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.
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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.
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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.
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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.
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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