AMSAdwerks and the inevitable reconsolidation of publishing

Warning: this post contains arcane details about indie publishing. If you aren’t interested in indie publishing, skip this post!

I happened by Russell Blake’s site the other day when I saw his post about his investment in AMSAdwerks, a new company whose mission statement is as follows:

We specialize in Amazon marketing. Our experts manage your campaigns from your KDP-AMS or AA dashboards following your budgetary and ROI requirements.

We offer a distinct value to independent authors and small publishers who would rather work on their product lines instead of attempt to figure out the intricacies of the Amazon platforms. 

AMS Adwerks
336x280 Fiverr Pro

According to the graphic on the company’s homepage (see below), the fortunate author/client might hope to shovel $8,000 into the maw of the Amazon Marketing Services (AMS) machine, and net a profit of less than $2,000…minus the Adwerks commission, of course.

Source: AMS Adwerks

Russell Blake said in an earlier post that indie authors have little choice but to invest heavily in advertising nowadays. He’s right. Over the past year, Amazon has changed its algorithms to make its website a pay-for-play venue.

I’ve been listening to Bryan Cohen’s podcast, Relentless Authors Advertise. In the podcast, Cohen generously reveals the details of his extensive advertising activities throughout the week, including his final profit or loss.

Cohen, to be sure, is a smart guy who takes advertising seriously. And even he is barely making money at it.

The entrance of a company like Adwerks into an already overheated market will make advertising on Amazon even more expensive. I have no doubt that, with a cash infusion from Russell Blake, the company will hire a full staff of bright young things, and be very good at what it does….Certainly better than the typical indie author, tinkering away in her AMS dashboard, playing with ad spends of $10 or $20 at a time.

In 2019, the indie author who relies solely on the Amazon ecosystem must advertise. In 2020, the likely new imperative will be: The indie author who relies solely on the Amazon ecosystem must hire an outside consulting agency to tweak his ads constantly throughout the day.

This, of course, will require wheelbarrows full of cash. (Notice again, the sample numbers on the AMSAdwerks graphic. These are telling.)

I predict that by the middle of next year, or thereabouts, the requirements of advertising spending (for authors solely reliant on the Amazon ecosystem) will become prohibitive for most individual authors.

The likely result of this will be a reconsolidation of publishing.

Authors have always been technically free to self-publish. There has never been a law against it. Twenty years ago, though, indie publishing was prohibitively expensive, because of the economies-of-scale of printing and distribution.

That changed ..for a while. About ten years. But the speculative bubble of indie publishing has brought about a practical need to winnow down the number of books being published and thrown into the Amazon database.

Having observed the dotcom bubble of twenty years ago, I saw this coming. (Also, economics was my undergraduate major.)

But I was wrong about one thing: I predicted that Amazon would eventually charge authors and publishers to list their books on its site. A listing fee of $50~$300 per title would have met with some complaints, but many authors and publishers would have paid it.

But Amazon has opted for a much more profitable course (for Amazon): The company has convinced authors that they should engage in a bidding war for AMS ad clicks. Bids of over $1 per click are now common in competitive categories within the AMS system.

Very few authors will be able to make money at that game, long-term, selling $3.99 ebooks. The margins simply aren’t there.

Publishing will once again require deep pockets to shell out up-front costs…if you want to make any money at it, that is.

Economics is inexorable. Despite all the utopian pretensions of the indie publishing community, the future may end up looking very much like the past.

Nunn Bush