By the end of this article 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 breakeven goal as per the books you advertise (breakeven on immediate revenue or on expected revenue).
Understand how each of the calculated columns (Estimated Sales Royalties, Borrows, Cost per Unit, Adjusted Revenue & Estimated ACOR) are influenced by what you set up on the Metrics 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.
How much you spend per unit sold or borrowed.
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.
The Metrics Section
Let's check what we have in 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 series in ebook format, 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 you might get below:
💡Note: There is nothing to worry about if you do not know how to calculate your NRR. By clicking on the "Use Calculator" button, you only need to fill in your books' data and we'll calculate it for you!
Revenue Multiplier (RM). This number lets us know the optimization goal you are looking for, and is used to calculate your Adjusted Revenue and 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 immediate 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 immediate ad revenue. If you are advertising only book 1 in a series, you will need to use the calculator in the metrics block 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:
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 avoid your ad spend dropping too much.
Average KENPC. This is only for those enrolled in KDP Select, otherwise the default will be 0. It’s the number of pages the book (or average number of pages if books) you are advertising has. It helps us calculate the Borrows (full reads you get on your books) and the Cost per Unit (how much you pay per unit borrowed and/or sold). You may find more information about where to find this number within the KDP bookshelf here.
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 more per click on hyper-relevant targets, while an author with a standalone may want to keep the maximum bid at $1 tops.
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.
Once you've assigned a group of metrics to each active campaign in your account, you will notice how the warnings have disappeared, and the calculated columns are now filled in:
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!
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