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Digital book marketing: How to capture the opportunity without breaking the bank

Digital book marketing: How to capture the opportunity without breaking the bank. Tools of Change Conference February 12, 2008 Final Version. Overview. Primary findings Managing digital content in a new marketing era Project background and methodology Estimating ROI

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Digital book marketing: How to capture the opportunity without breaking the bank

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  1. Digital book marketing: How to capture the opportunity without breaking the bank Tools of Change Conference February 12, 2008 Final Version

  2. 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?”)

  3. 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)

  4. 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

  5. The challenge of managing digital content in a new marketing era

  6. 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

  7. 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

  8. 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

  9. 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

  10. 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

  11. Project background & methodology

  12. Our studies began with a specific market perspective We looked broadly at the options, so that we could reliably establish the relative costs and benefits marketing in this emerging digital environment.

  13. 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

  14. 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.)

  15. Improving your digital asset workflow returns benefits in two forms

  16. 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

  17. Estimating ROI

  18. Guidelines for analysis

  19. 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

  20. 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.

  21. 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

  22. Recommendations, including “How do I start doing this?”

  23. Getting ready to implement a digital workflow

  24. Other ways to prepare for a digital future

  25. 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

  26. If you are just starting out today …

  27. 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

  28. For additional information Ted Hill, ted.hill@thaconsulting.com Brian O’Leary, brian.oleary@magellanmediapartners.com Thank You!

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