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Transcript of 1 Digital book marketing: How to capture the opportunity without breaking the bank Tools of Change...
1
Digital book marketing: How to capture the opportunity without breaking the bank
Tools of Change ConferenceFebruary 12, 2008
Final Version
22
Overview
Primary findings
Managing digital content in a new marketing era
Project background and methodology
Estimating ROI
Recommendations (including “how do I start doing this?”)
33
What our studies revealed
“Every" smaller publisher who wants to compete using digital marketing assets needs a digital asset partner
”Most" mid-size publishers could still do better working with a digital asset partner than by managing it in-house
"Only" the largest publishers can justify the cost of building an infrastructure that is spread across multiple media and content assets
The rest of us will have to forge new distribution relationships through them or around them (your call)
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Graphically speaking …
Use cases specific to your house may shift your position relative to break-even, but in almost all cases the difference will not justify doing this work on your own
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The challenge of managing digital content in a new marketing era
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Increasingly, readers, book buyers and the media use the Web to learn about new titles and authors
As traditional main-stream media outlets lose their marketing effectiveness, publishers need to increase their presence in emerging online channels
The rapid emergence of these new uses for digital assets outstrips most publishers’ abilities to take advantage of them
To capitalize on these opportunities cost effectively (and maintain content control), publishers need to develop a single content repository as an authoritative source that serves a wide variety of channels
The growing importance of digital marketing
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Many literary agents see opportunity in digital marketing
Most (96%) felt that an effective author Web presence sells more books
53% believe authors should spend more than 5 hours a week on their Web sites (the median response was 5.9 hours per week)
The digital tools of greatest value were author Web sites, fan Web sites, online columns, author blogs and book excerpts (in that order)
Web site budgets were typically small (between $1K and $5K to develop, and a similar range or less to maintain)
The strongest subject areas for internet marketing were business, self-help, diet/cooking and health, followed by religion and commercial fiction
This survey, developed in concert with Market Partners, was conducted in late 2006; new survey results confirm the findings
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Almost every publisher acquires or creates multiple files for each title
All publishers manage an even higher number of versions of files for each title
Even smaller and mid-sized publishers may acquire, manage and distribute thousands of new digital files each year
The mix of formats (adult hardcover, trade paperbacks, young adult, children’s) and complexity of a publisher’s front-list has often been supported by a diverse range of content processes that don’t map consistently to a uniform content repository
As short-run production technologies come online, fewer titles are declared out of print and the breadth of backlists and the files needed to support them has increased
The content challenge is significant
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Agreements signed with new partners such as Google Book Search and Microsoft Live Search Books require support
New digital marketing and sales opportunities continue to crop up on a regular basis (most recently, BN.com) and will require support
Typically, digital assets are not stored repositories whose structure allows efficient IP discovery and distribution
Workflow and infrastructure were designed to support turnkey book production and sales so new uses must be addressed “by hand”
The fluid nature of this evolving marketing toolkit makes it difficult to realize the benefits of economies of scale while taking advantage of available opportunities
And digital marketing has grown more complex…
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Digital files for all new titles and most active backlist are indexed and stored in a single repository
Book Search, Live Search, Search Inside, and BN are supplied with new titles and most active backlist in low-cost, turnkey process
Highest potential new titles and backlist are converted for major eBook formats: Kindle, Palm, Mobipocket, Adobe; conversion costs for Sony, Microsoft and other formats can be evaluated against sales potential
All new titles are evaluated against a checklist of digital marketing assets which are stored alongside metadata, production files and final content assets
The desired state for digital marketing workflow
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Project background & methodology
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Our studies began with a specific market perspective
Market perspective
Effective use of digital marketing tools is no longer optional
To market books in the future, publishers will need to strengthen their ability to develop and distribute digital assets
Publisher options
Muddle along with the current mix of tools and processes
Create a structured, perhaps interim “mixed” solution built on Digital Asset Management (DAM) system
Manage all digital assets through or in partnership with a Digital Asset Distributor (DAD)
We looked broadly at the options, so that we could reliably establish the relative costs and benefits marketing in this emerging digital environment.
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Based our “use cases” on the most common list of digital asset recipients (DARs)
Documented the cost of supplying digital content to production, sales, and marketing partners
Identified opportunities to use partners to save money or improve sales revenues (pre-, on- and post-publication)
Evaluated the likely cost of engaging leading digital asset distributors
Examined what would help make a publisher “DAD-ready”
Created a business case for digital distribution of book content
How we approached the project
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Market structure influenced our choice of use cases
An evolving part of the market
There is substantial overlap among DARs (merchants run web sites and book search programs, etc.)
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Improving your digital asset workflow returns benefits in two forms
Reducing both hard and soft costs of managing digital files for current uses
Making corrections on reprints
Subsidiary rights (both pre-sales and post-sale support)
Licensing and maintenance of current digital asset management system(s)
Economies of scale when converting files
Enabling greater revenues
Increased sales at Amazon driven by fuller participation in programs such as Search Inside, Browse Inside, and Amazon Upgrade
Increased sales throughout online and offline merchants, due to stronger online presence of titles and authors on search engines, Web sites, etc.
Incremental revenues from eBook sales
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Cost savings and new revenues associated with an efficient digital workflow can more than offset associated investments (as shown in the following section)
The benefits stem from having a single, authoritative source of digital content and a simplified workflow enabled by it
The extent of both savings and revenues depends on the ability of publishers to take full advantage of partner capabilities
The single biggest benefit may be the avoided cost of building and maintaining an in-house DAM system
A better workflow helps on several fronts
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Estimating ROI
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Guidelines for analysis
Assumptions Between 300 and 350 new titles per year, with a backlist of 1,500 titles
At this volume, the direct costs of working with a DAD total $400K to $550K over three years
This total is front-end loaded: $250K to $350K to set up and convert a backlist in the first year, followed by $75K to $100K in ongoing conversion and maintenance
Conversion costs
How deep do you go into your backlist?
Do you need to support all formats for all titles?
Can updated workflows reduce downstream conversion costs?
Other considerations
A limited implementation would cost less (total expense estimated at $275K to $350K over three years), but the benefits would be significantly lower
The estimates are based on hard costs; internal staff allocations and any additional consulting are excluded in this analysis
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Assessing costs and benefits of a digital workflow
Cumulative over 3 years;
assumes a staged
accrual of benefits
starting with hard costs in year 1 and a
portion of soft (staff)
costs in years 2, 3
2020
Per-title benefits of a digital workflow
Cumulative over 3 years;
costs and benefits vary by publisher,
with the relative
benefits available in each area subject to
some variations.
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Estimated return on investment
A net benefit of about $124K over 3 years
Depending on assumptions about initial expense and the timing of benefits, ROI can vary from 9% to over 60%, calculated over the 3 years
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Recommendations, including “How do I start doing this?”
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Getting ready to implement a digital workflow
Printers Create a more uniform workflow for text and illustrated books
Determine the level of content disaggregation (i.e., book, chapter, page, components) that you need to support in the future
Once the level of disaggregation is established, look for opportunities to migrate disparate storage (printer, color separator, compositors) to a uniform, central repository
Merchants Consolidate (possibly outsource or contract) content conversion that may now occur now in multiple departments
Sub rights Develop subsets of use cases that are linked to either the level of content disaggregation (see “printers”, above) or the point at which content is required
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Other ways to prepare for a digital future
Web sites and syndicators
Simplify and automate the title data feeds (including subsets that require manual intervention)
Consolidate (possibly outsource or contract) content conversion that may occur in multiple departments
Online book search
Confirm standards that will allow you to automatically use the files returned from printers or compositors as direct feeds to online book search programs
eBooks Confirm standards that will allow you to automatically use the files returned from printers or compositors as direct feeds to online book search programs (variant of “online book search” recommendation, above)
Simplify and automate the downsizing of title data feeds ( including subsets that may require manual intervention; variant of “web sites” recommendation, above)
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Develop an internal set of priorities on which use cases matter, and which ones matter most
Develop a clear internal consensus on whether your house will manage or outsource digital asset management
Identify opportunities to update or revise processes to streamline content management (whether outsourced or managed internally)
Work to streamline efforts that support metadata distribution
Look downstream to prepare for use cases in which content (complete books or components) and metadata will need to travel together
You can take on this work in stages…
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If you are just starting out today …
Inventory and organize your assets
Where are they? In what format?
Create a database of assets: start with what is new and easily accessible
Who do you serve? Which digital recipients matter, and in what formats?
All four book search programs? Yes!
All titles in all eBook programs? Probably not.
Segment your list For both front and back lists: are rights clear?
Which markets offer the best near-term opportunities? Adult, YA, childrens? Fiction or non-fiction? How to treat straight text versus a childrens book?
Rank by sales at Amazon
And then… Implement the recommendations offered here
Draft your digital workflow RFP (and get to know the providers)
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Without a comprehensive DAD solution, the pain of supporting new asset uses will grow and the benefits of investments already made will not be fully realized
The DAD decision mixes both strategy (how do you best manage your content?) and tactics (what is the most cost-effective distribution option?)
This review indicates that a DAD investment offers operational agility with reasonable dividends paid over a three-year implementation period
Some benefits (online book search, syndication support) may be more significant than the use case analysis suggests, but the benefits will not be established until other enabling decisions are made
There is a healthy mix of current priorities that can be addressed now to help accrue near-term benefits and determine future paths
Conclusions
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For additional information
Ted Hill, [email protected]
Brian O’Leary, [email protected]
Thank You!