After a slow start to 2010, Canadian children's publishers began to see a shift in business in the summer and now share guarded optimism that the year will finish on a good note. Despite an improved outlook for the fall, children's publishers are still exploring ways to spur growth throughout the year.

"We're up over last year, which was up over the year before that, so I'm kind of in a state of shock about it," says Alison Morgan, managing director of Tundra Books. "I think we predicted a much harder year in Canada because [Ontario] government funding for schools didn't get continued, and I think a lot of wholesalers just topped up, but so far so good."

Last year, the Ontario government gave school boards C$25 million for the purchase of library books. It was undoubtedly too good to last, especially in the midst of an economic downturn, and publishers repeatedly cited the absence of that funding as one reason 2010 had a slower start than the previous year. Cutbacks to school and library funding, particularly in the U.S., were also a cause for concern for business reasons, but also for the broader social implications. "Lower investment in education will have a cost in the future, but I'm hoping that money will be found to make up the shortfall," says Lionel Koffler, owner and publisher of Firefly Books.

With future government funding uncertain, Canadian children's publishers outlined some of the factors and strategies that are helping them during lean times.

Annick Press director Rick Wilks believes it is important to have a strong identity and books that stand out amid the competition. "The more a publisher looks like other publishers, the more you are going to have problems, because the big houses will win that fight," he says. "We want to do the things that other people aren't doing that really connect with contemporary kids." An example of the kind of book that stood out in recent years was Allan Stratton's Chanda's Secrets. It caught the attention of filmmakers, and last year the film based on it, Life Above All, was selected for the Cannes Film Festival and won the François Chalais Prize. It has now been picked up by Sony Classics for release next year.

Patsy Aldana, publisher of Groundwood Books, says schools and libraries are still looking for quality books with the money they do have to spend, and if you have built a reputation for publishing good books, they will seek you out.

A similar philosophy may have also shaped the first list of books from Cormorant Books' new children's imprint, Dancing Cat Books. "This is the launch season. At this point it's just all investment, no payoff, but the orders are very, very good," says publisher Marc Coté. This fall, Dancing Cat will publish Burn by Alma Fullerton. "Her previous book Libertad was a finalist for virtually every children's award in Canada," Coté notes. He will also publish Home Truths by Jill MacLean, who has twice won the Ann Connor Brimer award, was nominated for the Silver Birch Award in Ontario, and was shortlisted for the Canadian Library Association Book of the Year Award.

Aldana adds that as the number of independent booksellers in the country dwindles, so does the amount of hand-selling, which she considers the kind of retail best suited to children's fiction. This means looking for other places to sell more books, including baby stores, toy shops, and museum shops. For instance, a boxed set created to mark the 10th anniversary of bestselling author Marie-Louise Gay's Stella has "done incredibly well in toy shops, in Costco, in all kinds of places where people are looking for nice, high-quality things for their children," says Aldana.

Kids Can Press has taken this kind of thinking even further by creating some surprising partnerships with companies such as Kellogg's. In a promotion called the Great Canadian Bedtime Story, 300,000 boxes of Rice Krispies were printed with a picture of Snap, Crackle, and Pop reading a copy of Per-Henrik Gürth's Oh Canada! "The partnership was that if you purchased this specially marked box of Rice Krispies, there's a PIN code inside, and Kellogg's will mail you a complimentary copy of the book, and we produced a special bilingual edition of the book for them," explains Kids Can president Lisa Lyons. Kids Can started a similar promotion last year putting Franklin the Turtle mini books in Parmalat Fun Cheese packages, which is continuing this year. Another promotion will run from September to November in partnership with Wendy's, with a Franklin book coming with kids' meals.

Kids Can's latest partnership, however, had a glamorous launch at a Toronto International Film Festival event in September. Kids Can announced that it will donate a portion of its revenue from the sale of David J. Smith's spring 2011 title, This Child, Every Child, which focuses on the U.N. Convention on the Rights of the Child, to the children's charity ONEXONE Foundation. "It's our first foray into cause marketing," says Lyons. "This organization very much aligns with children and their rights and helping to meet their needs as it relates to a number of the U.N. conventions—health, education.... It seemed like an obvious fit, so we reached out to them, and they said, ‘Yes, this is an obvious fit, let's do it.' "

Although there is no C$25 million grant from the Ontario government this year, the government is still offering publishers some other kinds of assistance. Owlkids Books says its marketing efforts in the U.S. benefited from funding from a marketing and business development grant from the Ontario Media Development Corporation last year. After purchasing Maple Tree Press in 2008, the company felt it needed to build recognition of the Owlkids Books brand. Part of the grant was used to advertise in trade journals, including PW and School Library Journal. "We worked in Booklist, and worked with our key customers to do co-op, so that all of those teachers and librarians were seeing our stuff across a variety of platforms and kind of solidifying our name with them. And it's working. Sales are up," says Judy Brunsek, interim director of sales and marketing.

Many Canadian children's publishers are slower to venture out into the digital frontier. Although they are digitizing and often selling e-book versions of books such as YA novels, they are in some ways waiting for the technology to catch up. Still, there are plenty of ways technology can be harnessed to help market e-books and print books.

Second Story Press publisher Margie Wolfe says instead of the pressures to streamline and provide less information as in the past—the one-page–only rule for press releases, as an example—the digital age has actually increased demand for more information. "People want to know more details about authors, anecdotal stuff, all kinds of stuff that expand and make your book more interesting to the potential reader," she says. Second Story has produced video book trailers that can be sent out to foreign publishers and media in an online form. There is also a webcast planned for 1,000 librarians in the U.S. Second Story has also had a consultant prepare a 500-page educator's guide to its 10-book Holocaust Remembrance series to help adapt what started out as trade books for the classroom.

Orca Books publisher Andrew Wooldridge says he, too, thinks it is necessary to create supplementary content such as micro sites with information for teachers or games for readers. "We're under the impression there's so much competition right now, you have to figure out some way to get a book noticed," he says. "If it's adding extra content that makes the book more valuable or if it is adding content which drives a reader to buy either that book or another book, then I think it is worth it."

Orca has been testing the digital waters and has digitized most of its books. "We're trying out different channels to see what will work. I think the school market has huge potential digitally, so we're looking at subscription models for the schools to buy annual access to books," says Wooldridge. There are 12 branded e-bookstores, such as, carrying Orca's e-books. "A lot of the smaller wholesalers in the U.S. are setting up their own e-book stores as well, so we're seeing how that goes," adds Wooldridge. "We're working on as many things as we can find just to see what the potential is."

One of Wooldridge's best experiences with apps is with Tumble Press in Toronto. Tumble has digitized books from Orca and other publishers in its proprietary format, the Tumble Pad. Users can see and hear the book being read, and there is some animation. "[The Tumble Pad is] sold to schools and libraries on a subscription basis and the royalties are paid to the publisher," says Wooldridge. "That's been quite effective."

Rick Wilks says Annick has also had some good experiences licensing multimedia work. Annick's leading app is one that features Robert Munsch stories. That success is not surprising, he says, because it comes with its own branding. "People know him so they download him. The trick is more a marketing one than a technical one.... One of the big questions we're trying to answer is how much do we license and how much do we try to do on our own?"

Most Canadian children's publishers are expecting digital to be a bigger part of the story in 2011, but for now they have time to experiment to see what works and what doesn't.