There are three new promotion and marketing opportunities for publishers of ebooks that have been created by the original upstart ebook publisher, Open Road Integrated Media. They all come from OR/M’s development of tools to promote their own extensive list of ebooks, but which now actually benefit from the inclusion of a broader array of titles than the publisher can provide on its own.
This development is interesting for many reasons, but not least because it demonstrates a point about “scale” in the digital era. While it has always been true that a larger title and revenue base enables a publisher to have a larger and more robust sales organization — more reps, more accounts called on more frequently, more frequent shipments that are more efficient to deliver — this could be the first time that a publisher has built digital marketing capabilities that, in effect, wanted more books to optimize their effectiveness.
Open Road’s digital marketing toolkit and resource base is now growing considerably faster than its title base. The company was founded on twin pillars; marrying a publishing opportunity with digital marketing prowess including a strong focus on the backlist. The publishing opportunity — gaining ebook rights to established properties that had not been nailed down in their original publishing contract — is inevitably past its heyday as the number of available worthy titles shrinks every year (if not every day). But the company’s digital marketing assets and expertise, as well as its direct audience reach, are growing faster than ever.
Open Road just announced that their email lists have grown past one million names, on which they are achieving an average 30% open rate and, for their bargain newsletter Early Bird Books, a 28% conversion to sale. These metrics constitute a loud demand for more titles. To provide them, either the company would have to shift to a much riskier title acquisition strategy to add titles of its own or make marketing services an important component of its growth so they could feed their engine with titles from other publishers. Delivering marketing services was the obvious choice.
These marketing efforts now include three distinctly different offers for other publishers to promote their ebooks with Open Road, one of which is a variation on an established theme while the other two provide what might be glimpses into a future when marketing becomes an unbundled service tapping a publisher’s inhouse capabilities, the way sales and distribution have been for years .
The Early Bird Books newsletter, which features ebooks which are currently (and temporarily) promotionally-priced, resembles what is offered by BookBub to the industry and is employed by some other publishers, probably most prominently HarperCollins with BookPerk, for their own books. Open Road is a big customer for BookBub but they believe, based on their own extensive experience, that the maximum effectiveness of promotional pricing is achieved by promoting it as broadly as possible. Open Road sees a synergistic effect when they promote through BookBub and Early Bird at the same time.
The synergistic interaction between BookBub and Early Bird was also noted in a piece last week in The Hot Sheet, the marketing and digital publishing overview delivered regularly by journalists Porter Anderson and Jane Friedman. (Just to clear up what could be potential confusion, this is a different Jane Friedman from the Jane Friedman who originally founded Open Road.)
In fact, Open Road’s carefully measured experience leads them to also advocate that promotional prices only be offered for a brief period — perhaps just one day — for the publisher to enjoy the biggest benefit of the tactic, sales momentum that carries over after the price has returned to “normal”. (Open Road calls this “the tail”.)
There are a few critical takeaways here. A core benefit to promotional pricing is to drive additional sales at full price. The promotional offer is amplified, and therefore much more effective, if it is trumpeted as broadly as possible. Using both BookBub and Early Bird achieves that. And in the digital age, having tight control of your metadata in the marketplace, including being able to change prices up and down with speed and certainty, is a fundamental requirement to maximize marketing effectiveness and sales revenue.
In addition to the price driven opportunities through Early Bird, Open Road has a growing capability to promote to “vertical”, topic- or genre-specific, audiences. Their established tools are The Portalist for fans of science fiction and fantasy and The Lineup for readers of true crime and horror. (These two sites are about to be joined by three others, including their first non-fiction vertical, aimed at “history”.)
The technique here is quite different. Price promotion is not the hook; content aimed at an audience of interest is. Open Road has staffed itself with content creation capability for these verticals, sometimes adapting something from the book and other times creating original content of interest to the vertical audience. Either way, they are steadily building site traffic of readers interested in particular books as well as additional lists for targeted newsletters or promotional mailings for frontlist and backlist and even other content or things that aren’t books that would appeal to the same vertical audience.
Open Road’s experience — and that of other publishers like Penguin Random House and Simon & Schuster that have invested in verticals — demonstrates that vertical audiences are fertile ground for building awareness of a forthcoming book. This is of growing importance. Publishers have been seeing a steady reduction in book “launch” media opportunities. Fewer magazines are doing serialization. There is less book review print space and the most powerful online review opportunities, at the digital retailers, are glutted with self-promoters. Open Road’s vertical portals present a new opportunity to promote some books to their core audiences. The ROI and success metrics are not quite as obvious as they are with Early Bird, but the inherently speculative nature of new title promotion is ameliorated somewhat by the highly targeted audience that these sites attract.
Both the Early Bird and vertical portal promotions are fixed price offers to publishers. The prices aren’t high, but there is an element of risk. What makes Open Road’s third marketing option so unusual is that it is “de-risked”, but it does require an unusual step that not all publishers will be willing to take.
Open Road has invested significantly in building its marketing expertise. That includes using its own tools and lists, but also using other media, responding to signals in the marketplace, and using price promotion in targeted ways. In the past 18 months that the company has focused on developing these capabilities, it has achieved 40% annual revenue growth for its own list. Open Road has such confidence in what its team and techniques can do that it is making what is literally a “no-risk” offer to other publishers willing to put a collection of titles into their hands for complete marketing management.
What Open Road is looking for are clusters of titles that have a reasonably steady baseline of sales. Then, if the publisher will make Open Road the “vendor of record” for these titles for a minimum of a year, they will guarantee the historical level of revenue to the publisher and only take a share of the incremental lift they produce. During the period they control the titles, Open Road will invest their own cash in marketing services and manage the pricing of those title to maximize the revenue gain they will share.
Houghton Mifflin Harcourt is among the first publishers to sign up for the full-service marketing plan with a suite of backlist titles.
Of course, the more titles that Open Road handles through all its marketing offers — promotional, vertical, and full-service — the more they learn, build their experience and analytical base and audience, and develop their tools and staff. This will, presumably, enable more growth: more verticals, more promotional customers who can be targeted with increasing precision, and more experience with more promotional venues and outlets. In the same way that the bigger sales force can call on more accounts and a bigger list can make a sales call on a smaller store profitable, the bigger digital marketing effort will find its way to opportunities that a smaller staff and a smaller list would never uncover.
It is much too soon to forecast that publishers will ultimately become vertical marketing specialists and that competitors will be increasingly finding audiences for each other’s books. But Open Road is definitely stamping themselves as a pioneer in ebook marketing today, just as they were in ebook publishing from their inception.
There was a Shatzkin Files post about how Open Road was changing marketing thinking published just about three years ago. We’ve always been interested in new models, so we have always been interested in this company. We were delighted when they called to ask us to hear about their new marketing efforts and make some suggestions. They hit so many important themes: the benefits of investing in building vertical audiences, price management, core operational requirements, how marketing scale demands more titles, and — most important — how publishers continue to amortize and strengthen what they build for themselves through service offerings to “competitors”. It was a natural to put all this in its own post.