by Steve Weber

#94, 6 May 2007

Can Advertising Help You
Sell More Books?

Selling on Amazon
Series

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Do you know how much your customers are worth? If you get any repeat business at all, your customers are worth more than the profit margin from a single book. If your average customer buys four books during the lifetime of their relationship with you - and your average net profit on those four books is $7 apiece - your average customer is worth $28.

If each of your customers is worth $28, would you spend a few dollars on advertising to attract more new customers? Online booksellers and other small businesses are increasingly experimenting with pay-per-click (PPC) advertising. The most familiar PPC ads are the ubiquitous Google "Sponsored Links" that appear alongside search results or on content-related websites. And Google is no longer the only game in town. Amazon and eBay are jumping into the PPC game, which could present new opportunities to booksellers.

Booksellers who use PPC ads target their customers by bidding on keywords related to what they're selling. For example, if you're selling science fiction books, you might bid on the keyword expression "science fiction," or perhaps a well-known author or title. If you bid high enough, your ad will appear on a relevant website when someone searches for your keyword. You pay for the ad only when someone clicks on it, and the more popular the keyword, the more you'll pay. An obscure keyword might be available for a nickel per click on some networks, while a highly competitive keyword might cost as much as $50 per click.

The ability to target specific keywords and phrases is essential to making PPC an effective advertising medium. To be sure, PPC ads won't work for all online booksellers; it depends on the size and type of your inventory. Booksellers who specialize have the best chance at succeeding. You can't just advertise that you're selling books because that isn't specific enough, and your ad bill will probably exceed your sales. But let's imagine you specialize in collectible cookbooks. In this case, you might do well to test a variety of keyword phrases - for example, "vintage cookbooks," "antique cookbooks," "collectible cookbooks," "Julia Child," and "Betty Crocker."

Until recently, Google AdWords and Yahoo Search Marketing were practically the only alternatives for PPC, with Google commanding a lion's share of the market. But this year things are changing.

The Short History Of Pay Per Click

Just a few short years ago, PPC was called "search engine advertising" because ads were always displayed alongside search results at Google, Yahoo, or another search engine. Sometimes the only thing differentiating your ad from a natural (or organic) search result was the small label "Sponsored Link."

PPC was viewed as a revolutionary way of advertising because you spent money to attract people who had already expressed an interest in what you were selling.

In the past couple of years, Google seems to have perfected PPC with its AdWords program. Not only are ads shown alongside search results, but they also pop up on millions of websites - relevant blogs, commerce sites, forums, etc. Like all good things, Google has earned so much money serving up PPC ads that other big Internet players have decided to make a run at it too.

Since advertisers have driven up the bidding on many popular PPC keywords in the past several years, PPC isn't a particularly effective way to sell individual items like used books, particularly if your bookselling is confined to an eBay Store or an Amazon shop. But if you're operating your own website and need to build traffic, PPC may be a viable approach.

Two new wrinkles have popped up in PPC just in the past few months that could provide new opportunities for booksellers. First, adMarketplace, which had been selling PPC ads exclusively on eBay has branched out, and sellers can now use ads to drive traffic wherever they want - to their eBay store, Amazon listings, or their own website. Last month, adMarketplace relaunched its Web site here.

The program is open to all online marketers, not just eBay users, and ads may be directed to a variety of sites, including search engines like Ask.com, LookSmart and other shopping-related websites.

Initially, AMP's text ads on eBay weren't overly effective because they were competing for attention with listings and not especially conspicuous. AMP claims the ads are now three times as effective since they get exposure off eBay as well.

Amazon's Foray into PPC

Meanwhile, Amazon is beta-testing its own PPC network, a system that displays ads on its book detail pages and can be used to direct traffic to your online store or any other website. For booksellers, one obvious advantage with Amazon's ad network is that it reaches nearly 50 million online book buyers.



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