By the end of this section you should be able to:
Understand why the metrics set up is necessary.
Understand the different components of a metric group, and how to set it up so that you meet your break even goal as per the books you advertise (breakeven on immediate revenue or on expected revenue)
Understand what each of the calculated columns (Estimated Sales Royalties, Adjusted Revenue & Estimated ACOR) on BooksFlyer mean, and how they are influenced by what you set up on the Metrics Setup section.
💡Note: In case you have not yet read them, we suggest checking the Good Practices on Amazon ads before continuing with the setup — they will help with this section.
The metrics setup will let us know:
How much you make per sale.
The break even point you want BooksFlyer to reach.
How much you are willing to bid per click so that we do not go beyond this.
Let's check what we have on the metrics section:
Metric group name. Name the metric group to easily recall which campaigns it applies to. For instance, if creating a metric group for the campaigns of a specific ebook series, name it "Series Name - EB."
Select Campaigns. This will open a popup so that you can select the campaigns where you wish these metrics to apply.
Net Royalty Rate (NRR). This number tells us how much money you make per book sale. We will use it to calculate the Estimated Sales Royalties you see on the Campaigns dashboard. Note that this only applies to book sales, not KENP royalties (you earn 100% of those!). Depending on the books you advertise, this number may vary:
If you only advertise book 1, or a standalone – it will be the royalties Amazon pays you per sale of that one book minus the delivery /printing costs.
If you advertise all books in a series and they have different royalties paid out — it will be just as mentioned, but instead of one book, we’ll take the weighted average of all books in the series.
To make this simpler, it is the net royalties you make after a sale of the book(s) advertised, taking into account royalties paid out by Amazon and delivery or printing costs. Find a few different examples of the NRR below:
💡Note: There is nothing to worry about if you do not know how to calculate your NRR. The RM & NRR Calculator spreadsheet was created for this purpose! You can access it by clicking on the button located at the top right corner of the Metrics section.
Revenue Multiplier (RM). This number lets us know the optimization goal you are looking for, and is used to calculate your Adjusted Revenue, which is used to calculate the ACOR — letting us know how much you earn vs how much you spend. There are two basic settings to this, depending on the books you advertise:
Default setting (1). For advertising standalones or all books in series. This will tell us to aim for break even between your ad costs and your ad revenue as seen on the dashboard.
Higher than 1. For advertising book one in series. This will tell us to aim for break even on a higher point than your ad revenue. If you are advertising only book 1 in a series, you will need the RM & NRR Calculator to get a number that adapts to the lifetime value of your series.
Find below a few different examples of what was discussed, along with how it would affect the Adjusted Revenue and the Estimated ACOR:
💡Note: The 'RM & NRR Calculator' template, as its name indicates, will also take care of this for you.
Tip: There are some cases where you’ll want to be more aggressive with your bids (spend over your break even point). Examples: New launch, promo or to push campaigns’ ad spend in general. For these cases, you can increase your RM factor by 1 or even by 2 to avoid slowing down your ad spend.
If you do this and afterwards you want to go back to your original RM, remember to gradually decrease it over a long period of time (around 30 days), checking results after each decrease, to keep your ad spend going.
Maximum bid. This is the maximum bid the tool may set when modifying bids, and it must be added when you set up your metrics. Once a target reaches its maximum bid, it won't go any further.
Tip: The maximum bid you set for a campaign should represent the absolute highest bid you would want to set for any target in the campaign. This may vary depending on your budget, your market, and your earnings potential: authors with longer series and great read-through may be ready to spend up to $2 or even $3 per click on hyper-relevant targets, while an author with a standalone will want to keep the maximum bid at $1 or even below.
Minimum bid. This will be the lowest bid the tool will set. If you leave the tool to do its job, in some cases the bid can go as low as $0.02, in which case you might as well pause the target. The minimum bid is there to ensure a minimum level of exposure for these targets.
Tip: This will again depend on your genre: in certain genres, you might get impressions with bids as low as $0.10. In competitive ones, like romance, your minimum should be higher.
⚠️ Important ⚠️: If you use an Up & Down bidding strategy, and/or modify your placement bids, your actual cost per click (CPC) could still be higher. If you're worried about ad spend, stick to Down or Fixed bidding and avoid modifying placement bids.
This metrics setup will help us calculate important BooksFlyer metrics that we use in our bidding rules to help keep your account optimized:
Estimated Sales Royalties. As its name states, it tells us the royalties you make from your sales.
Adjusted Revenue. It tells us the ad revenue we should take into account for the break even goal (is it on expected or immediate revenue?) and it will take into account both sales royalties and KENP royalties.
Estimated ACOR. This will compare the ad spend to the Adjusted Revenue (Ad Spend / Adjusted Ad Revenue) and will tell us if we are meeting our break even goal (100%), if we are spending less than we should (below 100%) or more than we should (above 100%).
The ACOR will be an important metric in our rules: We can use it to increase the bid if we are spending less than we should, and to decrease the bid if we are spending too much — always taking into account our ad revenue (either expected or immediate) vs our ad spend.
Once you've assigned a group of metrics to each active campaign in your account, you will notice how the warnings have disappeared, the Estimated Sales Royalties column is now filled in and the Estimated ACOR value has changed:
In the example above, the RM is equal to 1.
Feel free to reach out to me at sara@booksflyer.com if you have concerns regarding this section, or if you do not know how to apply the prior advice to your particular case.
When to apply the metrics to all campaigns, and when to select specific campaigns?
If you just have one book or series to be advertised, you may want to apply these metrics to all of your campaigns, since the metrics will likely apply similarly in all campaigns.
However, if you have different series or different books, and you target formats separately, your metrics will very likely apply differently. In these cases, it is recommended to define different metrics for the different products advertised.
To apply metrics to all campaigns, simply:
Click on the dropdown bar with the campaigns.
Click on Select All.
Insert the metrics: your NRR, the RM, the maximum bid you are willing to pay, and the minimum bid from which a target will still get some exposure.
Click on Save.
To apply metrics to specific campaigns, follow these steps::
Click on the dropdown bar with the campaigns.
Select the campaigns where you want the metrics to apply.
Insert the metrics: your NRR, the RM, the maximum bid you are willing to pay, and the minimum bid from which a target will still get some exposure.
Click on Save.
⚠️ Important ⚠️: Whenever you create a new campaign, and you have different metric groups, assign it to its corresponding one, or a new one if needed. Without this, you won't be able to limit your bids or define rules based on your ACOR.
Next steps
Now you have the data from Amazon, and you have set up your metrics — it's time to create some optimization rules!