First, some background. This post is a little long, but if you don’t know what you’re doing in this type of advertising you stand to lose a lot of money. So, hang in there, I’ve tried to make it as easy as possible.
Goodreads Self-Serve Advertising is “pay per click” advertising. That is, you don’t pay unless someone clicks on your ad. Doing so takes them to whatever URL you provide. An example of this type of advertising are the Google ads that pop up on searches and on websites.
This is good, in that (hopefully) you only pay for people who are genuinely interested in your book. It can be bad if you don’t do it right. For example, if you target your ad too broadly, you will get clicks from people who would never be interested in your book.
The basic idea is that you set a budget (at least $50 on Goodreads), a daily spending cap ($5.00 by default on Goodreads), and an amount you are willing to spend for each click. Goodreads suggests 50 cents. All these figures are modifiable by you.
In my opinion, 50 cents is a lot to pay for a single click. Your fifty bucks will be gone with a mere 100 clicks. This is a numbers game. You will need hundreds of clicks to generate only a few sales. I set mine at 10 cents.
As with all advertising, the sole purpose is to generate sales. At the outset, I’m not sure that Goodreads’ program is intended to do that. For example, they want you to link your ad to the page for your book on their site. This is a benefit to Goodreads, as the ad did not result in someone leaving their site. But how does that help you generate sales?
In contrast, the whole purpose of Google’s Adwords is to get people to your site, and then convince them to buy. So, I don’t like the idea of paying to drive traffic to someone else’s site, but that’s how I set up my first two ads. Let’s see what happens.
In the world of pay-per-click, there are certain things we measure (metrics) and certain terms you need to know.
Impressions: That’s how many times your ad is shown. Goodreads calls it “views.” So, if you go to any page on Goodreads, you will see three ads appear on the right-hand side. Those are pay-per-click ads, and the fact that you can see them is one impression for each.
Click: That’s of course when someone sees the ad, puts the cursor over it, and clicks the mouse. Hopefully, it means that that person read the ad and is interested in your book.
Cost Per Click (CPC): This is how much each click costs. On Goodreads, you set it, and that’s what you will pay if there is a click. (In contrast, on Adwords, you set a maximum bid. So, each click is effectively auctioned off. Even if you set your max click at 50 cents, you may only pay 5 cents.)
Click Through Rate (CTR): This is the number of clicks divided by the number of impressions, and is presented as a percentage. If you get 3 clicks for 5,000 impressions, the CTR is 3÷5000=.0006, or .06%. Goodreads says a good CTR is .05%.
There is one more metric that Goodreads does not bother with: Conversion Rate (CR). CR is the number of sales you make divided by the number of clicks. So, if after 10 clicks you have one sale, your CR is 10%.
On Goodreads, I know of no way to measure this without doing fancy stuff on your website, in which case you would have to send the clicks there. (On Adwords, Google provides a snippet of code to insert into a page on your website that is only reached after a sale is made.)
Finally, is the Cost Per Conversion: The cost of each sale. This is the bottom line. How much are you getting in sales and profit for you advertising dollar. If you have a click set to 10 cents, and you get one sale for every ten clicks (which I think would be pretty good), then each sale costs you $1.00.
If you sell your book for $2.99 on Amazon, and you’re in the 70% commission bracket, then you for each sale you would get $2.09 (minus what they charge to deliver it, usually a few cents.) Subtract out the $1.00, and that leaves you $1.09 +/– per book.
If you set it at 50 cents like Goodreads suggests, then every sale at a 10% conversion rate costs you $5.00. You just lost about $3.00 on each book.
This highlights the danger of pay-per-click advertising. You could easily lose more than you gain if you don’t know what you’re doing. I don’t feel that Goodreads emphasizes this. They lead you to believe that the only thing that matters is the number of clicks, but that’s only the beginning of the analysis of any pay-per-click ad campaign.
What do you do? Here are my ideas.
The number one thing you can do is to educate yourself about PPC advertising. There’s a lot to it, and there are a lot of articles on the subject. Search Google and read them.
Don’t spend too much on it until you are able to determine you’re getting more out than you’re putting in.
Don’t expect great results right away. You are going to spend a little money to learn the ropes. That’s the way it is.
Experiment with ad content. One of the dogmas of PPC advertising is A-B testing. It’s amazing what changing one word will do for you. Make two ads with slightly different wording, then watch what happens. If one ad performs better, then tweak the other one. Fool with it until you get a decent CTR.
Monitor results every day. Keep track of CTR. Always work to improve it.
Target your market. For example, if you write romance, limit your audience to women. If you write horror, don’t put list it in the romance genre. You don’t want to shotgun it. You want your ad seen by people who might want to read your book.
Have a call to action. Tell people to add it to their “to read” list in the body of your ad.
One of the big benefits of Goodreads’ Self-Serve advertising is that when people add it to their “to read” list, the author gets notified on their author page who added it. You can contact these people and thank them (don’t be heavy-handed) and ask them to follow you. Since Goodreads’ program is not set up to result in direct sales, this is probably the best feature of the program.
So, here are my results as of day one:
It took a couple of days for them to approve the ad. Keep this in mind, and that any changes will result in a couple of days’ delay.
I have two ads in this campaign. My cost per click is 10 cents, I have a $50 budget, and a $5.00 per day cap.
My ads had 11,384 views (impressions)
I had 10 clicks, evenly split among the ads.
The CTR was 0.09%
Cost per click was 10 cents, so it cost me $1.00.
2 people added it to their “to read” list.
No sales so far.
I’m going to let these ads run for a week. I’ll do an updated post at that time.