Home » Big Publishing, Mike Shatzkin » Digital marketing scales and that could create new opportunities for capable publishers

Digital marketing scales and that could create new opportunities for capable publishers

18 July 2017

From veteran publishing consultant, Mike Shatzkin:

There are three new promotion and marketing opportunities for publishers of ebooks that have been created by the original upstart ebook publisher, Open Road Integrated Media. They all come from OR/M’s development of tools to promote their own extensive list of ebooks, but which now actually benefit from the inclusion of a broader array of titles than the publisher can provide on its own.

This development is interesting for many reasons, but not least because it demonstrates a point about “scale” in the digital era. While it has always been true that a larger title and revenue base enables a publisher to have a larger and more robust sales organization — more reps, more accounts called on more frequently, more frequent shipments that are more efficient to deliver — this could be the first time that a publisher has built digital marketing capabilities that, in effect, wanted more books to optimize their effectiveness.

Open Road’s digital marketing toolkit and resource base is now growing considerably faster than its title base. The company was founded on twin pillars; marrying a publishing opportunity with digital marketing prowess including a strong focus on the backlist. The publishing opportunity — gaining ebook rights to established properties that had not been nailed down in their original publishing contract — is inevitably past its heyday as the number of available worthy titles shrinks every year (if not every day). But the company’s digital marketing assets and expertise, as well as its direct audience reach, are growing faster than ever.

Open Road just announced that their email lists have grown past one million names, on which they are achieving an average 30% open rate and, for their bargain newsletter Early Bird Books, a 28% conversion to sale. These metrics constitute a loud demand for more titles. To provide them, either the company would have to shift to a much riskier title acquisition strategy to add titles of its own or make marketing services an important component of its growth so they could feed their engine with titles from other publishers. Delivering marketing services was the obvious choice.

. . . .

The Early Bird Books newsletter, which features ebooks which are currently (and temporarily) promotionally-priced, resembles what is offered by BookBub to the industry and is employed by some other publishers, probably most prominently HarperCollins with BookPerk, for their own books. Open Road is a big customer for BookBub but they believe, based on their own extensive experience, that the maximum effectiveness of promotional pricing is achieved by promoting it as broadly as possible. Open Road sees a synergistic effect when they promote through BookBub and Early Bird at the same time.

. . . .

In fact, Open Road’s carefully measured experience leads them to also advocate that promotional prices only be offered for a brief period — perhaps just one day — for the publisher to enjoy the biggest benefit of the tactic, sales momentum that carries over after the price has returned to “normal”. (Open Road calls this “the tail”.)

There are a few critical takeaways here. A core benefit to promotional pricing is to drive additional sales at full price. The promotional offer is amplified, and therefore much more effective, if it is trumpeted as broadly as possible. Using both BookBub and Early Bird achieves that. And in the digital age, having tight control of your metadata in the marketplace, including being able to change prices up and down with speed and certainty, is a fundamental requirement to maximize marketing effectiveness and sales revenue.

. . . .

Open Road’s experience — and that of other publishers like Penguin Random House and Simon & Schuster that have invested in verticals — demonstrates that vertical audiences are fertile ground for building awareness of a forthcoming book. This is of growing importance. Publishers have been seeing a steady reduction in book “launch” media opportunities. Fewer magazines are doing serialization. There is less book review print space and the most powerful online review opportunities, at the digital retailers, are glutted with self-promoters.

. . . .

What Open Road is looking for are clusters of titles that have a reasonably steady baseline of sales. Then, if the publisher will make Open Road the “vendor of record” for these titles for a minimum of a year, they will guarantee the historical level of revenue to the publisher and only take a share of the incremental lift they produce. During the period they control the titles, Open Road will invest their own cash in marketing services and manage the pricing of those title to maximize the revenue gain they will share.

Link to the rest at The Shatzkin Files 

 

 

Big Publishing, Mike Shatzkin

24 Comments to “Digital marketing scales and that could create new opportunities for capable publishers”

  1. I’m sorry, but I’m smelling fish for some reason. Anyone got some tartar sauce? 😉

    “During the period they control the titles, …”

    Ah, no, thanks anyway …

  2. Somehow, Mike’s posts always end up sounding like how one might explain basic marketing discoveries from five years ago to a child.

    • The general consensus is that Mike is about 5 years behind the times when it comes to publishing trends and whatnot, so this new message fits…

      • @ Todd

        Well, Shatz’s giving his clients what they want to hear… with a tiny dollop of reality thrown in for Shatz future-trends CYA.

        He comes across as a clueless fool here on TPV, but he certainly knows how to schmooze and butter up his Trad Pub clients! That’s what every successful consultant does. 🙂

  3. capable publishers???

    Well, I guess that eliminates the Big 5! 🙂

  4. So, the future of services like BookBub might be a mailing list that takes a percentage rather than a flat fee. I can see that happening eventually. Why not?

    • Felix J. Torres

      Well, there’s the matter of knowing that the mailing resulted in a sale as opposed to the sale occuring naturally. Then there’s the matter of collecting all those nickels and dimes.

      Bookbub is a “fire-and-forget” mailing. They get their money, they send out the ads. You may get a sale, you may not. Not their problem.

      Now, there *is* a way to make it work: if the marketting outfit being paid with a slice of copyright (which is what this scheme amounts to) is also the distributor to the retail outlets and takes their share off the top before forwarding the balance to the author or their agent.

      (Sound familiar?)

      Another way is for the retailer be the one paid extra to do the promotion but that kind of double dipping quickly becomes the very kind of pay-to-play gatekeeping the establishment loves (payola!) and Indies are escaping.

      • Smart Debut Author

        Well, there’s the matter of knowing that the mailing resulted in a sale as opposed to the sale occuring naturally

        Solved problem, Felix.

        There’s this little thingy called an Amazon affiliate code, which lets a marketing partner (or the author themself, for that matter) track (and be credited for) sales that happen after clicks through an affiliate link.

        If you want to see it in action, scroll up to the top right of this page and click PG’s affiliate link or do it right here. Then go shopping on Amazon and buy lots of stuff, helping PG support The Passive Voice at no cost to you.

        • I’m pretty sure Amazon has banned the mail lists from being Amazon affiliates.

          https://the-digital-reader.com/2016/06/15/amazon-brings-the-hammer-down-on-discount-ebook-sites/

          • Smart Debut Author

            See that affiliate tag at the end of this Amazon link from a recent bookbub email?

            https://www.amazon.com/Late-Show-Michael-Connelly-ebook/dp/B01MYDJB6R?_bbid=3042333&tag=bookbubnremail-20

            So, like, clearly it ain’t an issue for them.

            Email links can also be pointed at an affiliate’s own web site, where the customer then chooses their preferred retailer to buy from and clicks through. That doesn’t run afoul of anyone’s T&C’s.

            And big players like Bookbub can always negotiate nonstandard affiliate relationships with Amazon and other players. As I’m sure they have.

            • Felix J. Torres

              Only as long as Amazon allows it.

              Look to the free ebook sites Amazon put out of business because they were generating no new revenue for Amazon. They went along with the drain on their non-ebook business until Kindle was on a firm enough grounding to do without the added buzz.

              Some animals may be more equal for a while but Amazon is very jealous of their data. And their margins.

        • Felix J. Torres

          Affiliate links report that *something* was bought within a specific time window after clicking on the link. Not *what* got bought.

          Relying on affiliate links to trigger publisher charges could result in a publisher getting charged when something other than their book gets bought. Possibly somebody else’s book.

          So even if newsletters still could use affiliate links they would be generating a fair amount of false positives.

          Mr Shatzkin’s scheme is just another tradpub variant that only works if the marketer is effectively the publisher. Calling it “vendor of record” is just camouflage.

          He’s just looking for ways for traditional publishers to reassert their lost gatekeeping powers. Like with his proposal for publisher control over bookstore inventory.

          • Smart Debut Author

            Affiliate links report that *something* was bought within a specific time window after clicking on the link. Not *what* got bought.

            Clearly, you have zero experience with the Amazon affiliate program, which lets you see which specific items were purchased through your link, how many of them, and for exactly what price.

            But carry on.

            • That’s not what I heard when they were cutting off book blog affiliates. But times change.

              • Smart Debut Author

                Don’t believe everything you hear, especially from people with an axe to grind. That’s a good guideline to follow in general, and one that applies doubly in this particular industry, where at least half of what you “hear” secondhand from folks later turns out to be either misleading or flat out wrong.

                I can tell you from firsthand experience that Amazon’s affiliate program hasn’t changed in this respect since at least mid-2013.

  5. Anyone has experience with Early Bird Books?

    • My first in series is going to be in an Early Bird email on August 2. This came about because Nook sent round an email to its “publishers” offering the opportunity, and I asked Open Road if they meant indies too. Apparently yes.

      So far it’s been a bit like working with BookBub, only cheaper (I paid a promo price of $180, but it’ll be more like $200-250 once they get going). There was an editorial approval process–they’re looking for books that fit their readership. Right now signup is definitely in beta as they’re still working on a submissions and payment page, so you’d have to contact them via their website. They don’t take free titles (yet) so it’s a 99c deal.

      I’ll certainly be reporting on results somewhere, probably through ALLi. What interests me about this opportunity is the chance to try a promo on readers who are accustomed to looking for bargains on trad backlist titles, and paying for them. Are they as open to discovery as BookBub readers? Worth a try.

  6. Does anyone know what he said?

  7. “Then, if the publisher will make Open Road the “vendor of record” for these titles for a minimum of a year, they will guarantee the historical level of revenue to the publisher and only take a share of the incremental lift they produce. ”

    What prevents a publisher from cheating Open Road by claiming a fake high “historical level of revenue” so that they don’t have to pay anything? Open Road is completely at the mercy of the publisher’s self reported numbers for the publisher’s own sales.

    Conversely, Open Road could use this arrangement to take competing publisher’s out of the market entirely with a marketing exclusivity contract and then failing to market. (I have seen small businesses put completely under by larger competitors in several industries other than publishing. Always have marketing performance benchmarks folks!)

  8. open road was opened by one of the most shrewd, wildly successful publishers ever known. Jane friedman, former cheif publisher of Harper Collins, rupert’s baby. Knwing her, I’d say hold onto your cojones and your money when you negotiate contracts. She’s the queen of paying authors far less than they are worth. Do they do marketing? Yes. But where? Look closely. Read the fine print.

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