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Digital book marketing: How to capture the
opportunity without breaking the bank
Tools of Change Conference
February 12, 2008
Final Version
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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?”)
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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 breakeven, 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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The growing importance of digital marketing
 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
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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, selfhelp, 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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The content challenge is significant
 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
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And digital marketing has grown more complex…
 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
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The desired state for digital marketing workflow
 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
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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
Publisher
options
Muddle along with the current mix of tools and processes
To market books in the future, publishers will need to
strengthen their ability to develop and distribute digital assets
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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How we approached the project
 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
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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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A better workflow helps on several fronts
 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
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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
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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)
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)
Consolidate (possibly outsource or contract) content conversion
that may occur in multiple departments
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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You can take on this work in stages…
 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
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If you are just starting out today …
Inventory and organize
your assets
Where are they? In what format?
Who do you serve?
Which digital recipients matter, and in what formats?
Create a database of assets: start with what is new and easily
accessible
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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Conclusions
 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
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For additional information
Ted Hill, ted.hill@thaconsulting.com
Brian O’Leary, brian.oleary@magellanmediapartners.com
Thank You!