1.2 back, but it's not an efficient way to spend money and there are likely more efficient and profitable options out there. The problem is that spending money efficiently with a higher ROAS might not give you that giant gross number to brag about.

[PJ Post]

So yeah, when the algorithm is glitched, screwy stuff happens. That's just as true of AMS as it is the rest of Amazon.

And this is where I mention the whole 'better mouse trap' thing again. Amazon, the world's largest flea market, has way too much control over the book world right now.

[She-la-te-da]

eta: More specifically, AMS pits Indies against one another, indoctrinating us into believing that self-publishing is a zero sum game.

What I cant get past is people spending 10k to make 12k and thus 2k profit, when on my worst months, I make 2.5-3k without any advertising at all. I just dont get it. Not just no advertising, but when I do put an ad in, AMS wont spend it.

I just dont see the point. Making that 2k has to be able to be done without spending 10k.

I don't get this, either. It makes no sense at all. Not only does it take lots of money to make a small return, but the ad costs keep going up because people are willing to spend huge amounts for a tiny profit. It's an endless churn cycle that eventually puts everyone out of the game.

[PJ Post]

"Nice product you have there...it sure would be a shame if no one ever saw that it was for sale..."

1. Between books, vlogs, podcasts, music and youtube, pretty much everyone is a Creative these days, well...a few hundred million of us anyway. The noise is getting loud.
2. Creative validation is based upon being notice, which begins with being seen...enter google, youtube, facebook and amazon.
3. This need for validation, be it for likes, subscriptions or product sales, has spawned a chasm of a marketplace.
4. And the profits on this new Can You See Me Now^TM scheme are rapidly approaching Caligula levels of greed.
5. Here's the clever bit, these profits have no impact upon the need for visibility - totally separate things. The Need has become insatiable - the demand is already massive and still growing.
6. The younger generations of Creatives are being indoctrinated into this system, which will ensure that it becomes the new normal.
7. So if you want to be seen, you have to pay - more than the next guy, whatever that is. It's just that simple.

Yay...technology!