Calculating How Much You Can Afford To Spend On Marketing Your Next Book.

How much can you afford to spend to promote a series when you have a new book coming out?
 
Let’s say Book 1 has been out for a while and you have Book 2 coming out shortly. You decide to run a discounted price promo for Book 1 hoping to get sell through for Book 2. It’s a common tactic and it is known to work. We use it quite regularly.
 
But people have to know about the discounted promo, so you decide to either run some ads focused on Book 1, run some stacked promos with some of the reputable sites (BookBub, Fussy Librarian etc) or a combination of the two.
 
But how much can you afford to spend on those promos and ads?

---

Because of its discounted price, Book 1 isn’t going to give you much of a financial return (in fact, we’re going to totally ignore it), so you are going to be relying on Book 2 selling well in order for you to end up in profit.

Unfortunately, you don’t have any sales data on which to base any assumptions about sales for Book 2, so you could spend a lot of money on your promos and ads but end up making a loss.
 
That is what this blog is all about. We have come up with a calculation to allow you to forecast your royalties for Book 2 so you can make an informed judgement.
 
But first some “health warnings”.

---

1. This method provides a forecast, not a prediction. It is not guaranteed that the reality will match up.
2. You will have to base some of your calculations on historical data which might not be replicated in the future.
3. It makes some assumptions based on industry benchmarks and your books may not perform to the benchmarks.
4. Because of 1 – 3 above, the figure you end up with is “ball park”, an estimate. It may not be 100% accurate. But that is a limitation we feel is acceptable.

Please bear those health warnings in mind when you do your own calculations.

---

Your first step is to gather data on the cost of your promos (before you actually pay for them), which means looking at the promo sites and identifying the cost of the packages you want to use. Add those costs together to give you your promo costs, which I shall refer to as PC.
 
Next decide what daily budget you want to set for your ads and for how long you wish to run them. So, if you want to set a £5 daily budget and run the ads for 5 days, that’s a total of £25. We’ll call that AB for advertising budget.
 
Add AB to PC to give you an overall cost for your marketing, which we will call MC for marketing cost.
 
Next you need to look at your historical sales data.
 
If you have run a discounted promo for Book 1 in the past, how many books did it sell? If you are running a Kindle Countdown Deal, you may have to go back 90 days or further to find that out.
 
If you haven’t run a discounted promo before, work out your average daily sales for the previous 90 days (total sales over 90 days divided by 90).
 
A discounted promo would be expected to sell more copies than the 90 day average, but we don’t know how many more so we have to stick with data that we know is accurate.
 
Whichever figure you are using, we will call it SD for sales data.

---

The benchmark for “read through” from Book 1 to Book 2 is 70%, which means that for every 100 copies of Book 1 you sell, you can expect to sell 70 copies of Book 2.

​So, work out 70% of SD to predict how many copies of Book 2 you can expect to sell per day during the promo period, then multiply by the number of days over which you are going to run the promo (PD), so the sum will be SD x 70% x PD.
 
That will give you your forecast sales (FS) for Book 2.
 
Now you have to calculate your royalties for Book 2. The amount per book is displayed on the pricing tab of your KDP pages for the book, so it is FS x R (for royalties) to give FI (forecast income).
 
If you divide FI by MC you will get a number. If that number is less than 1, then your promos and ads are forecast to run at a loss.
 
If you get a number greater than 1, your promos and ads are forecast to give you a profit.

---

If you have forecast a loss you have some decisions to make.
 
1. You can decide not run your promos, not to run your ads or both.
2. You can reduce the number of promos you run, select cheaper packages if there are any, or reduce your daily budget for your ads or a combination of all of those.
3. You can go ahead as planned, hoping that the forecasts are wrong, and you actually sell more copies of Book 2 than expected. But that is much riskier.

If you are going to take risks like 3, then you may as well not do the calculations in the first place.

If, on the other hand, you have forecast a profit, you could increase your marketing budget in the hope of generating even more sales for Book 1 which should translate into even greater sales of Book 2.
 
What if you have more than two books in the series?
 
OK, that means you will have to forecast sales for Book 2 to Book N, where N is the number of books in the series.
 
First of all, you have to know that it is normal to lose readers after each book, so the audience gets smaller the longer the series runs. There are a variety of reasons for this, some of which are reader related and some of which are author related, but those are the subject for a different blog.
 
I have already told you that the benchmark read through rate from Book 1 to Book 2 is 70%, but the readthrough to Book 3 is 90% of that 70%. The read through to Book 4 is then 90% of that 90% etc.
 
Below is a table showing how many copies of each book in a 9 book series you can expect to sell if you sell 100 copies of Book 1. You can extrapolate those for however many copies of Book 1 you actually sell (figures have been rounded to the nearest whole number).

---

Using the table, you can calculate your total FI from read throughs using the method described above, to work out whether your campaign will make a profit or loss.

You will notice that I haven’t mentioned KENP reads from KindleUlimited. That’s because they would muddy the waters quite a bit.

If you have solid income data for those page reads which relate directly to previous promos, you can add that into your FI if you wish, but it is a simpler calculation to leave them out.

---

OK, we will be the first to admit that this method is a little bit “rough and ready”. But ask yourself this question: “Is it better to have a rough and ready calculation, or no calculation at all?” We think you will conclude that rough and ready is better than nothing when it comes to risking your money.
 
Before we end this blog, we have one more thing to say about those benchmark figures.

They are based on industry averages for read throughs for a series. However, we don’t know what the shape of the bell curve is that produced those benchmarks.

---

It is highly likely that bestselling series like Harry Potter, Jack Reacher, Game Of Thrones etc are skewing the figures and producing a high average. That means that it is possible that your Indie pubbed space opera or dark fantasy series isn’t going to achieve a 70% read through from Book 1 to Book 2.
 
That is a reasonable assumption to make. However, if your series is achieving less than a 50% read through rate, you need to be asking yourself why. What is it about Book 1 that is discouraging readers from reading Book 2?
 
Is it a marketing thing?
 
Or is there something wrong with Book 1 and readers don’t like it, so they aren’t buying Book 2?
 
You have to decide that for yourself. If it’s something wrong with the book, your reviews will probably tell you, but that is by no means certain.
 
But something is definitely wrong, and you need to find out what it is, or you are going to be spending a lot of money on promos and advertising for little or no return.
 
If you have enjoyed this blog, or found it informative, then make sure you don’t miss future editions. Just click on the button below to sign up for our newsletter. We’ll even send you a free ebook for doing so.

---

newsletter