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It is not news to publishers that they have to engage directly with their readers


Since the merger that has created Penguin Random House, there has been precious little speculation (except by me, as far as I can tell) about what this new behemoth in trade book publishing could do to exploit their scale in new and innovative ways.

Their scale advantage is huge. PRH has something in the neighborhood of half the commercial trade books published, bestsellers and below. (You see numbers as low as 25% for this and most of the time estimates put it around 40%.) For several decades, the big US book clubs — Book-of-the-Month Club and the Literary Guild — demonstrated that having about half the books was “enough” for very large numbers of people to feel comfortable that their choices of what to read from within that group of titles would be sufficient for most of their needs.

My initial hunches, still totally unrealized, were that PRH would launch a subscription service with just their own books and, through the use of vendor-managed inventory, create exclusive channels of store distribution that wouldn’t be available to any of their competitors. (One senior executive from a competitor to whom I described this scenario said candidly, “we’d make our best books available to them for their proprietary channel if it were the only way for us to get the distribution”.)

One PRH executive kindly explained to me the company’s inherent resistance to the subscription model, which would seem to appeal most to the heaviest readers looking for a bargain. As the largest player in the market, PRH isn’t looking to reduce the spending by the people who are the biggest sources of industry revenue, which a successful subscription offer would inevitably do. (That subscription model, or “Netflix for ebooks”, is complex in ways that are often ignored, but which Joe Esposito spells out very clearly.) Of course, that doesn’t mean the company wouldn’t consider it in an environment where subscription services were taking a big part of the audience (certainly not the case yet, but watch what happens if Scribd or Oyster or Entitle or the new Rooster succeed). It does seem to say that they won’t be pioneers in this field. And there is no sign yet that they’re taking up my idea to use VMI to create their own bookstores, either.

But PRH UK — echoing what was said to me by RH US CEO Markus Dohle some years ago — has now announced it is becoming a consumer-focused publisher. Hannah Telfer, who was made “group director, consumer and digital development” in January, says discoverability depends on “building a direct relationship with consumers”. And she claims “our scale” is a key enabler of doing this “properly”. This is refreshing, since most of the industry thinking about how they would use scale seems to be more about consolidating warehouses than getting smarter about talking to consumers.

One article in The Bookseller details staff changes and initiatives around this goal. (And another expresses some skepticism about whether their plans are adequate to the task. That second piece suggests they need to think about selling direct, a recommendation I have expressed some reservations about.) On the one hand, the first article suggests some really broad, company-wide objectives, including “the potential for Penguin Random House to be a cultural and entertainment powerhouse; a home for all audiences”. At their recent sales conference. CEO Tom Weldon described the opportunity for PRH “to create the blueprint for a publisher brand as a consumer brand and, in doing so, capture the attention of the world for the stories, ideas and writing that matters”. That sounds like one big brand.

At the same time, there was clear acknowledgment of the importance of what we call “verticality”, or “audience-centricity”. An “audience segmentation project” was announced. So was cross-imprint attention to specific subjects, with “cookery” and “crime” cited. One tool that it is clear Penguin Random House has and will use is called Bookmarks, described as “the Random House readers’ panel”. New plans call for it to “become a PRH resource, giving all parts of the business access to over 3,500 readers through surveys and focus groups”.

Of course, the more different ways the company wants to use that panel, the more difficult it will be to get meaningful data from it. In fact, it would seem that what is really called for is an ongoing “panelization” process, by which new people are being added all the time to a number of panels that can answer questions about different communities of interest. One panel can’t serve all purposes.

This brings two topics into bold relief that have not historically been part of a book publisher’s thinking or skill sets.

1. It calls for new and nuanced thinking about brands.

2. It calls for a multi-faceted plan for engagement with individual consumers.

Advice directing publishers to think about branding for consumers is plentiful these days. Since I first started thinking and writing about publishing and brands, something disruptive occurred which I wasn’t thinking about at the time: self-publishing. My original notion was that the challenge was establishing brands with clear vertical, audience-centric identities. Probably the best example of doing that successfully in the big US houses has been Macmillan’s establishing of Tor as a brand for science fiction and tor.com as a destination site for science fiction devotees. It is well over two years since I wrote about tor.com having hundreds of thousands of email addresses that they could address with promotions that got very high open rates.

Tor.com gives Macmillan’s science fiction list a clear label of not-self-publishing. But outside Tor, for their general list, Macmillan uses many imprint names. A novel might be published as St. Martin’s, Holt, Farrar Straus, or Thomas Dunne Books (among others), each of which probably has “meaning” to buyers at major accounts, big libraries, and major book reviewers, but which means precious little to the general public. Does the average person know those names better than they know, let’s say, Thomas & Mercer (the new imprint of Amazon) or Mike & Martha Books (a name I just made up)?

(Please note that Macmillan is being used here for illustrative purposes; every major house has the same issues with imprint brands that are really intended as B2B signals, not for the consumer.)

But ultimately, it is important for Macmillan, and for every publisher, to stamp “major publisher” on their books to let the public know “this is from a long-standing and established book publisher” on the assumption, which I would share, that people who don’t know the names would still trust an institution rather than a self-interested individual to “pick” their books.

(Obviously, most people choose their books because of the author, the subject matter, a recommendation from a friend, or even based on some combination of the cover, the description, and the price. How much of the audience would be influenced by knowing that a major publisher was behind the book? We don’t know that, and we don’t know whether that number will grow or shrink based on the always-increasing output of self-published material that has not gone through a publisher’s editing and formatting rigor. And, by the way, doing aggressive branding means the publishers need to pay even more attention to their editing and formatting. Each instance of an inferior branded product hitting the marketplace will weaken the value of the brand.)

So here’s the rule about branding. Each major house should pick one name that is an umbrella. It goes on every book to establish the company as a major source of quality literature, enjoyable reading, and book-packaged information.Trying to target more precisely than that should be the job of the “imprint” brand under the umbrella brand. And that brand should be vertical, identifying subject or audience. That’s Tor in the Macmillan example above. Note that right now Macmillan is not a brand being used by any of the US companies in the Macmillan family.

The plan for engagement with consumers is much more complicated and has many components. One is simply collecting email addresses and permissions to ping people and then utilizing them. Turning almost all the marketing efforts you can into components of an email-gathering machine is a big part of this. This is a game everybody should be playing: all the retailers, all the publishers, and all the authors. We know from recent assignments at our digital marketing business that the smartest literary agents are figuring out how to help their authors do this. We can’t be far from the day when an agent will routinely ask a publisher “how many relevant email names do you have to promote my author’s next book to?”

But email lists, as the PRH UK statements suggest, are just one aspect of consumer engagement. And the statements from PRH also implicitly claim that a much bigger company has advantages in pursuing it. Aside from their ability to analyze existing email addresses among their signups or that they find through other means (hitting their web sites, self-identified in social media) to understand and reach audiences better, large companies can create special interest verticals to pull traffic (driving email signups) and give themselves a range of promotional opportunities. We see Simon & Schuster doing a lot of that kind of work. I’ve become a daily fan of “250 Words”, an email from their new business book web vertical that summarizes the core proposition of a business book every day. Whether that, or other vertical efforts of this type the house is trying, can turn into a remunerative web community or even a good place to get a book launched, is still an open question. But it is the kind of experiment that could produce a launching pad that could really help S&S with business books.

We touched on the notion that creating dynamic panels of consumers to tell you things — things you can ask all the time — is also a real value. We are aware of a niche magazine which routinely uses Twitter to ask its readers for opinions about various things, like what angle to take on a story. They get very fast responses that way. We know that Osprey, the military history publisher, routinely asks its audience for opinions when they are choosing among subjects for development of a book. (And it is relevant to note that Random House UK has hired Osprey’s energetic and visionary CEO, Rebecca Smart, to run their Ebury imprint. That’s another way to employ scale: hire away the best smaller-company executive talent!)

A good approach for a big house that can harvest large numbers of email addresses would be to routinely ask consumers whether they would like to be polled about questions that will guide the house’s publishing and marketing strategies. Doing that would give them fresh names all the time. What Osprey does with their specialist audience could become routine practice to a house with a big enough email list. Consumers could be asked about whether a topic is a good one to sign up before the house makes a commitment. They could also be asked about packaging and pricing. And if that kind of interaction were built into the house’s practice, over time they’d learn when consumer opinions are a good guide to follow and when they’re not (because they won’t always be!)

We are in the earliest days of big publishers changing from near-total dependence on intermediaries to reach their markets to having direct relationships with consumers. For now, most houses are pretty quiet about what they’re doing, partly because they think they’re inventing something and partly because they don’t know how well any of this will work. But relative silence shouldn’t be interpreted as relative inaction or inattention. It isn’t news to the big publishers that they need to talk to audiences directly. Penguin Random House has advantages of size relative to the others in the Big Five, but the rest of them have advantages of size relative to everybody else.

Note to readers: because of glitches and fiddling not worth detailing, the last two posts didn’t go out through our normal email distribution (which makes some people refer to this blog as my “newsletter”!) If you didn’t receive posts entitled “Getting Mark Coker Right This Time…” and “Sometimes One More Calculation…” they are linked here for your convenience.

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Declarations and forecasts of Great Change in the book business need specificity to be useful and often do not provide it


A recent post here that incited a long comment string and another on FutureBook that was quite unrelated from the estimable Brian O’Leary have helped me formulate some thinking which I hope can be helpful in evaluating any “Great Change” post that arises about publishing. And they do, indeed, arise often.

O’Leary’s post builds on a theme he is persistent about pursuing, which is that communication, which in his writing seems to conflate with publishing, is moving to a linked-and-continuous conversation rather than a set-content-package (like a book or a magazine). The post suggests that the “books”, such as they are, will emerge from the conversations.

This recalls for me a comment I heard a few years ago from the father of digital publishing, David Worlock. David told me, “surely, in time, the number of books created within the network must exceed the number of books created outside the network”. By “network”, David meant “Internet”.

I don’t know how long “in time” was intended to be in David’s mind, but I figured “decades”. And in that time frame, I agree.

The other long-ago wisdom I keep recalling as I read predictions about our digital reading future is what was always said by Mark Bide when we began our “Publishing in the 21st Century” conferences for VISTA (now Publishing Technology) in the 1990s. Mark always reminded the audience that “book publishing is many different businesses” so that everybody would keep in mind that what we said about trade might not apply to sci-tech and what we said about books for lawyers and accountants doesn’t apply to publishers of college textbooks. What brought everybody together was the form of the “book”, which was already then a weak unifying principle for what were really many very different businesses.

This is now more true than it was when Mark used to say it 15 or 20 years ago. In trade, which is the part of book publishing I know best, we are seeing that the business of publishing genre fiction is different from kids books, which is different from serious non-fiction, which is different from illustrated how-to, which is different from serious fiction. Travel books and computer how-to have suffered serious erosion, and some of us would expect to see cookbooks do the same, if they haven’t already. I base that notion on my belief that cookbooks, like travel and computer how-to, are books where “the unit of appreciation doesn’t equal the unit of sale”. O’Leary put it differently but makes a similar point:

The use of bundled media as the dominant form of shared content is ending. This trend has already affected newspaper, magazine and some types of book publishing. As readers look to customize their own content consumption, it will continue.

This makes me confess that I confidently and erroneously predicted in the 1990s to a close friend deeply involved with newspapers that they’d be “dead in five years”. I saw what Brian is talking about: that the bundled media idea meets its match when people can bundle their own. And I was directionally correct about the trouble the newspaper business was heading toward. But The New York Times is still dropped off at my door each morning (although I have often read a lot of it in bed on my iPhone before I cross the apartment to pick up the paper version) and most American cities still have a daily paper, even though many of them have bitten the dust in this century.

The extended discussion in the comment string of the prior post had to do with to what extent publishers serve authors, and to what extent authors are better off eschewing publishers and working on their own. Unless and until publishers turn digital marketing at scale into a clearly compelling proposition, their power to serve authors effectively diminishes with each closing bookstore. The less bookstore- (or brick-and-mortar retailer-) dependent any book is, the less additional benefit in sales and exposure can be delivered by a publisher (although a cash advance and somebody to handle all the business aspects of putting a book out will still be both helpful and persuasive to many authors). Bookstore shelf space, and printed books, seem to be suffering slower erosion over the past year or two than they did in the several years before that. Michael Cader has made a convincing case that we actually know that for a fact. But, even if we accept the fact, whatever erosion continues will affect different books and authors to different degrees.

As I was reading Brian’s post, which advocates delivering information with plentiful links that would allow reader-controlled exploration of the topic at hand, I thought about the book I am reading right now. That is Doris Kearns Goodwin’s excellent “The Bully Pulpit”. It’s complex and the web is loaded with material (about Theodore Roosevelt, William Howard Taft, and a cast of characters who were the muckraking journalists of the time) that could provide additional facts, depth, and color. But the valuable deliverable here is that Goodwin has sorted through all of that and more and delivered a masterful telling of a complex holistic story. That’s what I’m buying and enjoying. “Enhancements” would almost certainly undercut its core value to me as a reader. Links would just be distractions that would make me lose the thread of the coherent story.

Nonetheless, what Brian is saying might be true for me if I were reading a book explaining some aspect of economics or technology. And it might be true for a history scholar who was reading “The Bully Pulpit”.

So generalizations about the book business, whether they come from a self-published author or an industry expert like O’Leary, really require us to do a little parsing to make them useful. We’d be steering toward a more constructive conversation if we posed three questions every time somebody posits a Great Change we will see in the book business.

1. Which books, exactly, should we expect to be affected by this particular Great Change? This is necessary to specify now that most people would agree that “books” has become a pretty worthless generalization.

2. How soon can we expect a meaningful change in the perceived utility, and therefore the demand, for the affected books? That is, are we talking about a change that is already happening and evident and having a commercial impact (travel books are suffering and have been for years) or one we expect to see in the future (readers abandoning longer form books for shorter content choices) for which we might have only the scantiest evidence is affecting commercial reality today?

3. How likely is it that whatever the Great Change is going to be that publishers are well-positioned to affect or control or accommodate it? Brian suggested, and I wholeheartedly agree, the answer is “often not”. That being the case, the prediction of the Great Change should not necessarily be accompanied by the prescription that the publisher should change behavior to address it, although it seems to me they almost always are.

That last point is a very important one. Publishers, like all businesses, succeed on the strength of their expertise and their commercial network. Many would agree that the function of children’s books and craft how-to books could be better served if they utilized elements that are possible digitally — animation, video, interactivity, audio — and that would improve the utility of a digital version over a printed book. But does that mean that today’s book publishers can “own” that future business, if both the creative requirements and the marketing and distribution are well outside their prior experience?

Could a publisher of travel books have created Trip Advisor? Does the publisher-created Cookstr do the job of digital assistance for a cook better than allrecipes.com or cookbooks.com or betterrecipes.com? It doesn’t take a lot of deep thinking to see that a publisher’s skill sets are not the best match for building an interactive internet business where content is a component of the strategy but everything else about it is different from publishing books.

Over time, I expect the book business is going to get smaller, whether the number of books consumed goes down or not. Among the reasons for that is that, over time, the intrusion of self-publishing entities will be even more disruptive than self-publishing authors have been. Another reason is that wome information dissemination that has taken place in books will move away from books. It might also be true that the overall public appetite for reading longer forms will diminish, although any publisher with digital distribution can address that by changing the mix of what they publish.

Whether “book publishing” or “book retailing” shrinks, disappears, or changes form depends on how widespread across the various silos of interest and utility we call “books” today are the many disruptions that will affect those verticals in different ways and at different speeds. And generalizing about what these changes mean, let alone delivering advice that isn’t informed and bounded by an understanding of how any particular book or author or publishing program fits into the time and scale of any particular change, is as likely to be wrong and harmful as it is to be correct and illuminating.

So remember Bide’s decades-old admonition that the book business is not one business. It is the one generalization about books and commerce that has been true for well over a century and will continue to be true as long as books — printed or conceptual — continue to be something worth discussing.

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Publishers do need to sell direct, but here are five things they should at least be started on first


The “Code Meet Print” blog by Glenn Nano recently reprised a subject I wrote about 18 months ago: the benefits that flow to publishers that sell direct. In that piece, I highlighted the disagreement that seemed to exist at that time between my advocacy of direct selling of ebooks particularly and Random House’s lack of interest in doing so.

In the meantime, I’ve been working with Peter McCarthy, building a digital marketing business. Pete was the lead digital marketing strategist at Random House for six years ending shortly before I published the piece. Nano makes the point that only Random House among the former Big Six does not sell ebooks direct now (although Penguin, the other half of the supermerger, does).

But in the year I’ve been working with Pete, I’ve learned with more nuanced perspective where “owning the transaction” fits in the hierarchy of tools and opportunities for publishers to directly influence consumer behavior. It isn’t at the top. So I have a new-found respect for Random House’s reluctance to forge ahead with retailing (although they clearly have been pursuing a direct-to-consumer strategy for years) and a new-found understanding of many other things publishers can do to help themselves with direct-to-consumer book marketing without necessarily executing the final sale of the ebook.

Any publisher who has been awake for the past several years knows that they need to talk to consumers directly where consumers are and can be engaged. Search engine optimization, Facebook and Twitter (and Instagram and other digital venue) campaigns, and consumer databases were practically non-existent five years ago and are now universally-accepted components of the marketing toolkit.

At first blush, it seems like a no-brainer that if you are talking to the consumer, introducing them to a book and persuading them to buy it, then you ought to at least try to get the full margin on the sale by executing the final transaction (as well as, perhaps, learning even more by observing their behavior as they read). But, of course, there are myriad complications.

Selling ebooks with DRM at all costs money for the license, adds complications for the end consumer, and can’t be executed by anybody except Amazon for delivery to the Kindle.

Setting prices is devilishly difficult. Either you resign yourself to being more expensive than many of the retailers or you compete with them on price. That requires technology and complicates the relationship with the sources of most publishers’ sales. It also means the “additional margin” you’re aiming to capture might not be as much as you hoped.

Being a retailer requires customer service. That’s something publishers have no experience with. And the difficulty of delivering it escalates with DRM and with any kind of dynamic pricing policy.

It is not surprising that the first publishers to sell ebooks direct had both the characteristics of being “vertical”, working with the same audiences repeatedly, and of being willing — for whatever reason — to distribute ebooks without DRM, which makes them easily passed along to others without in any way reducing the access of the original purchaser. These publishers — like Osprey for military books and F+W Media for illustrated books on many discrete subjects and Baen and Tor in the sci-fi genre — were anticipating the opportunity that Nano points out HarperCollins is exploiting with Narnia: using content to attract consumers which would lead inevitably to some desire to purchase. And selling direct also enables those publishers to make special offers around pricing or bundling or loyalty that would be much more cumbersome, if not impossible, to execute in collaboration with the existing retail network.

The need to sell direct seems pretty obvious and pretty compelling and there are now a growing number of service providers who can make it possible for publishers to do this on the web and through apps. (We’ll have a number of them talking about that at Digital Book World.)

One thing I learned from Pete is that — at least for a time and maybe still — Random House, apparently uniquely, was able to gain very granular affiliate-code tracking from Amazon. (This was achieved, apparently, merely by requesting it.) An affiliate code is the mechanism that enables publishers (or any other third-party) to be paid a referral fee on sales executed from traffic they send to Amazon (or any other retailer which compensates affiliates for referrals) for a purchase. Publishers normally have one and only one for each retailer to use across all their referrals, so they get sales reporting and payments from each retailer that are consolidated across all their titles and all the campaigns they run for those titles.

That leaves them flying blind on one of the most important metrics in digital marketing: how their clicks convert. Publishers persuading consumers and sending the traffic as an affiliate to Amazon or B&N (or any other retailer) can only possibly know the total number of clicks that went through them to the retailer and the total number of copies of each book they are credited with selling. Painstaking matching could get them a conversion index for a title, but not broken down by campaign or referral source.

Because Random House didn’t have that blind spot, they were, first of all, aware that their conversion rate on clicks to Amazon was very high, much higher than they would expect to get themselves if they tried to encourage consumers to buy direct. So the capture of more margin per sale would be at the expense of losing many sales. But, in addition, the extra margin can get burned up pretty quickly with the costs of running a direct-sale operation. One that provides solid user experiences, customer service, and other now standard eCommerce practices anywhere near today’s customer expectation is expensive — more so when it isn’t your primary business. eCommerce is a huge distraction, especially when it is executed by the folks who are also your digital marketers! That, or additional head count (which further lowers margins), would constitute a publisher’s choices.

When Nano made the suggestion in his piece that publishers move their “direct sale” up in the hierarchy of what they offer the consumer, above Amazon and other retailers, he wasn’t reckoning that this would result in a predictable rise in “cart abandonment”, which would mean sales lost. Nor did he calculate a substantial increase in operating costs.

That granular knowledge also enabled Random House to measure the success of campaigns by the meaningful metric of “books sold” rather than the proxy of “clickthroughs created”. That data made it evident very quickly that the search terms and calls to action that drove the most clicks weren’t necessarily the ones that drove the most sales. And, in addition, Amazon likes it better, and is more likely to invoke their own marketing capabilities on your behalf, if you’re driving traffic for a book that converts.

And all of this leads me to a list of five things I’ve learned in the past year that are really essential for effective marketing by publishers in the digital age. And I think all of these things are more important than, and independent of, whether the publisher controls the transaction or doesn’t.

1. It is necessary to do research to create effectively-SEOd copy for each and every book. McCarthy works with about 125 listening and analytical tools that allow him to find where targeted audiences are on the web, when they’re there (he can tell you the optimum time to tweet or post) and what words they use, enabling optimized search and attracting the consumers with the right “intent” to learn more about books. At the very least, every book needs an hour or two of structured examination of its audiences employing a dozen or more of these tools. Publishers who have their editors or marketers create the book descriptions and other metadata without doing this research are missing a critical trick. (Full disclosure: the Logical Marketing Agency Pete and I have just launched is now selling the service of doing this work at a per-title price that any publisher can afford, and which we think might be a faster, better, and cheaper solution for many than burning their own staff time figuring it out.)

2. Optimizing an author presence also requires research, and the more famous an author is, the more complicated is the challenge of pointing readers to a particular book. We’ve done three big author-centric jobs in the early days of our agency: one helping a major publisher look at the online presence of a major multi-book author they want to woo away from a major house competitor and the others examining the online presences of celebrity authors with complex backgrounds and prior books as well. Author and celebrity networks contain all sorts of clues to how to expand the author’s base, by segmenting it and by finding other celebrities and brands that have a following with similar profiles.

3. Although this is a touchy subject at the time that we’re still living with the Snowden-NSA revelations, it is also essential for publishers to be building their database of consumers and and tracking their knowable attributes, preferably with companion “permission” to email them, but even without. Several years ago, we were made aware by an agent that the enormous email lists owned by Hay House of readers interested in “mind body spirit” books enabled them to out-market big houses in their vertical. What working with Pete has taught us is that starting only with an email address or a Twitter handle, one can learn a tremendous amount about most individuals. They don’t make much noise about it, but we know at least some big houses have databases of consumers that number in the millions. They know very little about many of them, but are able to learn more all the time. Someday, if not already, publishers will be bumping the attributes of a book they want to buy against their database of people they know they can touch to make acquisition decisions.

4. When publishers are proceeding with fully-optimized book metadata, author online presence, and as many proprietary connections as they can muster to deliver free or earned discovery, they will also find opportunities for paid campaigns that can buy them additional attention. But running these media campaigns properly is yet another new skill set that requires developing experience in people and technology to help them. The “media cost” of Facebook or Google advertising is relatively trivial (compared to what media cost in the pre-digital age), but the management of that spending requires expertise and close attention to optimize the messages and the targeting.

5. The opportunities that a digital marketing environment creates for increasing sales of backlist have, across the industry, hardly been explored. If publishers are failing to do the necessary research to deliver optimal metadata on new titles, most aren’t even thinking about it for their backlist. This is a complicated problem. You can’t spend the hour or two we consider minimal necessary research to position a new title across thousands of titles on a backlist on a regular basis. Both monitoring the outside world, news and the social graph, and keeping metadata optimized for changing circumstances are, as yet, problems without a lot of helpful tools (or start-up initiatives) to assist them with yet. But publishers have lived for years in a world where the biggest barrier to backlist sales was the lack of availability of books in stores. As sales made online now exceed sales in stores for many titles anyway, that’s no longer a barrier and a much more proactive everyday approach to selling backlist is called for. A proprietary direct-selling effort can be of only minimal value there until a publisher creates such a heavily-trafficked store that screen real estate can be an effective tool. So other solutions are called for and it is probably unnecessary to say that McCarthy and I are working on this challenge too.

We’ll be covering a number of these issues at next week’s Digital Book World. In addition to the session on “Building Direct Sales Relationships” — featuring Micah Bowers of Bluefire, Sameer Shariff of Impelsys, Doug Lessing of Firebrand and Marc Boutet of DeMarque, and moderated by Ted Hill — we’ll also have several sessions focused on backlist marketing, marketing to (and building) online reading communities, gathering and using consumer data to inform acquisitions and marketing, and how to make the most of all the various social media channels. 

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The truth is we do not yet know whether ebooks will work for anything except readerly books


In the 1990s, Mark Bide would always begin the “Publishing in the 21st Century” conferences we ran by reviewing the research we had done around some aspect of digital change in publishing with the admonition that book publishing was “many very different businesses.” By that, Mark meant that trade publishers (who sold primarily through bookstores) were quite different from college textbook publishers and schoolbook publishers and sci-tech publishers and database publishers (who did not, and shared different dissimilarities with each other).

All of them were in the “book” business because all of them put their publishing output into bound pages for packaging and sale. But, aside from that, the commonalities in business model were all within the segments of book publishing, not across them. And when we were running these conferences 15 or 20 years ago we wanted our attendees to understand that how digital change might affect trade books might be quite different than how it would affect textbooks or professional books.

This was a continuing lesson. When O’Reilly and Pearson established Safari as a subscription database of books for programmers, it was a successful commercial play that wouldn’t have worked for a publisher of mysteries or biographies. And, indeed, the principal disruption in the trade business over the past decade has been the reduction of retail shelf space, a factor which affects non-trade publishers very little.

It has been suspected in these quarters for quite some time that the trade business was, on its own, going to demonstrate that it is actually many different businesses. That fact may now be manifesting itself in visible ways.

Last week Nate Hoffelder of The Digital Reader pointed my eyeballs at a story from the UK about a very prominent gardening author who, at age 85, has decided to stop writing gardening books because he believes his audience now gets that information from the Web, not from books.

Dr. David Hessayon created the Experts series of gardening guides and has been delivering more and more of them for over five decades, distributed in the UK by a division of Random House. But his sales figures and his insight into digital change tell him that “the how-to-do-it book has lost its absolute supremacy. To write a bestseller now you need to choose something that you can’t look up on Google.”

Hoffelder offered his take on this.

Then, entirely coincidentally, came this very much related story in Monday’s New York Times. The Times focused on the efforts, of which there are many, to create something different than a straight “conversion” for an ebook, or simply moving what was on a page to a screen. The reporter spoke to some of publishing’s leading pioneers around that problem. The confusion, in the industry and in this piece, is that the pioneers aren’t tackling the same problem. Peter Brantley, a library-rooted digital pioneer identified for his role organizing the Books in Browsers conference, talks about the limitations of the printed book in constraining how stories can be told. I am skeptical about what productive results can come from pursuing that possible opportunity. My sentiments are much closer to what was expressed by Peter Meyers of Citia, who said “a lot of these solutions were born out of a programmer’s ability to do something rather than the reader’s enthusiasm for things they need. We pursued distractions and called them enhancements.”

(I worked with Pete Meyers on a project a few years ago and some useful videos resulted.)

That said, it is no surprise that the program from Citia is highly practical, breaking complex non-fiction books into “cards” representing the ideas inside the book. Inkling has used a similar approach to make ebooks from how-to books, including creating an online bookstore from which to sell them. (Inkling has also made the point that the “card” paradigm also makes the content more discoverable, by making the cards themselves searchable and discoverable.) The “how-to” ebookstore is definitely an idea on the right track, but it will take a while to build enough awareness and traffic to find out whether the ebooks will sell in sufficient numbers for people to make money.

The books Citia applies its thinking to — idea-oriented books like Kevin Kelly’s “What Technology Wants” — are quite different from the how-to crafts and photography and cooking books Inkling is featuring. And they’re miles from novels, maybe light years from the more inventive replacements for the print novel that Peter Brantley is thinking about.

The Times piece focuses on the fact that the attempts to “change” the digital version of the book from what the printed version was — with interactivity or social or visual elements — have universally failed commercially. This is true. The piece Nate Hoffelder was inspired to write poses a more useful query than whether publishers can invent new forms that will work commercially: “Is the Internet a Greater Threat to Publishers than Self-Pub eBooks?”

But neither gets to the extension of the point Mark Bide made repeatedly two decades ago. Now it is the trade book business which is showing it is many book businesses, a fact that is being revealed by the shift to digital. And publishers are increasingly realizing the truth of this and that they have to focus on that fact as they plan their futures.

Here’s the simple fact that none of these three articles say. We have proven beyond any reasonable doubt that digital versions of narrative immersive reading — which I define as books you read from page one to page last — if made reflowable will satisfy the vast majority of the book’s print audience. Some people have switched to devices and some haven’t. Some stubbornly prefer printed books. Some find reading on a phone too cramped or reading on a computer too confining. But almost everybody finds reading on an ereader to be quite satisfactory (even if they don’t find it preferable to print). And if the book reflows and you can pick your type size, the ways it could have been improved but wasn’t always (seamless note-taking ability, improved navigation, ability to share) don’t interfere with your personal reading enjoyment. So these books have “worked” commercially as ebooks, particularly since the cost of getting to a digital version is trivial.

However, the complementary fact is that we have not yet found a formula that works for any other kind of book. (And with all due respect to Philip Jones of The Bookseller, whose piece on this subject is much more “on point” than the other three, pointing as he does to what Pottermore has done and can do is hardly a prototype for a dedicated book publisher.) How-to books haven’t sold well as ebooks. Reference books haven’t sold well as ebooks. Cookbooks haven’t sold well as ebooks. If you dip in and out; if you rely on illustrations (which maybe should be videos); if your book is just filled with pretty pictures; then there is no formula for a digital version that has demonstrated mass commercial appeal. There have been successes, but they seem to be novelties (e.g. Touch Press) or on a much smaller scale than would warrant major publishers getting into this business (e.g. a small art press like MAPP Editions can claim success with 1,000 copies sold).

And even though companies like Inkling and Aptara and Aerbook are doing their best to make the process cheaper and easier, making an ebook of a complex book is going to cost more and take more creative bandwidth and, in some cases, entirely new skillsets from the publisher (and perhaps the author) than the conversion of a novel. A complementary challenge is how these books translate to online sales. Narrative fiction and non-fiction sells well online, whether in print or digital form (so, those “stubborn” print readers are still satisfied). It’s a heavier lift to sell print illustrated how-to, art, and reference books online.

What this means is that the digital future for narrative reading — fiction and non-fiction — is much clearer than it is for any other kind of book. Publishers of novels can apparently count on their sales shifting from print to digital and from in-store to online without losing a lot of readers. And with not much in the way of conversion costs, publishers of these books can proceed with their development with some confidence that the changes in publishing’s landscape and ecosystem won’t throw the calculations they are making for future profits on today’s acquisitions into a cocked hat.

But publishers of everything else have no basis for similar confidence.

No general publisher that I’m aware of has announced “we won’t do illustrated books anymore”. I have purely anecdotal evidence from people who once worked there and left that Random House — the one publisher I know that really tried to convert a lot of its illustrated content to ebooks over the past few years — is de-emphasizing illustrated book publishing. I have been given to understand that one of the leading art book publishers is now doing more straight text publishing, which is sensible if art books don’t port to digital.

As for Dr. Hessayon, I know what I’d suggest if he were my consulting client. With digital content about gardening that has been being created since 1958, the chances are very good that he has a database of information that could constitute a whole new resource for gardeners in the 21st century. Perhaps there is a publisher who can do something with that, but it is perhaps more likely that a producer of seeds or fertilizer or a garden center retailer would have just read an article on the Internet about “content marketing” and see Hessayon’s last half-century of work as a great jumping off point for a new offering for the next half-century. The good doctor is right that “books” are no longer the best commercial form for monetizing a lot of information, but that doesn’t mean the information isn’t valuable, if it is delivered in different sized chunks under a different commercial model.

It would certainly appear from his experience that he’s concluded that the publishers’ distribution network no longer fits his content and its presentation. Unfortunately for today’s publishing incumbents, there are other skills that are required to be a good book publisher which also may no longer have commercial relevance for that content. So the question for publishers is whether their skills and assets are right for whatever will be the new way to present this kind of content. The answer — except for long-form reading — is not self-evident.

But, of course, publishers of illustrated and other complex books have to keep trying to find a solution that works and the only way to do that is to keep creating new digital products out of their books. A panel of people who can help them do that effectively and efficiently — Pavan Arora of Aptara, Gus Gostyla of Inkling, Ron Martinez of Aerbook, and Bill Kasdorf of Apex Covantage — will discuss the topic “Crossing the Chasm: Finding Digital Solutions for Non-Narrative Content”, moderated by industry veteran David Wilk at Digital Book World on January 14.

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No, Mike Shatzkin did NOT say that publishing is spiraling down the drain


As part of the promotion of the Digital Book World conference, I do some interviewing with the very capable Jeremy Greenfield, the editor of their blog. And Jeremy takes our conversations and chops them up into short pieces around the themes of our show. Since the focus of Digital Book World is “how digital is changing publishing”, Amazon is a topic of great interest and one we try to address in an original and enlightening way.

In my interview with Jeremy, for which he published very brief but entirely accurate excerpts, I did say that publishers would face a real selling job with authors when Amazon’s share grows by another 25% from its current base or if Barnes & Noble closed. Neither of those things is likely to happen in the next few years. If and when the day comes that one of those things does happen, not all publishers would be entirely defenseless even with today’s arsenal of capabilities. And Jeremy’s piece closes with my suggestion that publishers can help themselves by doing “digital marketing at scale, which is audience-centric in its thinking.”

Despite how this is interpreted in some circles, it does not add up to publishing “spiraling down the drain”.

Amazon is already truly disruptive and it isn’t clear to anybody but those on the inside of Amazon exactly how disruptive. I’ve written earlier that we know nothing about the used book marketplace they host and foster, which we must assume cuts into sales, particularly of bestselling books which have many copies in circulation. A recent discussion on a mailing list I’m on revolved around what we don’t know about how many ebooks are being published. Why? Because Bowker, which issues ISBN numbers and therefore helps us count the titles going into the marketplace, doesn’t necessarily get to touch (and count) titles that stay entirely inside of Amazon and therefore only use the Amazon “ASIN” substitute for the ISBN. Other ebook retailers will handle titles without ISBN numbers, but only Amazon has a large enough market by itself to make a substantial number of self-publishers work with them alone.

And now we have the anomaly of sales reporting from the AAP, once again working without totally internal Amazon IP, that suggests ebook sales are going down. Are they going down? Or are self-published titles exclusively inside Amazon taking share away from the part of the business we can see and count for ourselves and masking the ebook sales growth that is actually taking place? I have no evidence, but that strikes me as a more likely reality than that ebook sales have actually fallen year-to-year recently.

What that means is that we are developing two publishing businesses. One of them includes all of us: all the publishers, all the retailers, all the industry bodies counting books and sales. And one of them is “private” or “proprietary”; it is Amazon. They are publishing an unknown number of titles selling an unknown number of copies netting an unknown number of dollars under a numbering system nobody else can crack or track.

Actually, Amazon is not entirely alone in wanting proprietary titles. Perhaps there are some within Nook or Kobo, but hosting proprietary titles to establish themselves in the market is the declared strategy of upstart retailer Zola Books. Last week they announced exclusive titles from Joan Didion and her late husband, John Gregory Dunne. They think having showcase titles of this kind will enable them to crack the ranks of established ebook retailers. I think it would take a lot more of them than they’ll ever get to make a dent, but time will tell. And if they don’t sell a lot of the ones they have, it will become impossible to persuade anybody else to give them such an exclusive on any basis.

But Amazon, being more than half the market already for a lot of genre fiction, can use painless (to them) financial incentives to induce authors to give them exclusives through the KDP Select program. So they get them in numbers none of the rest of us can count but which could conceivably be large enough to actually make industry figures inaccurate.

My assumption is that Amazon can do more for a book inside Amazon than a publisher or author can working Amazon from the outside, all other things being equal (although the U-turn from the ambitious Larry Kirshbaum publishing program might cast doubt on that). And the publisher takes a big share of the Amazon-generated revenue. That means that the publishers have to make up the difference in revenue for the author in one or both of two ways:

They have to do a superior job publishing the book — editing, positioning it in the marketplace, selling rights, and sustaining a marketing effort that will be largely digital — so that it sells more even inside Amazon than it would without those efforts. In other words, they have to assure that “all other things” do not remain equal.

They have to sell lots of books outside of Amazon so that the revenue from the larger publishing ecosystem makes up for the Amazon-generated revenue that the author shares with the publisher.

The shift that has taken place so far is apparently not crippling publishers at all. There are no clear tallies about this, but it certainly feels like there are more authors moving from self-publishing to a publishing house (to borrow a term that usually has a different meaning in our business: “discovered” by publishers because of their self-publishing success) than the other way. So either they’re able to make more money, or they really appreciate the full bundle of editing and marketing services a publisher provides, or they value the broader exposure through a publisher’s entire distribution network more than the perhaps-higher revenue they could make from fewer sales through Amazon alone, or some combination of the three.

My point, and what should be a broad industry concern, is that the publisher’s challenge continues to get steeper. Amazon’s share is growing in relation to the rest of the market and more and more service offerings for editing and marketing are making it ever-easier for authors to entertain a non-publisher option. There is a very small but growing population of authors with lengthy backlists who have gotten their rights back, or secured their ebook rights alone, and are able to consider alternative paths to market.

Although she wasn’t the first, Jane Friedman saw this very early — and it is the opportunity that got things started for her Open Road Integrated Media, probably the largest new publisher built during our current shifting paradigm. Richard Curtis of E-Reads and Arthur Klebanoff of Rosetta were pursuing a similar strategy before Friedman got started, but she found the funding and added the promotional sizzle to build a bigger business faster. (It is still an open question whether the companies that are building themselves by offering more generous royalty splits for already-established backlist have a sustainable business model.)

We’ve said repeatedly in this space that the publisher’s time-honored core proposition has been “we put books on shelves”. That is changing and the new proposition has to be “we will help authors reach their whole audience”. A very smart executive from a major house suggested another formulation that makes sense: “publishers are experts at building author brands.”

Either of those, as a competitive statement against Amazon, will almost certainly reflect a potential advantage for authors. But as the difference between what is Amazon’s audience and what is the whole audience gets smaller, the publishers’ challenge gets harder. And only by doing a smashing job at both publishing in a way that sells more on Amazon and by maximizing the market outside Amazon will publishers retain their power to attract authors in the years to come.

The answers for publishers as seen from here are “verticality”, or “audience-centricity”, combined with scaled skills (and tools) to do digital marketing in ways the authors can’t on their own and which Amazon isn’t likely to develop. The two go together: focusing on an audience enables a publisher to build scaled capabilities to reach that audience that others without that focus will not have.

There have always been publishers that have gone “down the drain” or, more likely, seen themselves become part of some other publisher rather than a stand-alone entity. We will certainly see consolidation in various segments of the industry at the same time that we will see lots of new smaller entrants attracted by book publishing’s diminishing cost of entry. (We call this atomization.) But seeing that things will get harder is not the same as seeing a pending apocalypse, and recognizing there are benchmarks that would signal a real escalation of the challenge is not the same as saying we’re about to hit them.

The topics covered in this post will get a thorough airing at the Digital Book World conference on January 14-15, 2014. (Here’s the full program.) Our Amazon coverage will include presentations from Brad Stone, Benedict Evans, and Joe Esposito, followed by a panel discussion among them. Professor Dana Beth Weinberg combines her data analysis skills as a sociologist with her publishing interest and knowledge as a romance writer to present a unique perspective on the changing dynamic between publishers and authors. And Phil Sexton, the publisher of Writer’s Digest, will present the results of his organization’s survey of more than 5,000 freelance writers, capturing an up-to-date picture of how writers view the choice between working with a publisher and putting their material out on their own.

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Book marketers need to rethink three things: time, timing, and budgeting


The three big shifts taking place in trade book publishing are very much interrelated. The fact that consumers are buying about half their books online is one. That means that publishers are not entirely dependent on books being placed at retail to make sales, which is the second. And the marketing that used to take place around store inventory is becoming digital, which is the third.

And that trinity of changes is leading to another trinity of changes inside the publishing houses as publishers find that the old rules don’t apply around what used to be three pretty-much-constants: time, timing, and budgeting.

“Time” means “time on the clock” or staff time: the hours of staff effort that marketing management has to work with. It used to be that the creative outputs required of marketers and publicists were reasonably predictable and static: jacket, title information, and press release copy and thoroughly-planned campaigns for certain books around their publication date. The marketers weren’t intended to engage intensively in interaction with media or consumers. Now, Facebook and Twitter and LinkedIn campaigns, whether they are attempting to connect through earned or paid connections, require interaction and monitoring. Staff time can be absorbed in specific campaigns. This is a management (and accounting) challenge publishers didn’t face before.

“Timing” means “time on the calendar”, or the publishers’ decisions about when it makes sense to put forth marketing effort on behalf of a book. Until very recently, publishers were justified (and often comforted) in their belief that no overt or costly marketing efforts made any sense unless inventory was on sale in bookstores. Part of the reason for the publication date-intensive marketing approach publishers have always taken is that with each day that passes after pub date, publishers have less confidence that books are available at retail locations. They reckoned, based on firm experience, that books not ubiquitously available wouldn’t sell much no matter what efforts were made to acquaint the public with the book. But with half the sales being made online (and a far higher percentage of the potential customers certainly willing to buy some of their books that way), availability in stores is no longer a sine qua non for promoting. That means that opportunities that would not have required or benefited from promotional effort in years past will now.

And that leads to the new challenges of “budgeting” for marketing efforts. Historically, publishers created a marketing budget for those books lucky enough to have one in advance of publication and spent just about all of it within weeks of the book’s release. Significant efforts just didn’t take place on any other books. That is also no longer an effective way to operate. Today’s marketers need funds (and time) available for online marketing campaigns, both coop within online retailers and more ambitious web and social network efforts, to take advantage of unpredicted newsbreaks or trends and to do seasonal or occasion-based promotions that would have, in years passed, required long planning and lead times to get inventory in place but today can be much more spontaneous.

It is also worth noting that the longstanding concepts of timing and budgeting can also be thrown into a cocked hat, but in a good way. Some digital marketing efforts will simply produce a positive ROI: the more you do it, the more money you make. Nothing lasts forever, but that can be true in a very open-ended way. When a publisher finds something like that, would their current procedures around timing and budgeting tell them to turn it off, even while it is working and producing positive margin? I’m afraid in many houses, that’s exactly what would happen.

This creates a lot of complications from the perspective of the big houses driven, as they are and must be, by signing up and then succeeding with the Big Books. The reality, which might be seen as a “dirty little secret”, has been that big books have driven their marketing efforts. Big books have provided the leverage with the stores, of course. The big house sales reps are the deliverers and deal-makers for the books which have historically driven the traffic into the stores, and that has given them the attention and leverage to get distribution across their houses’ list. Indeed, the major book review media were also responsive to the same high-profile books, which gave a house’s publicity department the same kind of bandwidth to push lower-profile titles.

If money were going to be spent, on coop for placement in stores or for ads in media, it was likely to be for the big books as well. So it was actually true that a house having major titles in its catalog used the access those titles created to generate visibility and distribution for many other titles the house published.

And the economics of big book marketing were also different, although it is not clear how much this has been taken into account. Because books that publishers and agents know will be big in advance tend to have advances calculated to be too high to earn out, a publisher can figure that all the sales margin on those titles creates a margin contribution to the publisher; the royalty is, in effect, already paid. But that’s not true further down the list, particularly on backlist, where each incremental sale can trigger an incremental royalty payment. That can confuse an ROI calculation and would tend to discourage a publisher from freely allocating money to promote backlist.

Besides the challenges around time, timing, and budgeting, publishers have a lot to change in the way they do their marketing. We’ve advocated for years that publishers look at marketing as an investment, building assets, such as email lists of consumers they can reach for free, through their marketing efforts for subsequent use. That works better if the house’s marketing efforts are vertical, or audience-centric, which enables repeat efforts to the same people to bear fruit.

Publishers are going to need new skills and new tools to be effective marketers but, even more fundamental, they have to break the mold that has placed the lion’s share of marketing effort and spend behind a small number of books in just a few short weeks around publication date.

Long before publishers become so marketing-driven that the marketers become leaders in helping to pick the books to be acquired, which we expect will happen eventually, there will need to be a complete re-think around marketing: how it is staffed, how and when campaigns should be triggered and stopped, and how both the house and the marketers themselves manage the spending to push books. Almost every marketing expert coming into big publishing from outside sees the ratio of marketers to sales personnel as wildly out of line, with far too few marketers in relation to the number of sales people. That’s because sales used to be marketing; with every bookstore that closes, that becomes less true.

Time, timing, and budgeting for marketing. Every publisher needs to be examining and changing the way they think about all three.

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No-inventory publishing changes everything for everybody and nobody will escape making adjustments


A somewhat overwrought article in Wired calling ebooks an “abomination” because they “price people out of reading” provokes thinking about how much the business models for the trade book business are changing. The article’s weakness stems from its focus on the pricing decisions publishers are making in selling print and ebooks to libraries when those changes are taking place in a larger and indivisible context. The industry is finding less and less uniting what it has been for the past 70 years, since the end of World War II and the advent of paperbacks, and what it will be in a future that is already being disruptive but not necessarily clear.

This is reflected on a micro level in a discussion that arose at our Marketing Conference last week from a question asking “what is a book”? That question used to have a physical answer which described an object, not necessarily describing what content it contained. We’re getting away pretty fast from requiring a book to be printed and bound; the words of an author feel no less real or worthy to many of us coming from a screen. Screen delivery is also relieving the need for a book to have any minimum length, which printed books transacted individually require for physical (we want them thick enough to bind with a spine) and commercial (selling and tracking an individual item practically requires a minimum price) reasons.

I think the questioner in this case was also trying to pull us into a disussion of video, audio, interaction, and linking, which I resist for two reasons. One is that, so far, the preponderence of ebooks that have sold any appreciable quantities have not had any of those attributes. They’re just the same words as in the printed books made reflowable for a screen. The second is that my world is the world of book publishing. My belief is that if books were to become something heavily dependent on video and audio, they won’t be made by people who today are book publishers. They’ll be made by movie studios and animation houses and digital game creators. In that case, discussion of them belongs on some other blog.

Restricting one’s thinking to assume that the future of books encompass only digital versions of what has existed as a book for the past several hundred years doesn’t, by itself, make the future clear. The changes in business models and in the configuration of the industry provide plenty of potential variation that, from my perspective, is more useful (and more fun) to think about than trying to redefine the book itself.

One of the things that has characterized books for me is the incredible diversity of markets they reach. Trade publishing has always had remarkably low barriers to entry compared to other media. It has always been easier to publish a book and make it work on some level than to launch a newspaper or a magazine, or make a movie or a TV show or a record. It costs less and the distribution channels have always been relatively democratic and accessible to outsiders. The cash comes back slowly, and profits are often elusive, but you don’t need a fortune to publish a book.

Because books inherently require a small number of sales to make money (the breakeven point gets raised by big advances to authors, but, if the author guarantee is low, most books will recover core production costs on the sale of a few thousand copies and, in some cases, less than that), they frequently target what any other industry would consider mini-markets. A publisher that mines a niche can profit on something incredibly esoteric. For example, the chances are that Osprey, a military history publisher, has made money on books about wars you’ve never heard of. But their audience has and, because they know their audience, everybody wins.

The giant general trade publishers have built big and expensive machines that can make a book a mass sensation and put it in front of the public in a big way. Other publishers have pursued other models. HarperCollins or Simon & Schuster might pay big money to an author and build an organization that can maximize marketing impact on pub date. Other companies have specialized in a market like craft books or art books or computer books, not paying the same advances and necessarily having a different emphasis in their distribution and marketing strategies.

But what has united all the business models was the commitment to make and market a book, which meant printing inventory. The minimum investment to publish a book was much less than the minimum investment to publish a magazine or a newspaper or to make a film or a record. But there still was an investment.

And that brings us back to something that made books special for their authors: the prestige conferred by somebody (preferably somebody highly professional with a brand name like some publishers have) making a unique investment in their content. That’s an investment that’s not sold as part of a magazine, or on the back of a star’s name, but in one person’s work: the author’s. When the subject of what a book was came up at our conference, one observation from a publisher of books about public affairs was how much the speaking fees of their authors went up when a book of theirs was published. The mere fact of the book conferred credibility on the author that raised their value in the marketplace, regardless of how the book sold. (Or didn’t.)

This is something inherent to the definition of a “book”. This is, also, likely to change.

The core change in publishing economics that will ultimately change the shape of the commercial industry is that the already-low investment required to publish a book has plummeted even further. As printed books become less important, then the investment required to fund them becomes less important too. Already we have seen many authors — I’ve written about John Locke and hosted Hugh Howey on the Digital Book World stage, but there are scores of others — build a career as an author without any significant print sales. We have seen other authors with long backlists, some who had only achieved modest success for publishers, turning the opportunity for higher margins and direct audience contact into financial bonanzas in digital publishing.

Repeated demonstration of the fact that it is totally possible to achieve fame and fortune as a writer without a publisher does not escape the attention of any author. Many literary agencies, the players closest to the hopes and aspirations of narrative text book authors, have been gearing up to provide digital services, primarily at first for established authors who want to self-publish their backlists. But by doing this they also create leverage for their authors in their negotiations for bigger advances and better terms from publishers, and they stamp themselves as able to continue to serve an author who decides publishers are no longer for him or her.

That means that publishers, who would theoretically always have been interested in maximizing a book’s revenue for the author and themselves, are goaded more than ever to do so. That in turn means every aspect of the business model gets questioned. Are library ebooks cannibalizing the sales of ebooks from stores? Might they? The question has to be asked. Does the fact that ebooks don’t wear out with repeated lending, as printed books do, require some different policy to make a library pony up again for frequently-loaned book? (HarperCollins has introduced such a policy.) Should a library that uses its copy of an ebook to satisfy many readers pay more than an ebook reader who has practical (and contractual) barriers to sharing? (Random House is trying this.) While some authors are asking themselves whether publishers are essential for them anymore, which makes sense, doesn’t it also make sense for publishers to be thinking hard about how the digital revolution might change their relationship with libraries?

In fact, nobody in the value chain in between the author and the reader of a book can be complacent about their position: not the agent or publisher or library, but also, quite obviously, not the bookstore, online or physical. The printer and warehouse operator must expect a shrinking share of the book business. No-inventory publishing, by lowering the barriers to entry for a written book of narrative text nearly to zero, is assuring that an ecosystem built around the reality that book inventory was the industry’s greatest cost will change profoundly.

The assertion that ebooks are making books less affordable to most people is total hogwash. For every book not available to be lent as an ebook by a library, there are probably ten from established publishers that are half the price they were before, to the consumer and to the library. And there are countless others which would not have been published before available directly from authors, which their sales tell us are valued by many readers, that are dirt cheap, priced less than the commercial transaction system for print could even consider. And the books the author of the complaining article wrote about that come with higher prices or some sort of other licensing restrictions as ebooks, are still (at least for now) still available in print at the long-traditional prices and terms.

We’re going to see marketing departments of publishers expand and sales departments contract as book distribution patterns change. We’re going to see more and more commercially viable titles launched with a no- or little-inventory-in-place model, starting with ebooks and print-on-demand availability as a low-risk launch strategy. We’re going to see books launched as serials, growing to a length determined by audience response, not based on a pre-publication plan. We’re going to see booksellers and libraries publishing and publishers building on book audiences to sell other things. And we’re going to see more and more virtual sources of books for consumers: publishers selling direct, of course, but also did you notice that Tesco is now in the game?

We’re going to see a lot of change as players of all sizes, in all parts of the publishing value chain, adjust to the “weightlessness” of a business shedding and shifting its biggest capital requirement: inventory cost. Picking on one tactic or another by one player or another, particularly from the perspective of preserving legacy behavior, is not likely to be very illuminating or helpful. The ability to put a book into the marketplace in a way that can reach more than half its audience with no inventory investment, making it possible to sell books and rights globally and only later, if it is warranted, put a bigger bet down on the book — combined with the increasing number of entities that have knowledge that could inform content and direct contact with a real market — is going to be transformative. Everybody in the chain but the author and the reader are fighting for their lives.

Smart publishers recognize that they have to completely rethink their business models and propositions in a no-inventory publishing world. Authors and agents are doing the same thing. So are many bookstores and libraries. The players in the publishing ecosystem who don’t rethink their business practices in fundamental ways will probably be relieved of the burden of thinking about them at all before long.

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We got lucky with the speakers we booked for Publishers Launch Frankfurt


Branch Rickey, the fabled baseball executive who gave us racial integration, farm systems, and a host of great teams over fifty years, used to say “luck is the residue of design”. I’d like to think he was right, because we have really been lucky with our Frankfurt show for Publishers Launch, which we present in partnership with the Frankfurt Academy.

The first little lucky break was that we booked Charlie Redmayne to speak when he was CEO of Pottermore. Then earlier this summer he moved back to HarperCollins to become their UK CEO. And now his appearance at Publishers Launch Frankfurt will be his first public address since making the switch from the biggest author online play to running the UK operations for one of the industry giants.

We’d also had the idea that there were big online communities of readers that publishers could increasingly use for marketing. GoodReads had started out with the intention of being a gathering place to discuss books, but Wattpad and Scribd did not. Wattpad was a place for writers to expose their work and get critiqued by other writers; Scribd was a YouTube for documents, a place to put and find all manner of word-and-picture content online. But over time, both grew (as did GoodReads) to become large communities of word-interested people, perfect for book promotion. And when we booked them all a few months ago, both Wattpad and Scribd were well aware of the opportunity they afforded publishers.

But good luck has intervened in all three cases. GoodReads got bought by Amazon, validating (and complicating) their position as a leading gathering place for book readers. Wattpad has done a few promotional tie-ups, but a deal they did with the innovative publisher Sourcebooks that includes a line of co-published YA books and ebooks got a lot of attention. And Scribd just last week announced a new ebook subscription service, with the opening coup of landing a large number of backlist titles from HarperCollins catching everybody’s attention.

Needless to say, all three of their leaders — Otis Chandler of GoodReads, Allen Lau of Wattpad, and Trip Adler of Scribd — will have a bit more to tell our audience than we had bargained on.

We signed up Jonathan Nowell, the CEO of Nielsen Book, to talk to us about markets in transition. Nielsen has a view through both book metadata and book sales data of how markets are behaving in many countries; we wanted Jonathan to give us some clues about where we might see what has happened in the US and UK in a non-English marketplace. In the meantime, Jonathan’s company made a little fresh news too, buying the business intelligence units from Bowker in the US.

Of course, there’s a lot more at the show next Tuesday in Frankfurt. We’ll have Ken Brooks (now SVP for Global Supply Chain at McGraw-Hill) talking about how publishers should use data. We’ll have Russ Grandinetti of Amazon speaking about their view of markets in transition. Marcus Leaver of Quarto and Rebecca Smart of Osprey, two CEOs of extremely innovative global companies that are not Big Five sized, will talk about how they use being nimble and audience-focused to succeed. Micah Bowers, the CEO of Bluefire, will talk about what a DRM-free world would really be like. And Octavio Kulesz, an Argentine publisher/researcher who studies book markets in the developing world, will give us some insight into development that is quite different from what we’ve experienced in rich countries.

And we’re delighted to be hosting a panel of German publishing players about the transition in that market, which might become the first outside the English-speaking world to show real signs of disruption. It appears that this topic hasn’t even gotten as much discussion in Germany as we think it should; we’re delighted to be hosting a conversation that should be of great local interest far from where we live.

Our Frankfurt conference runs next Tuesday from 8 to 2, ending early to allow our attendees to make other meetings on what is always a busy book fair schedule.

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Losing bookstores is a much bigger problem for publishers than it is for readers


Start with this. You’re kidding yourself if you’re a book publisher who believes the digital revolution has slowed down, that independent bookstores will thrive in the new environment, that ebooks — if not a fad — have reached their growth limits, and that something resembling the book business we’ve known for the past 100 years will survive for another 100 years. Or even for another 20. It might even be breaking down in five or 10.

The obsession with the false dichotomy between printed books and digital ones is beginning to give way to attention for the more important shift taking place between purchasing books online and purchasing books in stores. It has been my concern for years — first elaborated on at length in the “End of General Trade Publishing Houses” speech I gave at BEA in 2007 — that the publishing industry that grew up around 50 years of expanding retail shelf space for books would be seriously challenged by its 10-years-on and continuing diminution. It will not be a happy time, frankly, seeing that prediction being proved correct, and it hasn’t been proven correct yet. But the circumstances that will test the proposition are rapidly being put into place.

The motivation to discuss this subject came from the convergence of a few recent stimuli. One was Bowker’s research, reported by DBW, suggesting that about half of US book sales were now taking place online.

That confirmed that the US market was in approximately the same place that Hachette UK had reported itself to be in the past few weeks.

Next was the hopeful thinking that printed books were holding their own and, anyway, all that was required for publishers to live without bookstores was some pluck and imagination, all capped by a piece in The Times making some perfectly valid points about how much easier it is to remember what you’re reading with print than it is with ebooks.

My two-part hypothesis, from the beginning, has been pretty simple. Online book buying — whether print or digital — takes business away from bookstores. So bookstores close or reduce shelf space. That decreases both their attraction and their convenience, which makes online buying increase even more. So bookstores close or reduce shelf space further. (This is called a “vicious cycle”.) That’s part one.

Part two is about publishers, particularly the big general trade publishers (Big Five plus a few others) but all of them, really, who depend on bookstores for their value. Publishers perform the service for authors of getting their books in front of readers. That has primarily meant, for about 100 years, “we put books on shelves”. My concern was that, without shelves, publishers had diminished value to authors.

The fact that part one is nearing a conclusion was confirmed in Monday’s Times with a front-page story about bookstores turning to charity to stay afloat. If anybody believes this is a sustainable strategy, I’d like to hear the explanation. This is a “Hail Mary” pass and the fact that some bookstores cited in the piece have managed to score a touchdown doesn’t mean the bookstore team is winning this game.

I have to emphasize here — to reduce the future flow of indignant comments — that the continuing decline of bookstores is not something that makes me happy. My first job in publishing, 51 years ago, was in a bookstore. My dad’s career was made on his understanding of the importance of bookstores to publishers and figuring out ways to create more mutually profitable ways for publishers and bookstores to interact. But if about half the sales of books today are being made online (which is probably five times or more the percentage it was less than a decade ago), you’d have to be able to predict a sudden reversal, or at least a cessation, of the trend to see a positive future for bookstores.

I never believed the trend would stop or reverse because I don’t see any end to the “vicious cycle” described above. But my friend, Joe Esposito, has been even more thorough and cogent in explaining why it won’t end. As Joe articulates it, at least part of the print versus digital choice for some consumers is based on price and convenience. As long as stores constitute an important tool for “discovery” — finding new things to read — it will be more convenient for most people to walk out of the store with the discovered book than to purchase it any other way or in any other form.

As bookstores become less powerful discovery engines (fewer of them farther apart and fewer books on display in those that are left), people are forced to find out about books some other way. Many of those other ways are already online (without even counting the suggestions of online retailers). A lot of “word-of-mouth” these days is digital communication (email, Facebook, Twitter, or even a blog).

Since the beginning of the year, it has been frequently observed that ebook sales are not rising very quickly anymore at all. Nicholas Carr just wrote about it again, citing his post from the beginning of the year. (If you care about how the Internet and ebooks might affect our brains and thinking ability, read Carr’s book, “The Shallows”. There’s some digitally-delivered word-of-mouth. I told you it could happen on a blog!) Certainly, part of the slowdown is rooted in the shift from dedicated ereaders like Kindles and Nooks to tablet computers. Books aren’t the only game in town anymore; in fact, they’re competing with real games and videos and music and email and the whole damn Internet on the devices people might read ebooks on these days. And, at the same time, the later device-acquirers are also lighter readers to begin with. Heavy readers had more financial incentive to switch from the beginning.

But, in fact, is ebook sales growth slowing? Maybe not. It depends on how you look at it. Author Nathan Bransford, who probably has as much to contribute to publishing houses with cool analysis as he does with content, did an excellent post a couple of months ago demonstrating that the smaller percentage increases don’t indicate a decline at all. In fact, Bransford does the math (and the graph) to show that ebook sales continue to rise, at pretty much the same pace they have been, in real unit terms. And this is despite the fact that self-published ebooks, which were credited with 12% of the market a very short time ago are not counted in these numbers!

So it is actually a myth based on a misunderstanding of how percentage increases are affected by a change in the base on which they’re calculated to claim that the ebook switchover is slowing down.

Esposito’s post cited above was making the case that it is publishers that have much to fear from the decline of bookstores because it robs them of their prime value to authors. That is a point we’ve made often in this space. But some of those objecting to his point of view did so by making the case that many books don’t “port” to digital very successfully. Certainly we have seen very few successes with digital illustrated books of any kind.

In fact, there was false hope created that the children’s book market — which is largely illustrated — was going digital about 18 months ago. It turns out that, really, this was a misreading of reality. What made it appear that way was the massive sales of “The Hunger Games” which, although categorized as young adult reading (so tallied that way; thank you, metadata) is actually straight narrative reading that was not just read by kids but also by many adults.

Yes, it is absolutely true that ebooks haven’t “worked” (commercially) yet for anything except narrative reading, books that you start on page 1 and read to the end. We are where we were when I wrote in my first post of 2012 that the problem hadn’t been solved yet  and then worried out loud a few months later (more than a year ago) that this was an existential problem for illustrated book publishers.

So objecting to Esposito’s argument by pointing out that some books don’t work as ebooks is a non sequitor. Bookstores can’t continue to exist because there are some books being published that don’t work as ebooks; that’s even less of a sustaining proposition than asking for shekels in a digital tin cup.

Logic and facts tell us some immutable things. They can be ignored or papered over with wishful thinking, but anybody with a commercial interest in the book publishing value chain is probably making a big mistake rationalizing them away rather than confronting them.

1. Narrative books, those read from beginning to end, are being increasingly read in digital form.

2. Both because of that, and for several other reasons (bookstores being less ubiquitous and stocking fewer books, a wider range of actual choices making the odds of a bookstore having what you want even lower, and a general propensity for all consumers to shop online more for all things), online purchasing of books is still taking share away from brick stores.

3. Books that are not narrative books don’t have the same natural opportunity to have their sales migrate either to ebooks (because the format doesn’t work as well for them) or online (because they often have to be seen and touched to be purchased).

4. The single biggest reason (aside from a fat advance payment, which few get) for authors to work through a publisher is to get the distribution of printed copies to many stores.

5. As the number of books grows that have commercial appeal but which are published so far outside the conventional trade that their sales aren’t even captured in industry data, it further weakens the legacy publishing ecosystem and further encourages both established and aspiring authors to work around it. Aspiring authors every week see books on the NY Times Bestseller List that are either self-published or have imprint names they’ve never heard of. When conventional publishing requires an agent to get a deal (which it does, and which takes time), then you have to wait for publishers to make a buy-or-not decision (more time), and then put your book out on a trade publishing schedule that usually wants to give Barnes & Noble and other retailers months of advance notice (still more time), it can seem ever-so-much-more appealing to just skip the wait and go straight to self-publishing, which will put books on sale right now (more or less).

6. What you will need to do as a publisher to survive longer in this increasingly hostile environment depends on what you publish.

* If you do straight narrative reading, your books may continue to sell in equivalent or even better numbers than they did previously, but both your authors and your retailers will be looking hard at what you take and wondering if they can go around you. Your challenge will be to continue adding enough value to be worth enough of a share to have a business. How? Digital marketing at scale is your best bet.

* If you publish children’s books, you have a launching pad to get into the world of licensed products and video (which some are doing), which promises a rosier future but brings with it a slew of powerful new competitors.

* And if you publish anything else (art books, instructional books of any kind, travel books), you’re looking for a new business model. We’re believers that being vertical makes the most sense (don’t publish all over the lot; stick to audiences you can know and grow). But “being vertical” is not in and of itself an adequate strategy. Professional publishers have had an edge here; professional needs can be satisfied with content and services that aren’t delivered as books, and, in general, the relevant publishers have responded sensibly to that.

The challenges to publishers in the US are only just being felt in markets outside the English language. But ultimately, they’ll be felt everywhere. That sums up the perspective of our Publishers Launch Frankfurt Conference, which will take place on October 8. We’ll be looking at markets in transition, getting views from Amazon and Nielsen about which markets are showing signs of a digitally “tipping”, as well as a scan of the developing world from Octavio Kulesz. We have a great panel of industry leaders from Germany to discuss whether that market is about to look like an English-speaking one, with diminishing bookstores, scrambling publishers, and increasing numbers of do-it-yourself authors. We’ll hear from Goodreads, Wattpad, and Scribd about how international their large communities of reading-centric people are. We’ll have presentations about Big Data from Ken Brooks and DRM from Micah Bowers that I promise won’t repeat things you’ve heard anywhere else. And some very sharp CEOs — Charlie Redmayne of HarperCollins UK, Rebecca Smart of Osprey, and Marcus Leaver of Quarto — will be on the program as well. Michael Cader and I will try to cover the subjects that are hardest to talk about, including the growth of Amazon and the power of the new Penguin Random House.  If you’re in the neighborhood on October 8, this will be a show not to be missed.

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7 starter principles for digital book marketing learned from Peter McCarthy


Times are changing in publishing and publishers know it. Almost every publisher recognizes that their value to authors, and therefore their future, is dependent on their ability to deliver effective marketing at scale. In this day and age, that means digital marketing, which also has the characteristic of being “data-driven” marketing. And not only is that a science that is really less than 10 years old, it is changing all the time. Ten years ago many of the most important components of digital marketing for books today — Twitter, Facebook, Goodreads — barely existed or hadn’t been born yet. They certainly didn’t matter.

Publishers can’t address their digital marketing challenge by simply spending more because the choices in digital marketing are endless. They have to be smart about what they do. Which means they have to be smart about something for which there is little established wisdom and no deep experience inside of publishing houses.

For a large part of the past year, I have been learning about digital marketing for books from the man whom I will regard as The Master until the day comes when I meet somebody who knows more. He’s Peter McCarthy. Pete started his career with nearly 3 years at The Reader’s Catalog, New York Review of Books, and the Granta family of publications. Reader’s Catalog formed part of the backbone of Bn.com 1.0. Then Pete spent six years at Penguin in the early digital days helping them build a DAM system and put out ebooks for the first time, followed by six years at Random House pioneering their digital marketing efforts.

Pete has made the point repeatedly that much of what he knows, does, and is teaching me is already well understood in the modern world of branding and marketing. The distinctions among psychographics, demographics, and behavior, and their importance in marketing, were new to me but are familiar stuff to people who sell Pepsi or Toyotas. Pete’s really invented something in publishing by looking for comparable products that aren’t other books, but outside publishing they know all about seeking comps that aren’t precisely the same as their own product. The techniques Pete employs to find audiences in people that are like the known audiences for a book are standard tools in consumer marketing outside publishing.

But that doesn’t mean publishers can just hire big digital agencies to help them. It won’t work. Because while publishing can use techniques that sophisticated marketers are using to sell other products in other places, the truly more complex world of books will be hard for them to cope with. And marketing budgets for a title that are rarely five figures, often three figures, and sometimes less than that don’t fit the best agencies’ idea of “workable”, either.

The big agencies would actually have no clue how to deal with thousands of highly differentiated products at the same time, which have some interconnectedness to them (because they’re all books, so Amazon author pages have to be optimized for all of them, for example) but mostly are unrelated. And not knowing that causes lost value two ways:

1. They don’t have techniques to apply mass optimization across hundreds or thousands of highly differentiated “products”, because the work they do doesn’t require it;

2. They don’t have the capacity big publishers need to run hundreds (or maybe even thousands) of campaigns at one time with realtime “budgets” (or “go, no-go” gauges).

So the big agencies wouldn’t know how to deal with a publishing house. The granularity would frustrate them and they’d freight each ISBN (publishing speak for “SKU”) with too much overhead.

That has left most publishers on their own, with service providers delivering some by-title assistance (you can hire somebody to do an author’s tweeting for them), but with the publishers themselves left to sort out how to make maximum use of a book or author’s digital footprint and social media presence to drive sales. And it is not really surprising that Pete McCarthy, having had the opportunity to meet the marketing challenge across thousands of titles and authors and hundreds of genres, topics, and imprints, would have figured out a lot of things that elude the publishers who aren’t digital marketing sophisticates and the digital marketing experts who rarely, if ever, encounter the granularity and product diversity that characterizes book publishing.

I’ve learned a lot from Pete, but I’ll never catch up to him and I won’t even try. He uses more than 100 different digital tools to help him understand followers in various social platforms and who they are. He is using a marketer’s understanding of each individual’s demographics, psychographics, and behavior (and behavior’s subset, intent), to define the groups of people he sees clustering. That, in turn, helps him find groups of people who are similar to the ones who already like the author or the book.

Pete has articulated many principles which make a lot of sense, even to somebody who didn’t know about demographics and psychographics and who has not worked his way through even a handful of “listening” tools, let alone a hundred or more.

1. The digital marketing menu contains nearly an infinite number of items. That results in a tremendous amount of wasted effort spent trying things that a little research would have indicated will never work.

2. The key to making sales is to put the right message in front of the right person at the right time. Research finds the right people; testing finds the right message and the right time.

3. The various tool sets will allow you to profile the “followers” of a book or author in Facebook, Twitter, or LinkedIn (or by securing an email address) and it will enable you to understand for each of them what kind of following they have. This is critical research to do before you invest effort and time in actual marketing.

4. Another key research element is to carefully pick your nomenclature. Tools can also tell you how common various words and terms are in searches made through Google, Amazon, and other venues. This informs the best choices for metadata tagging, of course, but it could also affect a book’s titling.

Understanding the book and author’s digital connections and the right language to describe the book you’re selling are “foundational” elements; everything flows from them.

5. The whole concept of marketing “budgeting” needs to be rethought. While the trap or danger in digital marketing is its infinite number of possibilities, the opportunity is that the results of efforts are visible and measurable. So everything that is tried should be measured and evaluated, continued it if is working and either altered or terminated if it is not.

This reality collides with the historical practices and commercial realities of publishers, particularly big publishers. Editors, who have to sign up the books and keep agents and authors happy, want to tell agents and authors what their marketing budgets and efforts will be. Whether the book is selling or not, agents and authors don’t want to hear that the marketing spending was cancelled because the efforts weren’t adding value. But a house can’t just add to the budget when something is working and not cancel anything that is not, or they’ll go broke.

6. The whole concept of “time” also needs to be rethought, both “time on the clock” (work people do) and “time on the calendar” — not just how long programs run (as above) but also when they take place in relation to the lifecycle of the book. In the digital era, whether books are well-represented in stores at any moment is not necessarily the key determinant of how well they’ll sell, so pushing a backlist book that might be thinly distributed but which is suddenly timely is perfectly sensible (“the calendar”). And it wasn’t that way five or ten years ago when marketing efforts wouldn’t be extended if books weren’t in the stores. It is also true that the external costs of digital marketing could be very low but a campaign could consume a lot of in-house time (“the clock”) with copy creation, design, and posting.

7. The key to successful digital marketing is to do the research that finds the right messages and targets, test the messages to the targets looking for a defined result, measure the impact, and then adjust the messaging and targeting. Pete calls that “rinse and repeat”. The objective is to find replicable actions that provide results with an ROI that can be continued until the ROI stops.

With Peter McCarthy’s help and in conjunction with Digital Book World, Cader’s and my Publishers Launch Conferences has organized a Modern Book Marketing Conference to lay out the core tenets of digital marketing for publishers. (So we can all learn from Pete McCarthy.) 

After Pete opens the day by introducing his basic approach, we’ll have a panel of top publishing strategists — Rick Joyce of Perseus, Angela Tribelli of HarperCollins, Matt Litts from the Smithsonian, and Jeff Dodes of St. Martin’s Press – talk about how they apply digital marketing in their companies. Then Murray Izenwasser of Biztegra, a top digital marketing company, will clarify the core principles of using consumer demographic, psychographic, and behavioral data before Susie Sizoler of Penguin covers how publishers can build powerful customer databases and reader insights. Marketers Matt Schwartz of Random House, Rachel Chou of Open Road Integrated Media, and Brad Thomas Parsons of Houghton Mifflin Harcourt will  talk about how they promote, including a “lightning round” of commentary about how and when to use the most important venues and tools: Amazon author pages, Twitter, Facebook, Goodreads, and many others.

We will have a round of speed-dating, so attendees can meet with key sponsors and expert speakers in small groups and get their individual questions answered. And we’ll conclude the day with Erica Curtis of Random House on best practices for measuring and analyzing your marketing ROI, and two panels. The first, on “how digital marketing changes budgeting and timing”, will feature case histories from Sourcebooks, Running Press, and at least one other publisher. The second on the new collaboration required among authors and marketers, will feature agent Laura Dail, outside marketer Penny Sansevieri, inside marketer Miriam Parker of Hachette, and an editor still to be selected.

This Marketing Conference is co-located with our Publishing Services Expo, which I described in a previous post, and attendees of the Marketing Conference are welcome to sit in on any part of PSE as well. At the breaks, sponsors and many of the speakers from both events will be available to the audiences for both events.

Full disclosure and a teaser “announcement”: Pete McCarthy and I are forming a digital marketing agency to apply his knowledge on behalf of publishers, authors, and agents. We’ll reveal more details, including our starter assignments, over the next few weeks.

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