The 14-Day Author Ad Profit Challenge
Day #8: How to Calculate Profit From Your Ads and Focus on Long-Term Growth
Brought to you by Bryan Cohen’s Author Ad School
Here’s What You’ll Learn Today
- How to find out whether or not your book or series is profitable
- Why embracing the slow-and-steady approach can lead to sustainable growth
Quick Tip: Calculating Profit
The most important statistic you need to gather from advertising with Amazon Ads is your profit. We calculate profit as your overall royalties compared to your overall ad spend (as well as your royalties for an individual book or series compared to the ad spend).
To start, you’ll bring up your KDP dashboard (tap the Reports button at the top of your KDP account) and look at your Royalties Estimator for this month. Next, you’ll open your Ad Dashboard, set the time period to the same month, and then look at your Ad Spend.
Royalties minus Ad Spend equals your Profit for the ads you’ve run during that month.
Royalties vs. Ad Spend
As a reminder, we look at Royalties on the KDP Dashboard and Ad Spend on the Ad Dashboard because your ads may not tell the whole story.
Some readers are opposed to anything “advertising,” but if they see an ad for a book, they will consider searching for that book manually and purchasing (which won’t show up in your ad statistics).
Readers who have a Kindle Unlimited subscription who borrow your book off an ad will register as a Click, but they won’t register as any Pages Read or Estimated Pages Read Royalties if they start reading the book more than 14 days after ordering (so it won’t show up in your ad statistics).
And anecdotally, the tracking on the Amazon Ad dashboard for some sales and KU borrows doesn’t always work (which may mean that some sales won’t show up as tracked in your ad statistics).
Add to this the fact that over 100 authors have reached over $1,000 a month in royalties using this profit calculation, and you’ve got some compelling evidence to make sure you split your screen with both KDP Royalties and Ad Dashboard stats handy.
Our First Profit Check
Since we’re limited to these two weeks of running and tracking ads before the Challenge closes, it may be a bit too early to make a serious judgment call on your current profit level. In fact, we’ve seen hundreds of posts over the years to the effect of, “Well, I only spent 30 cents, and I made 50 cents, so it’s kind of hard to tell if the ads are working.”
That’s why we’d like you to treat today as learning the process of calculating profit, rather than assuming you’ll be able to make a major author career decision today. When you learn how to calculate profit in this way, you’ll be able to do it for every future book or series, which can help you figure out which of your titles you should put most of your marketing effort into.
As with all things in the Challenge, your Zen Lemur patience and your desire to learn (rather than get immediate results) can serve you well with more reasonable expectations and hopefully some future profit (once again, you’re doing great!)
Profit for a Book or Series
As we’ve discussed, profit is your royalties minus your ad spend, which is pretty easy to determine if you have just one standalone book. But one of the amazing parts of writing more than one book in a series is that you can count on some percentage of Readthrough to the later books.
When you are trying to figure out the profit for a series, we recommend including the royalties from the later books of the series in your calculation (while leaving out any recent launches that could skew the data). So, if you have a second and third book in the series and you’re running ads to book one, you’d add up the royalties from Book 1, Book 2, and Book 3 and compare that number to your ad spend for book 1.
When you do write in a series, we still recommend just running ads to the first book (even if it’s a series of standalones) as your conversion will be the best on the first title, and you’ll get cleaner data that will serve you better in the long run.
Thinking Long Term
If you have one book or one series, then advertising and calculating your profit will be pretty simple, but for all other authors, there are some considerations for your future advertising. When you write in multiple series, it is likely that one of your series will be more profitable than the others, but you shouldn’t guess when it comes to this essential information.
After the Challenge, running Sponsored Product Auto, Category, and Keyword Ads to each series starter for 30-90 days (and ideally 100 clicks) can help you make an assessment of which book you should consider doubling down on.
To keep this process organized, we recommend using Amazon Ads’ Portfolio feature, which allows you to have a dedicated folder for the ads related to a particular book. At least once per month, we suggest calculating your profit for each series by using the royalties on KDP vs. the ad spend over on the Ad Dashboard, and if one series is head and shoulders above the rest, your new ad creation should focus on that book.
Slow and Steady Growth
It’s hard to see the progress of this growing grass we call “running ads to earn book profit,” but even just seeing a 50 cent spend turning into $1 can be huge if you scale it up.
50 cents of Ad Spend to earn $1 in Royalties could turn into $5 of Ad Spend for $10 in Royalties, $50 in Ad Spend for $100 in Royalties, and eventually even $500 in Ad Spend for $1,000 in Royalties.
None of this is a guarantee, and even a profitable ratio may not hold up when you spend more, but if it does, then you’ve just discovered something that could finally keep your books selling in between launches and help you to grow your readership.
It’s not going to be fast or flashy, but looking at your books and your marketing in this way could be a turning point in your mindset, which can lead to massive positive changes going forward.
Even if you saw a loss this week, stick with us because we’re going to cover what steps you can take to try to turn that income frown upside down.
Now, Let’s Calculate Our Profit!
Be sure to watch the screen share at 8:57 to follow along with the visual portion of this lesson!
The Challenge is Almost Complete
With tomorrow’s video, the Challenge is getting closer to the end.
You can still watch the videos for the next six days.
If you would like support for months beyond that, then you can join our premium Author Ad School Unlimited program.
The course and community come with 5+ additional modules beyond the Challenge to dive deeper into improving your metadata, your ads, and your book sales.
And even if you’ve taken other courses, there’s simply nothing out there like Ad School.
“Within 18 months, we went from $200 a month to over $11,000 a month in royalties. And the #1 thing growing our readership was Amazon Advertising.” – Author Trixie Silvertale
Here’s How You Get It
While some courses ignore supporting their author students, we have a dedicated and trained support team, and our Authors Learn Live office hours occur four days each week.
You can get three months of access to the best support in self-publishing for as little as one payment of $249 or three payments of $99.
You’ll also get an additional three-hour workshop with me and extra small group coaching when you join the program for 6 or 12 months.
Click here to join 3,000+ students in Author Ad School before the offer expires soon.
Day #8 Homework
•Using the guidance from today’s video, calculate your Profit by taking your Royalties from the KDP Dashboard and the Ad Spend from the Ad Dashboard
•What are your numbers looking like so far this month?
•Based on this video, what’s the next step you should take?
•You can post your answers in the Facebook or Slack group with the hashtag #AdDay8 as well as your own hashtag
•Please also comment on two other posts to spread some more good vibes
On the Next Day of the Challenge
We’ll learn how to accurately calculate your book’s Conversion Rate number.
We’ll also talk about what makes a “good” Conversion Rate, and why it matters.
You are here doing the work and that matters! We’re proud of you. Thanks for being a part of the Challenge and we’ll see you in the next video!
Have an amazing rest of your day!
Sincerely,
Bryan & the Team