2nd EDITION NOTE: This section is largely unchanged from the first edition (barring some edits for clarity). However, it does contain a bit of information on ACoS for AMS ads near the end.
I’ll warn you right away: part one of this book has nothing to do with ads. But if you don’t read it and complete the spreadsheet linked at the end, I would not advise running any ads because you’ll have no way to tell if they’re profitable. Unless you already calculate your read-through, and have your own spreadsheet, of course.
It’s unwise to make an investment without being able to calculate the ROI (return on investment). If you don’t know what your return is going to be, you don't know if you're sending good money after bad, and flushing it all down the toilet.
In this section, we’re going to discuss a series of 5 books, and how to calculate the read-through (RT) of that series, and why this is very important when it comes to ads.
I’m not suggesting that you can’t run ads for books which are not in a series (either standalone, or loosely connected books), but they are much more difficult to calculate read-through for, and are therefore riskier.
This is mostly because our distributors (read: Amazon) do not give us the tools to know in what order our readers read our books. Without a series, it’s very hard to tell how much total profit you will make from the sale of a given book. With a series, you can typically assume that readers start with book 1, and read in order to the end.
The benefit of a series versus standalone books is that you only have to advertise the first book; then you can run it as a loss leader to build your funnel—which is to say you make up the cost of advertising book 1 via the sales of subsequent books in the series.
There are scenarios in which you will advertise books other than the first in a series, but we’ll get to that later on.
Now, as defined in the “Terms of the Trade” section, your read-through is, quite simply, how many of your readers read through each book and then pick up the next.
There are two types of read-through: Cumulative, and Book Over Book.
What does cumulative read-through have to do with ads and ROI, anyway?
The thing we are trying to determine with cumulative read-through (CRT) is the value of a sale of book 1 in your series. In simple terms, you want to be able to say, “If I sell book 1 in my series, I will see x dollars in net profit.”
To do this, we need to know how many readers actually make it to the end of our hypothetical 5-book series, what books they drop off on, and how much net profit there is in every book (both on sales and KU reads).
This calculation is super simple for sales. At the end of the month, take all the sales of the last book in the series, and divide it by the sales of the first book in the series.
For example, if book 1 sold 876 copies, and book 5 sold 514 copies:
514 ÷ 876 = 0.5867
59%
This would mean that your entire series has a 59% RT. This is not amazing, but it’s not awful either. Based on the authors I’ve spoken to, this is right down the middle.
To work out the net profits across the entire series, you need to do this for each book in the series (book x divided by book 1).
Don’t panic. The end of Part 1 has a link to a spreadsheet that will do all this math for you. All you have to do is plug in your monthly numbers.
If you’re in Kindle Unlimited (aka KDP Select), then this is a bit trickier.
NOTE: If you have an omnibus edition that encompasses books 1-3 (for example), or just released the last book in the series, you will see the later numbers sometimes come out to be over 100%. If this is the case, you may be better off using your all-time sales numbers rather than monthly sales.
Another way to deal with omnibus editions is to add the sales number to each book it contains, but divide the KU reads between all three. If the books 1-3 omnibus had 10 sales and 12,000 page reads, add 10 to book 1, 2, and 3, but add only 4,000 page reads to each of those 3 books.
|
Sales |
Sales CRT |
Reads |
Reads CRT |
Book 1 |
100 |
|
43000 |
|
Book 2 |
65 |
65% |
41000 |
95% |
Book 3 |
50 |
50% |
40500 |
94% |
Book 4 |
48 |
48% |
39800 |
93% |
Book 5 |
45 |
45% |
39000 |
90% |
Cumulative Sales RT on the series: 45%
Cumulative Reads RT on the series: 90%
You’ll notice that the KU RT is much higher than the sales RT. This mirrors real-world experience (both mine, and many other authors I’ve spoken to). RT on KU is almost always in the 80% – 90% (or higher) range.
In this hypothetical series, the first book is $0.99, and the subsequent four are $3.99. They have the following KENPC values: 451, 511, 614, 499, 457. KENPC is Kindle Edition Normalized Page Count, which is how many “pages” you can get paid for a user reading if they read the entire book.
If we work out the diminishing cumulative read-through for both sales and reads, and assume a KENP rate of $0.0045, then for every sale of book 1, we make $5.94, and for every borrow of book 1, we make $10.27.
If your book has been picked up by KU readers, and has gained traction there, it is very common to see one borrow for every sale. This means that a sale of your first book nets you $16.21, because every time you sell a book, you (on average) also get a borrow.
These numbers are calculated with the correct royalties and delivery fees, so that is what an actual book’s royalties could look like, given the prices and page count stated.
Sometimes it’s difficult to mentally convert the KU pages read into a number of books borrowed. If you get your KENPC for each book in your series, you can convert pages read to books read, and compare your read volume between KU and sales more accurately.
The spreadsheet linked at the end of Part 1 has a spot for your KENPC, and it will show you full books read if you fill it in.
Here is where you get your KENPC:
This is displayed at the bottom of the “KDP Info” page for each book in your series.
The math here is pretty simple. All you need to do is divide your monthly pages read for a book by that book’s KENPC, and you’ll have the full reads value.
43000 (pages read) ÷ 451 (KEPNC value)
= 95.34 full reads
Seeing your KU page reads as full books read and comparing them to sales can help you understand the value, or lack thereof, for your books in the program.
Bookreport now supports this as well. You can enable a column named “Borrows” that lists a converted value from KU pages read to an estimate of books read in KU.
On the settings page, set the KENPC full read percent to about 90% to get a more accurate reading.
If your Sales RT for book 1 to book 2 is below 50%, something is wrong. If your KU book 1 to book 2 TR is below 75%, something is wrong.
By "wrong," I mean something has caused your readers to decide they don’t want to carry on. Usually, this means something pissed them off; there’s a problem with your writing, or you have a cliffhanger where the main conflict in the story is not resolved.
I should note that you should expect to see very different RT values depending on price. If book 1 is 99c, or free, you will see much lower RT to book 2. If it is full price (ie: the same as the rest of the books in the series), then you should expect a 70%+ RT from book 1 to book 2.