Thoughts on the Economics of Authorspace

I was reading my email this morning and found a bit of promotional material from a popular book lover’s site waiting for me. Part of what they do is paid for advertising, so I took a skim.

They’ve got a very comprehensive advertising package that runs for a month of promotion to a very targeted group. It looks well thought out, with about 1000 recipients.

The catch is that it’s about a hundred bucks.  That brings me up short.   The reason is that they don’t actually give me any sales expectations at all.  It’s a blind-faith sell.  No testimonials, no composite campaign data, nothing that would suggest to me that $100 is a great deal.

Well, you might think “yeah, but $100 isn’t that much… it’s got to be worth it.”  Well, lets stop and think about that for a moment.

If you are selling a “five buck book” via small press like I was, then you’re taking about $2.50 home per sale.  The accepted per-impression average response in sales is just two percent.  In other words, for every 100 people that see your advertising, 2 people will buy (presuming that the sales process doesn’t annoy them).

So, out of 1000 people, 20 will buy my book, per “impression”.  An impression is “one way I see your advertising”.  So, a blurb in a newsletter is one.  An excerpt and sales link direct emailed to them is another.  An author interview is a third.

All total there six types of impressions offered as part of their over-all comprehensive campaign.  Seven if you’ve got a book trailer.  I don’t, so let’s say six.

The math is thus:

  • 1000 customers * 0.02 customers/impression = 20 customers/impression
  • 20 customers/impression * 6 impressions = 120 customers
  • 120 customers * $2.50 gross profit/customer = $300 gross profit
  • $300 gross profit - $100 gross advertising costs = $200 profit

What concerns me most is that while I can expect to make a profit, there is nothing that the marketer is doing to confirm my expectations.  Which immediately makes me wonder if that expected 2% is going to be a lot lower.  If you’re doing advertising marketing, please, don’t hide your results.  Have a couple of testimonials and a running average of “this many writers advertised, resulting in this many sales, giving this expected penetration”.  If you can’t figure out how to monitor click-throughs, maybe you need to be spending some money on better tools for your customers.

I’m going to contact them today and get some more information, because that 120 customer sales number is a pretty strong lure for me.  I’ll let you know what comes out of it.

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