KDP authors and publishers need ads to launch their new books. They also need ads to keep their catalogues from falling into oblivion. It is safe to say, that if you are not a big-time author, Amazon ads can help you increase your book sales.
Note that I never said “increase your book profits.”
Using Amazon ads is not enough to increase your profits. To do that, you must use Amazon ads the right way.
The fact is, some ads will work and some will not. Some ads will turn profit, and some will eat your money and never feel sorry for it.
To make money, using Amazon ads, in the long-term, all you must do is create lots of ads, kill the ones that do not work, and spare the rest. Killing them is relatively easy (especially if you are the merciless kind), so the question is, how do you know which ads work?
Alas, this is not a simple question. Amazon has not made it easy for you and who knows if they ever will.
There are those who swear by not using Amazon Advertising data because of its poor quality. There are also those who put up with using Amazon Advertising data complimenting it with KDP data.
I belong to the second camp, and I am here to tell you why you should too.
Before diving into this, I would like to share Amazon’s response on how KDP sales and Amazon Advertising (AMS) sales, differ.
In your Amazon Advertising reports, the information about sales is calculated using the total value of your brand's products sold within 14 days attributed to clicks on your ad.
Different formats of the same product are included in your sales information. Sales can be attributed to a campaign in two ways:
* ASIN: Sales of the exact ASIN being advertised are credited to the campaign.
* Title: Sales of the advertised title, including the advertised format and any other formats (for example, eBook or paperback), are credited to the campaign.
Ad sales reports for Sponsored Products campaigns include both ASIN and Title sales. Ad sales reports for Lockscreen ads include only ASIN sales.
Your KDP sales reports show only the final sales numbers and royalties you earned from books published in your KDP account. For paperback books, KDP sales reports shows the sale once your book has shipped, whereas the ad sales report will show the sale on the day it is purchased. The ad sales attributed to your products do not include reporting for Kindle Unlimited pages read or Kindle Owner’s Lending Library borrows.
Additionally, it can take up to 12 hours for your orders data to update on your Advertising report. As a result, orders data may be delayed in the Today date range. We recommend waiting until all orders data is populated before evaluating campaign performance. Payment failures and orders that are cancelled within 72 hours will be removed from orders totals.
For more information about KDP reports, please visit:
For more information about Advertising reports, please visit:
By now you must be thinking, why can’t they just tell me how much I made?
I am a software engineer myself and I must admit that, what seems obvious to you, is not an easy task, maybe not even for Amazon. Still, I believe Amazon must improve on this front (a lot).
Since Amazon Advertising does not report profits (only sales), it is best to target only one book format (eBook or paperback) in each campaign, and not both. This way, you will be able to tell what the actual profit is, by multiplying the sales reported from Amazon Advertising with the respective profit margin of each book format.
Use Amazon Advertising sales data to record sales, then use your paperback profit margin from KDP to calculate profit.
60% * (sales – printing cost) / sales
In my experience, Amazon Advertising will show sales faster than the KDP dashboard. This was even more pronounced during the Covid-19 pandemic, so it probably has to do with long shipping times.
Use Amazon Advertising sales data to record sales, then use your eBook profit margin from KDP to calculate profit. If your book is in KDP select, then your profit is:
eBook royalties without KU reads = eBook sales * 70%
If your book is not in KDP select, then your profit is
eBook royalties without KU reads = eBook sales * 35%
If your book is heavy on graphics, you should also subtract the download fees from sales before multiplying with the percentage.
If your Kindle Unlimited reads (KENP) contribute materially to your royalties, then you must also use a KENP profit multiple. To calculate actual profits, you multiple your eBook profits with that multiple.
To calculate the multiple, go to your KDP dashboard, reports > historical, search for your book, and select Last 12 months. Then, take the location where you sell the most copies (probably the US) and calculate
KU multiple = (eBook Royalty + KU/KOLL Royalty) / eBook Royalty.
eBook royalties = eBook royalties without KU reads * KU multiple
So, there you have it. This is, in my opinion, the most objective way to calculate how many royalties you made from an ad. To see if that ad generated profit, simply subtract the cost of the ad from the royalties. Fingers crossed – the number is positive.
Since it takes some times for sales to show up, make sure that you run the profit calculation over a period of at least one week, and preferably two.
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