Amazon Decoded: A Marketing Guide to the Kindle Store: Let's Get Publishing, #4

By David Gaughran

Want to sell more books on the world's biggest retailer? Fancy Amazon doing the selling for you instead? Amazon Decoded: A Marketing Guide to the Kindle Store will show you how.

• Learn about Visibility Marketing and how understanding Amazon's philosophy can boost your sales.
• Discover the algorithms that really go into Sales Rank and dispel some remarkably common myths.
• Decode the ways Amazon recommends millions of books to readers every single day.
• Understand the critical differences between the Best Seller list and the Popularity list.
• Implement proven marketing plans, optimized for maximum Amazon visibility.

Whether you are exclusive to Amazon and chasing those page reads, or a wide author trying to survive the onslaught of Kindle Unlimited titles, Amazon Decoded will share the secrets of the Kindle Store and how you can sell more books.

• Language: English
• Publisher: David Gaughran
• Release date: Aug 4, 2020
• ISBN: 9789187109348

Book preview

Want to sell more books on the world's biggest retailer? Fancy Amazon doing the selling for you instead? Amazon Decoded: A Marketing Guide to the Kindle Store will show you how.

• Learn what Visibility Marketing is and how understanding Amazon’s philosophy can boost your sales.

• Discover the algorithms that really go into Sales Rank and dispel some remarkably common myths.

• Decode the ways Amazon recommends millions of books to readers every single day.

• Understand the critical differences between the Best Seller list and the Popularity list.

• Implement proven marketing plans, optimized for maximum Amazon visibility.

Whether you are exclusive to Amazon and chasing those page reads, or a wide author trying to survive the onslaught of Kindle Unlimited titles, Amazon Decoded will share the secrets of the Kindle Store and how you can sell more books.

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Introduction

It is hard to separate fact from fiction when it comes to Amazon because mere mention of its name gets you more clicks than anything else, with the possible exception of a celebrity nip-slip. It doesn’t matter how detached an article might be from reality—if it’s about Amazon, it will get lots and lots of attention. And those are valuable eyeballs too, let me cynically note.

For any doubters, this isn’t speculation; I have hard data from around a decade of running a popular publishing blog to draw from. It wouldn’t matter if I was breaking news that James Patterson’s books are really written by a pair of sentient boll weevils from Alabama, it would always get trounced by the most anodyne post with the word Amazon in the title. Amazon’s Favorite Shade of Beige, would get triple the number of views than exclusively revealing that JK Rowling is actually an AI that was fed 4,000 of the finest fantasy novels and then foisted upon an unsuspecting world.

My point is, there’s a lot of hilarious nonsense written about Amazon, which makes parsing this firehose of frivolity a tricky endeavor. There’s also a lot of money to be made from being utterly confident about how Amazon works, something that seems blissfully unaffected by the accuracy of those pronouncements. Indeed, you could make the argument that it is more efficient and profitable to manufacture gnomic statements about algorithms than to take the time to be accurate (or to concede what parts of this labyrinth are yet to be charted).

Because you’re a good writer and have a sense of structure, you know what normally comes next: I’m supposed to make a dramatic pronouncement at this point that proves I’m the only person you can trust, the only one who actually knows how Amazon really works. But here’s the bald truth: while hypotheses have been floated, and experiments carefully crafted, and test results analyzed, if you are expecting anything approaching the level of proper scientific proof, you will be bitterly disappointed. But what I will endeavor to do is clearly flag which information is highly speculative or what you might deem educated guesswork, and which can be taken to the bank.

There are also sections of this book that are based on confidential insights and what could be viewed as proprietary information (unless a lawyer is asking me), as well as lots of data from very successful authors that was shared on condition of strict anonymity. I’m not some kind of genius who has cracked the Amazon code. I can think of three people more deserving of that title off the top of my head, and you might nominate a few more yourself. My key input was convincing people to share information, then stitching it together into a coherent narrative so we could understand the system as a whole.

I’ve tested things myself, of course; I’ve been self-publishing since 2011 and poking the algorithms for almost as long. It wasn’t completely unfamiliar territory either, as I began working in the tech sector way back in the digital stone ages of the early 2000s. I have an analytical mindset, I’m told—which I think is a polite way of telling me that I have the natural empathy of a dehumidifier, but it’s also handy for figuring out how systems work... with the possible exception of the most flummoxing system of all: a satisfying novel.

Most importantly, I’ve always known that it’s best to surround yourself with people selling lots more books than you, and pick their brains clean like a vulture on Cheat Day. I’ve also been fortunate enough that (a) I’m in a position where writers share a lot of results and strategies with me and (b) I’ve worked on a few dozen marketing campaigns for some of the biggest self-publishers out there, across a range of genres. Each mega-seller (and each genre) operates in its own way, and the experience has been illuminating.

So, here are three things that I’ll tell you right away, before we get into anything that truly matters. This should help you decide if this book is for you, or whether you want to press the Big Red BS button and ejector-seat the hell out of here:

1. Amazon is governed by a few simple algorithms.

2. Those algorithms are knowable.

3. They rarely change.

Okay, I lied. #2 and #3 are mostly true, if viewed in soft lighting. #1 is a gross simplification. It’s really shorthand for, "You only need to know a few of the many algorithms that power Amazon, and I can break these down in a very simple way—even if the true technicalities are a lot more complex—and you will be able to directly apply this knowledge to your books, which will, in turn, make you enough money to buy a goddamn boat." (Please note, this includes model boats.)

Let me be explicit about something: this is most certainly not a book about Amazon Ads. You can take the knowledge in this book to help you get a greater return from any kind of marketing, for sure, but it’s not a book about Amazon Ads. If you are looking for a recommendation on Amazon Ads specifically, then read Robert Ryan’s Amazon Ads Unleashed—not only does it outline an excellent method for the Amazon Ads platform, it’s also unique in its overall understanding of the Kindle Store, when it comes to algorithms and the like and marketing books for authors.

I want to be clear about what this book covers before we dive in. I will mention Amazon Ads in passing—as I will with Facebook and BookBub Ads, and all sorts of other kinds of marketing and strategic approaches—and point you towards what I think are the very best resources for mastering them all. But this particular book will lean more towards big picture, higher level overviews of those platforms, where they specifically fit into your marketing plans, and how the pieces on the board should be arranged for maximum algorithmic benefit. I don’t want you to be disappointed, so if you were looking for specific guidance on the nuts and bolts of Amazon Ads, then you should return this book and read Amazon Ads Unleashed instead. Although, if you ask me—and I hope Robert Ryan doesn’t mind me saying this, as I don’t really know him—I think both books make excellent companions to each other.

What this book will do is unravel some of the mysteries of Amazon, so you have a clearer idea of how the Kindle Store works and, most importantly, how to directly apply that to your own books and marketing campaigns to put more dollars in your pocket—sometimes even without spending any.

You will learn Amazon’s bookselling philosophy—which is very different to any other store or retailer—and you will uncover the workings of the giant recommendation engine, the system that influences millions of book purchasing decisions every year. You won’t just learn how it works, but why it works the way it does—meaning you will understand why Amazon makes the decisions it does, which further means you can interpret changes as they happen and apply that knowledge to your marketing campaigns right away.

Because this is not a conceptual book. Yes, there are concepts and theories and ideas aplenty, but each section ends with a practical set of marketing takeaways you can apply to your books and marketing efforts right now. This isn’t pie-in-the-sky stuff. You will gain a deep understanding of Visibility Marketing, and how it can make your books more discoverable and add oomph to every single promotion you run.

This guide will also delve into all the marketing tools Amazon gives you and show you how to put the pieces together for maximum impact. Not only that, we’ll finish up with an entire section of marketing plans and case studies for every scenario, so that you can cycle through tactics depending on your current needs. And you will instinctively know which to pick too, because you will have decoded the mysteries of the world’s biggest bookstore.

In terms of actual structure, this might drive you barmy, but all the juiciest marketing stuff is in the final section: deal sites; Facebook, BookBub, and Amazon Ads; mailing lists and email swaps; and, rather crucially, actual marketing plans that take all these elements and arrange them very carefully for maximum algorithmic benefit. If you really, really are the impatient type, and don’t want to learn how the Kindle Store works, or why Amazon operates the way it does, then I guess you could skip right to that section. But you’ll be missing so much!

Part I breaks down the Kindle Store. Not literally, it’s still there—I have books to sell too—but after reading this section you will have a deep understanding Jeff Bezos’ business strategy, what Amazon’s exact role was in propelling ebooks into the mainstream, how authors are using something called Visibility Marketing to make their books more discoverable on Amazon, the ways in which Sales Rank works (and how it is popularly misconceived), and how to immediately apply all that knowledge to your business. You’ll be such a smartypants, I swear.

Part II gets right into the nitty-gritty and tackles the deeply sexy topic of metadata, showing you the very latest best practices in this ever-changing field, so that you can optimize your metadata and get your books in tip-top shape before your next promotion. And not just your categories and keywords either; we’ll also look at the various knock-on effects of decisions you make on things like your book titles, series name, and even your author name.

Part III maps out the giant recommendation engine powering Amazon’s never-ending quest to match the right products to the most willing customers, and looks at all the millions of different visibility opportunities in the Kindle Store—from Best Seller lists to Also Boughts and the mysterious and influential Popularity list—and shows you how to take advantage of them.

Part IV goes deep on the longest-running question in Indieland: Wide or Exclusive? We look at each element of KDP Select—not just Kindle Unlimited—and conclusively show you exactly how Amazon helps Kindle Unlimited books… but how it works against them too. (Yep, big twist coming right there, people.) You will also gain a much deeper understanding of whether exclusivity is right for your books or not, and the exact costs and benefits of going wide versus enrolling in KDP Select. On top of all that, you will learn how to maximize the opportunities that either path brings you, and also ways that you can (kind of) play both sides—but also the dangers that presents… and I’m not talking about Amazon’s rules.

Part V examines various promotional mechanisms to drive traffic to your books on Amazon, whether you are wide or exclusive. We’ll look at manual price promotions and free runs, as well as Countdown Deals and Kindle Free Book Promotions—but also how various Amazon promotions work, like those all-powerful on-site recommendations and the much-coveted email recommendations that go out to millions and millions of readers every single day.

Finally, Part VI draws everything together into cohesive marketing plans that show you when and how to use all the marketing tools at your disposal in a way that will seduce the algorithms into doing the selling for you. I did say you can skip ahead to that part if you are impatient to see all that glittering, glittering gold; honestly, though, you will get twice the benefit from these strategies if you work through the other sections first. Besides, each part ends with a whole chapter on marketing takeaways that you can apply to your books right away, so that you can immediately see the benefits of all this knowledge before shooting for the moon.

Before we jump right into it, a quick note on how to read this book. Left-to-right, you might be thinking. Fair enough! Just want to mention that I will link to a private section of my website throughout, which contains valuable bonus resources you should check out. It’s difficult to include lots of screenshots and video guides and the like in an ebook, so I’ve created a page at DavidGaughran.com/DecodedResources to house all that, and to give you lots more resources to tackle topics only tangentially mentioned here, so we can keep the focus on decoding the world of Amazon, and applying that knowledge to help you sell more books. And I’ll repeat that link throughout too.

Sound good? Let’s dive in.

Part I—Kindle Store

1. The Search Wars

Jeff Bezos was one of the earliest investors in Google—something that isn’t mentioned in most of the regular features examining Amazon’s success. This is a pity, because it explains so much of how Amazon works today; Bezos had a ringside seat for the great tech battle of the early 2000s: dominant giant Yahoo versus the upstart, Google. Now, I’m aware that this might seem like quite the digression—right from the off, too—but it really is key to understanding Amazon’s core principles, and why the Kindle Store works the way it does.

It might be hard right now to imagine Yahoo as the market leader of anything other than great value fire-sales, but it really was quite entrenched back then, completely dominating search and the nascent ancillary arena of digital advertising. I remember it quite clearly myself; I was offered a job by both companies at the same time and had a difficult decision to make. Yahoo was offering more money, but Google felt like the future—and that’s who I ultimately plumped for, despite the protests of the recruitment agent. It meant that I, too, had a ringside seat for the oncoming battle—one that is key to understanding why Amazon trounces the competition. Although that’s where comparisons with Jeff Bezos will quickly end.

Yahoo had many income streams at the time, but it was clear early on that online advertising would be the real growth area, and Yahoo aggressively monetized search by placing short text ads alongside the results. It seems pretty obvious now, but was groundbreaking at the time, as well as being a simple but effective way of making honking great piles of cash. The ads themselves were contextual, meaning they would change depending on what search string the user had inputted, and thus be at least somewhat relevant to what they were searching for, making them infinitely better than those ads for pet insurance you see on television, which just make you sad that you don’t have a dog. Or sad that Mr. Pickles died in a house fire, and you didn’t even get a fat check so that you could grieve in style, I guess.

But Yahoo’s ads weren’t as smart, contextual, or relevant as they could have been, because the system was powered by a very crude algorithm. The highest bidder on any given keyword got the top spot—that prime real estate, above the search results. Invariably this slot garnered far more clicks than those further down the screen or the ad slots alongside the search results, and those, in turn, got many factors more clicks than those below the fold, or on subsequent pages. Yahoo basically trusted advertisers not to waste their money by bidding on irrelevant keywords, and I respectfully suggest, as a fellow marketer, that they overestimated the field somewhat.

Competition for that top spot was fierce, led by large companies with deep pockets, determined not to cede ground to any challenger brands. Advertisers adopted a scatter-gun approach, building huge keywords lists to broaden their reach. Relevancy was of little concern to advertisers—or to Yahoo, it seems, who figured the all-knowing invisible hand of the free market would straighten it all out over time.

Which it did. Just not in the way Yahoo would have liked.

Google took a different approach, one that made that first wave of Wall Street investors very nervous: it decided to take a huge punt on the value of user trust. Relevancy, Google decided, would be a key factor in its ranking algorithm for its own ad platform—effectively meaning that an advertiser who was bidding a lot less could appear in that lucrative top spot, if their ad was relevant enough. The system could determine relevancy very easily, simply by comparing the clickthrough rate (CTR) of various ads.

Again, the algorithm was quite basic—if not quite as crude as the one powering Yahoo’s ad ranking. This isn’t speculation either; Google openly shared the formula behind how ads were ranked. I know this for a fact, as my job was to patiently explain this to high-spending advertisers, who were often surprised that we were being so open about the algorithm involved. Tech companies are often reflexively secretive—and Amazon can take this to a ridiculous degree—but it was in Google’s interests to be explicit about this particular algorithm, at least. Google wanted advertisers to understand exactly how important relevancy was in the system, so that advertisers would make better ads and improve their own return from advertising… but also to assist Google’s overall goal to make the ads more and more relevant and really build up that user trust.

Allowing a lower bidder to win the auction meant that Google made less money in the short term, something that might have panicked shareholders who are more usually focused on the current quarter’s revenue reports. But Google was betting that user trust had a greater long-term value—that if they could convince people to actually trust the ads, and if the ads were relevant enough that people liked them and found them useful, the system overall would generate many times more clicks, and earn Google much more money.

So it turned out. Google overtook Yahoo and became one of the biggest companies on the planet, largely powered by the incredible growth in digital advertising. Meanwhile, Yahoo’s value plummeted so much that it was actually worth a negative amount when it was finally purchased. I’m not even sure how that’s possible, and can only assume Yahoo embraced levels of fail that warped the laws of physics.

Bezos was watching all of this—early investor in Google, remember?—and relevancy would now become key to everything at Amazon. Soon Amazon’s core philosophy became to show users the product they were most likely to purchase—not the product that might earn Amazon the most money, or the product where Amazon had inked a sweetheart deal with the manufacturer, or which was currently overstocked. It would show users what they really wanted instead, regardless of the margin. The motive was to build up user trust in Amazon and its recommendations. And that user trust would then be something Amazon could repeatedly monetize over time for a far greater return.

In other words, Jeff Bezos realized that if you trusted Amazon, you would buy more and more stuff from them, and that this would add up to a hell of a lot more money over time than simply bilking you for another five dollars today by foisting something on you instead. This relevancy-first approach also neatly dovetailed with a lot of Bezos’ oft-quoted beliefs, like, There are two kinds of companies, those that work to try to charge more and those that work to charge less. We will be the second.

And just as Google’s users would actually actively peruse the ads accompanying search results—and happily click on them, because they were so relevant—Amazon’s customers actually enjoyed receiving recommendations, whether that was onsite or via one of the millions and millions of emails sent out by Amazon every single day. Emails that bring customers back to the store, of course.

Google vs. Yahoo isn’t just a moderately interesting footnote in the early tech wars of the 21st century; it’s also central to understanding how Jeff Bezos built Amazon, and how the publishing industry ultimately got upended. It is popularly believed that ebooks were the harbinger of doom for the dusty, fusty, and musty book business. There is some merit to that argument, but it’s also rather inconveniently true that ebooks have been around since the 1970s, and Amazon itself has been ruffling feathers since the 1990s.

Self-publishers might like to argue instead that they were the force that turned the publishing industry on its head, and, while their impact has been undeniable, and while they are certainly a piece of the puzzle (along with ebooks), they can hardly be the real answer here, as self-publishing predated ebooks and had little impact on the industry at large until other forces began to propel it into the limelight.

Others again will passionately argue that it was the killer device that popularized ebooks: the very first Kindle, that incredibly expensive, clunky-looking machine—somewhat akin to a fax machine that had been given a good going-over by a steamroller. Despite a good deal of mockery in the press when it launched (on November 4, 2007), a rather hefty $399 price-tag proved no barrier to success—Amazon sold out its entire stock of that debut Kindle device in just four-and-a-half hours. Which makes this argument quite compelling, I will readily admit.

But was this truly the final piece in the puzzle? Was this the glue knitting together the