AMS (Amazon Marketing Services) runs a small ad on your book on similarly themed titles. Your book has to compete against titles submitted by other authors, and the authors who have set their Cost Per Click (CPC) highest get the best chance of winning the auction so that their ad shows. I did product-based targeting, putting Forager with similar books such as The Hunger Games, Divergant, and so on.
I initially set a limit of 5c CPC. Received 228 impressions and 1 click, no sales. 10c did just as badly. Then I read that other authors were setting their CPC up to 50c! The problem here is that I also read that it takes from 40 to 150 clicks before you get a sale, and this for a $2.99 Kindle book, which nets 70% profit per sale. If you do the math, at 50c you could pay $20.00 to $149.50 to get one sale. That's not good. Note that 50c is only your maximum bid, you could win the auction at a much lower price.
I eventually ended up setting a CPC lower than 50c, but significantly higher than the original 10c I tried and failed with. To date I have sold 8 copies of Forager - The Complete Trilogy through AMS, with 161,700 impressions, 189 click throughs, costing $50.88. So to get $29.92 sales, with around $20 profit, it has cost me $50.88. The winning CPC rate is around 26c
If I was only interested in profit, I would give up, but I am treating it as advertising. 161,700 impressions is fairly impressive, and the word is slowly getting out about my book.
Update 17th May '16. I thought that the Kindle Unlimited pages read of my novels were a result of the AMS advertisement. For an experiment, I paused the ad for a few weeks, and then restarted it. There was no difference in the number or pages being read. I have now cancelled the ad.
Thanks for sharing such a great information on Amazon Marketing Services
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