The Shatzkin Files


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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  • WHM

    “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”

    I think that that assumption varies widely based on demographic and audience, and it’s not clear to me that it applies specifically to areas where growth is most likely to be found (younger readers, heavy readers, passionate fans of specific authors or subgenres). The same kind of people who would trust an institution substantially more than a “self-interested” individual are the readers who can be reached through the established channels that publishers are already good at leveraging — major book review outlets, top-tier book blogs, media appearances, bookstore appearances, etc. — and who are already unlikely to buy self-published books (aside from the occasional, impossible-to-predict viral indie hit).

    • http://idealog.com/blog Mike Shatzkin

      I would only point out that branding isn’t just important for audiences where “growth might be found”. It is *also *important to *retain *audiences publishers already have!

      • WHM

        Yeesh. Publishers are in a tough spot if that’s the primary reason to engage in branding and consumer outreach. Usually it’s better to already have brand established with the audiences you already have — otherwise you don’t really have them as an audience.

        But also: I’m not convinced on the need for (chance for success of) an umbrella brand over the imprints, especially when it comes to establishing credibility with readers. It might work for Random House Penguin, but to me it just clutters the messaging, especially since the imprint brand identities are likely to be so different from each other (and should be) and especially since the umbrella brands aren’t already firmly established. This is especially true since the imprints already have sub-brands/brand extensions in the form of author names or series titles. This also means that if an imprint fails or puts out titles that are wildly different from what readers associate with the corporate brand, you don’t end up with dissonance in the brand strategy.

      • http://idealog.com/blog Mike Shatzkin

        In general, I don’t think imprint brands are intended to matter to consumers. And, in general, I don’t think they *can *mean anything because there is no audience-consistency to the editorial decisions. Imprints across big houses: St. Martin’s and Holt at Macmillan, Knopf and Crown at PRH, Morrow at HarperCollins, Atria at S&S (as examples) are all *so *broad that they don’t send a consistent consumer signal. They are *intended *to mean something to the trade — about quality, about marketing approach or effort — and maybe they do mean something to some trade experts. But only brands that are audience-centric, like sci-fi imprint Tor, can conceivably have any meaning to consumers. And the One Big Brand suggestion is my response to new circumstances: the interconnected rise of self-publishing and decline of physical retail. Before that happened. the book being in the store was all the credibility needed (and it also was the key to marketing and discovery).

      • WHM

        “In general, I don’t think imprint brands are intended to matter to consumers.”

        Then why even have them? (other than for internal political reasons — which is not a good reason to have a brand).

        Also: one big grand brand to demarcate quality is a weak thing to build a brand around, especially since the product is supposed to be the result of creativity and passion. For that, it’d almost be better to have an industry-wide mark. Something like the BBB seal. Ideally, you’d want a brand that creates more than just a “oh, this is not self-published so it might be good” feeling in the consumer.

      • http://idealog.com/blog Mike Shatzkin

        Why have them? Because they are still powerful signals to bookstore buyers, library collection developers, and reviewers. AND because they are part of internal organization (“politics”) that cluster editorial decisions and marketing and PR operations around groups of titles. The brands we have *are *an artifact of trade publishing as nearly a 100% B2B business and are of diminishing relevance. But they were there for reasons that haven’t been entirely obviated. I have been writing about this on the blog for the full five years I’ve been doing it and it came up in speeches before that, maybe even going back to the 1990s.

      • WHM

        I understand why they exist. I just think that if publishers are serious about engaging directly with readers they need to re-think how they go about branding. And I bet that some of the imprints could be transformed into brands and still send the signals to the same set of B2B decision makers (or even send clearer signals to them).

      • http://idealog.com/blog Mike Shatzkin

        But it is SOOO much more complicated than that. Many books that belong in the same vertical are sprinkled across imprints. Random House UK talks about “cookery” as a vertical they want to exploit. And they’ve hired Rebecca Smart away from Osprey to run Ebury, where I’ll bet many of the cookbooks are. But *not *all of them! For a house to turn their imprints into meaningful brands will require reshuffling what books are in what imprints. This is an organizational and logistical and agent- and author-relationship nightmare. Saying “just do it” is advice they simply can’t follow.

      • WHM

        So implement brands that represent the verticals and those imprints that don’t become one of the vertical brands can live on as organizational fiefdoms (and be mentioned on the title page). I get that reshuffling would be nigh on impossible for an organization, but do publishers want to engage in branding (which, of course, isn’t just visual identity and reputation, but also includes product mix) or do they not? And if not, then how exactly are they going to gain traction with readers?

        This purely anecdotal, but: I don’t see myself signing up for a Penguin Random House or Macmillan email list. Or visiting a Penguin Random House website or store front. I might, however, be willing to hear from Farrar, Straus and Giroux, especially I had a better understanding of what FSG’s brand and product mix was. Proof of that is that I do subscribe to Tor.com.

      • http://idealog.com/blog Mike Shatzkin

        This is a long-term thing not an immediate one. Let’s remember that more than of the units for most titles are still sold in stores.

        As for signing up, I take your point. I have noticed that S&S pushes hard for very general mail-list sign-ups in their ebooks. But S&S also is doing some serious investing in vertical marketing efforts. I don’t see this as all one thing or another. After all, sending emails is near enough to free that you want to encourage all the signups you can. And with modern techniques for learning more about people through tools that find them in the social graph, you might be able to verticalize an offering even without having had the volunteer sign up for one.

      • WHM

        Yep. That’s a good point.

  • WHM

    Back to one of the primary premises, which is that a company-wide umbrella brand could perhaps be used to indicate “acceptable level of quality” to consumers. One of the issues there is that if all of the big publishers more directly engaged in efforts to create that association with readers to their brand, then you have a bunch of brands all trying to carve out the same position. Granted, it’s a fairly easy, small position — “This is not a self-published book” — but consumers only have so much space in their head to associate a logo with the meaning. And many small presses (and even some self-publishers) are fully capable of developing brand marks that signal professionalism just as much as a much larger entity. Proctor & Gamble and Johnson & Johnson sort of work because they are so huge and omnipresent in retail (and can afford to brand advertise on a massive scale).

    Other than Penguin Random House, I just don’t see publishers being able to gain traction with an umbrella brand. Of course, this may mean that PRH has a chance to carve out the “we are the dominant brand in traditional publishing” brand.

    • http://idealog.com/blog Mike Shatzkin

      I think the rule is that we can all easily hold 5 to 7 things in memory. I agree that the more of these that try to be established, the harder it is. That’s why I would recommend to the Big Five that they go for one umbrella brand each. All five of these companies sell tens of millions of books each year. Their units sold dwarf the ones that come next. The five of them should be able to accomplish this without a big problem if they focus on it. Everybody else will have a harder time.

      • WHM

        I don’t know about five. Maybe three (which is where things are likely headed anyway). But I’m not sure that it’s not going to be “without a big problem”. After all, you’re competing not only with other publishers, but also with other entertainment brands. It takes resources (for media buys, etc.) and smart creative to run a successful corporate/umbrella brand campaign that gains traction. I

        t also might take some better brand names and visual identity systems. For example, I think PRH should just go with Penguin. macmillan could use a less blah visual identity. HarperCollins, Hachette and S&S all are workable (although S&S should do some testing on the illustration that’s part of their logo).

      • http://idealog.com/blog Mike Shatzkin

        I think the applicable expression here is “close enough for government work”.

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  • John Andrews

    Two points:
    (1) As a consumer, I agree about the importance of brands. The brands I trust most are Penguin and Faber and Faber for literature, Wiley for technical books and O’Reily for computer books. How does one find out which brands are trustworthy? I have hardly ever bought a Nikon but know it is a trustworthy brand. Books do not tend to come to my notice under brand names.
    (2) Despite the logic of email lists, I can see that Gmail would classify emails from publishers as ‘promotions’ and I would hardly ever read them.

    • http://idealog.com/blog Mike Shatzkin

      How publishers and marketers work around the gmail problem is above my pay grade, but I’ll bet my partner Pete McCarthy has an answer for that! Anyway, I use gmail but I don’t use that kind of categorization help so I’m here to tell you that not all gmail users would be affected.

      And the branding I’m talking about is “defensive”; wouldn’t carry the value you are ascribing to the brands you mention. I’m only concerned about a future where the market is flooded with self-published stuff and where consumers learn they need to navigate around it, or at least want to know whether they’re buying a “real” publisher’s book or not. I don’t think it is a strong sales pitch to say “Random House” or “Simon & Schuster”. But it does say “professional, not amateur”. That’s really all I was trying to accomplish with that suggestion.

      • John Andrews

        It would be good to have Elizabeth Castro’s views on branding. She is the author of print books (on HTML etc) and is venturing into self-published books. Some are technical (eg on the ePub format) and some are illustrated books on personal interests eg the Monarch Butterfly, sold on iTunes). I learned of her competence from her website and prefer having an eBook because I really need to read it once only – and its cheaper. The fact that it was self-published is an irrelevance for me. She is the brand I am buying. I know your concern is primarily for trade books – but if buying a literary work by an author I admired, I think it would appeal to me that it was coming straight from the author. And if the book had ‘Dear John’ signed inside the cover then I would be happy to pay up for a printed book.

      • http://idealog.com/blog Mike Shatzkin

        The author is the *ultimate *brand! Always has been in this business.

  • willentrekin

    Really I don’t think a brand can be ‘established’ at all; brands, like stories, exist in the minds of users (or readers). About the most one can do is cultivate a brand by influencing perception, which is what marketing is for.

    The clearest demonstration of the problem that imprints and such efforts give rise to was the recent misunderstanding between TOR, tor.com, Patrick Nielsen Hayden, and the author who sent so many people Nielsen Hayden’s way with regard to that graphic novel.

    “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.”

    So you think I, as a reader, am going to give my email to a corporate publisher so that they can ask me if I’d like to be asked about how they might best publish for me and market to me?

    • http://idealog.com/blog Mike Shatzkin

      Brands are “established”, first and foremost, by *what they are*. If you try to “create” a false identity, it won’t work.

      And I’m afraid your mother-in-law survey of one isn’t representative. It turns out (I’ve learned since I wrote the piece) that Random House UK pretty much does what I suggested. They are putting people on “panels” for feedback all the time. LOTS of them. It is a very dangerous practice to generalize from the specific, and most dangerous of all when the specific is YOU.

      • willentrekin

        Brands are based on identity; they’re how users perceive an identity. But users create brands, not vice versa. And I’m not sure why you’re bringing my mother-in-law into this. I mean, she’s awesome, sure, but what?

      • http://idealog.com/blog Mike Shatzkin

        Users CREATE brands? USERS “created” Coca-Cola? Chevrolet? Windows? I think we’re working with different definitions of “create”.

  • http://www.antellus.com/ Theresa M. Moore

    I have only ever had one brand for publishing my books and I plan to keep it that way. I have publicized Antellus as my imprint for all of them, keeping in mind that most readers don’t care about the brand at all. They look for author names, not brands. So far it has worked to a certain extent, but in search my site is often mistaken for Entellus, and I have had emails from people who don’t check to see the difference. When buying aluminum foil no one is going to tell the difference between Alcoa and Reynolds; both foils are the same.

    • http://idealog.com/blog Mike Shatzkin

      I guarantee that if you ask enough aluminum foil users, you’ll find some that are sure one is better than the other! People tend to have opinions even when there’s little basis for one. But furthermore, both Reynolds and Alcoa have an advantage over Brand X if anybody decided to try to do a Brand X.

  • Peter Turner

    Though it’s off topic, I would throw into the mix a point about brands and bookselling. Part of the reason (I’m guessing) why some indie booksellers are surviving even in the face of Amazon’s pricing and ease of ordering is because of brand, specifically branding around their particular selection. In my (admitedly rarefiled) town of Cambridge, I *know* the Harvard Bookstore has a terrific Philosophy selection with a particular academic bent that I share. I know that Porter Square books has a great literature selection, at least one to reflects my tastes. I know the Harvard Co-op has a lot of nicely selected table displays for general browsing. One nuance to bookseller brand is that it’s the result of a wonderful sort of alchemy reflecting the interests of the owner and what they choose to bring in from the myriad books available combined with what the clientele tend to buy.

    • http://idealog.com/blog Mike Shatzkin

      I see your point. It is also true that B&N has a brand that works from locale to locale. The only reservation I have with this observation is that the point to brand is that you can recognize it around things you *don’t *know: another book by the same author, another store in the same chain, another book published by the same imprint. The localized example you suggest is not so much about knowing a *brand *as it is about knowing a specific establishment.

  • Steven Zacharius

    I’m not sure that Tor would be a great example to use as a brand. I believe it stands out as the Sci-Fi imprint because there really is very little sci-fi being published by traditional publishers. I believe Harlequin is probably the single best known brand in publishing for the series romance. Part of this is helped by the fact that they have dedicated space for the series romance in most retailers. Other decent brands in romance would be Ellora’s Cave or Samhain and certainly Penguin classics are a great brand. But I think most large publishers have done a lousy job of branding their imprints. First of all it’s very expensive to do reinforce. Think about the amount of money being spent by McDonalds, Coca Cola, etc….to promote their brand versus what you see spent on book publishing.

    The biggest reason for this would be the low selling price of our product and the lack of advertising in books to help offset the cost of book publishing; like magazines have for their business model. I do believe this will change one day and you might see ads on the back of a book cover. What better place is there to place an ad for a product than the back cover a book that might stay in a person’s personal collection for a lifetime or be seen reading for a month on a train or bus?

    Most readers of books don’t really care much about the brand other than those I mentioned above. There are other exceptions that keep popping into my head in the children’s area but by and large publishers have done a lousy job at branding. Most readers, at least in the genres that we publish at Kensington, are buying by author rather than Publisher. When I go to by a thriller, I’m buying a Coben, Patterson, Child, without paying any attention to the publisher and I’m in the business.

    That being said, if we could develop better branding, it certainly does help. We have it to a certain extent with Zebra being a romance imprint but certainly not to the extent of Harlequin. Ok, so I’m jealous :)

    • http://idealog.com/blog Mike Shatzkin

      Steve, I see branding having two purposes. The first one is to help the consumer distinguish what comes from a professional publisher from what comes from an amateur. Certainly all of you who sell millions of units each year have the consumer contact you need to establish yourself as a reliable supplier, if you try.

      The other purpose is to identify yourself in a niche marketplace. I’m pretty sure Tor is known to devoted sci-fi readers. That’s a guess. But it isn’t a guess that they had 650,000 email names two years ago when I wrote about it on this blog. And that they got more than 200,000 opened and more than 40,000 to take an action. In one month. That’s a measurement of brand power.

      • Steven Zacharius

        I agree that they are a well known brand but I think it’s more because of a lack of competition in this genre. Certainly readers of scifi know them but I think part of that is due to the lack of available product other than from indie authors primarily.