Small publisher Lean Media, run by Ian Lamont, recently noted on LinkedIn that tariffs will shake up Amazon advertising spend, “first as low-margin sellers with overseas supply chains close shop, and then by the bigger sellers who are looking for easy cuts in their advertising budget, such as Sponsored Brand. Bids should drop and conversions should rise for those who are still able to spend on Amazon Advertising, although the big unknown remains consumer confidence.”
I reached out to Lamont to ask him for further analysis and if this is something that authors and publishers need to pay attention to. I find Lamont unique in the publishing space because not only does he have insights into Amazon dynamics for publishing, he is plugged in to Amazon Seller Central. For those unaware, third-party sales (sales by vendors who are not Amazon) constitute more than 60 percent of sales through Amazon, and Amazon Seller Central is what they use to manage products.
Here is what he shared with me.
“The tariff impact is already being felt. Ocean container bookings from China to the US are down 60 percent, and the sellers of imported goods (whether Chinese brands or American importers) will pull back marketing spend as their available Amazon inventory sells through and/or they can no longer afford Amazon Advertising. But there are relevant considerations for book publishers using Amazon Advertising, even for those who only sell ebooks or paper editions printed in the US.
“First, book publishers are not only competing with other book publishers on Amazon Advertising. Thousands of keywords submitted by book publishers to Amazon Advertising overlap with keywords used by other sellers or are triggered in auto campaigns, in which Amazon’s AI experiments with ad placement based on the detail page’s metadata, customer preferences, and other factors. For instance, I publish Google technology guides for sale on Amazon and on my websites. For years, I have used negative keywords in Amazon sponsored-product campaigns to prevent bidding on Chromebook (and phrases containing Chromebook) because I would otherwise be bidding against every Asian Chromebook manufacturer running ads on Amazon. Tariffs will impact that keyword as some brands pull back, resulting in bids going down, although whether it’s enough for me to start bidding on Chromebooks remains to be seen.
“Assuming tariffs are implemented, I think similar situations will play out with other types of keywords for which Amazon’s algorithm might opt to display a book or a non-book product. An Amazon customer searching for summer beach gift might trigger a campaign for a folding beach chair made in Shenzhen or an indie romance publisher’s campaign that includes a phrase bid for summer beach read. Or it could be a Big Five imprint’s sponsored product auto campaign that picks up on something beach related in the book’s title or description or category.
“The second point I would like to make relates to consumer confidence, which I referenced in my LinkedIn post. JP Morgan now rates the chance of a recession at 60 percent (up from 40 percent). If a recession occurs, this will impact sellers of discretionary goods, including book publishers. This is regardless of where manufacturing occurs. Some publishers will fail; others will pull back on releases and marketing, which will result in lower bids, smaller budgets, and fewer campaigns overall (on Amazon and other platforms).
“One last thing to mention: These tariffs are supposedly part of a strategy to strengthen American manufacturing and reduce trade imbalances. … All of my manufacturing already takes place in the United States. But I did have one other active international market, Canada (about 3 percent of my revenue last year). The current administration’s imposition of tariffs on Canada accompanied by insults toward our northern neighbors has already destroyed my sales in Canada and resulted in a surge of Amazon.ca returns. Canadians are understandably angry, and the boycott of ‘Made in America’ is very real and extensive across Canada. As a result, I turned off all Amazon ads in Canada as well as cross-border fulfillment through Amazon Seller Central. In addition, usually every spring I have a big shipment to an Amazon fulfillment center in Ontario. This year I am not doing it.”
I’m grateful to Ian for sharing this additional analysis.
Related: China-based advertisers are about 10 percent of Meta’s revenue. Chinese retailer Temu has drawn back on spending. Learn more.
Jane Friedman has spent her entire career working in the publishing industry, with a focus on business reporting and author education. Established in 2015, her newsletter The Bottom Line provides nuanced market intelligence to thousands of authors and industry professionals; in 2023, she was named Publishing Commentator of the Year by Digital Book World.
Jane’s expertise regularly features in major media outlets such as The New York Times, The Atlantic, NPR, The Today Show, Wired, The Guardian, Fox News, and BBC. Her book, The Business of Being a Writer, Second Edition (The University of Chicago Press), is used as a classroom text by many writing and publishing degree programs. She reaches thousands through speaking engagements and workshops at diverse venues worldwide, including NYU’s Advanced Publishing Institute, Frankfurt Book Fair, and numerous MFA programs.
