As we move into what one hopes will be the final stages of the pandemic, the accelerated shift toward online book purchasing looks set to continue—and with it, the intensified focus on digital marketing by trade publishers. A McKinsey survey in the first quarter of 2021 found that over two-thirds of U.S. adults had purchased books online since the pandemic began, and almost two-thirds of those expected to continue at the same or higher level after it subsides—the highest “net intent” to maintain online purchasing of any consumer goods category. And backlist sales have increased from 63% of total unit purchases in 2019 to 67% in 2020, according to NPD BookScan, as consumers increasingly replace bookstore browsing with online search. Though most bookstores have survived the long period of lockdowns, it is not clear when U.S. trade bookstores will reach pre-pandemic sales levels.
Evidence supporting the acceleration of digital marketing comes in multiple forms. One sign is the volume of recruitment listings for data scientists, data analysts, and ad operations managers on publisher job boards. Another is the measurable recent success of specialist industry services like that of Open Road Media (averaging 100%-plus revenue uplift on backlist titles marketed through its Ignition service in 2020 over 2019, according to OR/M’s Mary McAveney) and double-digit growth across the full lists of publishers executing on Ingram Content Group’s Marketing Insights offering. And the continued growth of social media usage (hours per day up 10% in 2020 over 2019, according to eMarketer) has brought new opportunities to leverage consumer-driven book promotion phenomena like Bookstagram and especially BookTok, which had generated a reported six billion views on TikTok as of March.
Ingram’s Peter McCarthy notes that publisher budgets are increasingly being allocated to direct marketing and away from traditional indirect channels. Whereas most publishers previously have taken a more qualitative “brand advertising” approach to marketing books and authors, the emphasis now is on “performance” marketing, with key performance indicators like return on ad spending, conversion rates, click-through rates, and the like.
For big books like the recent Obama memoirs, publishers have generally relied on “front-of-store” type promotions as well as some digital ads and Amazon optimization, while for midlist and backlist titles, they have relied on improving metadata, newsletters, and channels like BookBub, which offers daily discounts on e-books to its 15 million subscribers. Now, McCarthy says, even for new authors, publishers are asking for more performance marketing tips based on data.
Publishers’ increased attention to digital marketing comes at a time of privacy-driven changes in the digital advertising landscape. Google has announced that by the end of 2021 it will follow Apple’s Safari and Mozilla’s Firefox and phase out the use of third-party cookies—which track user behavior across multiple sites and retarget ads to individuals from site to site—in its Chrome browser. And Apple is requiring apps in its iOS 14.5 update to get permission to track users across different sites (a survey by Flurry Analytics found that only 4% of U.S. users were giving their consent). Apple has built its own ad system on the iPhone, which records, tracks, and targets users—but only on the device itself and only on its own apps and services, and it only serves the ads to anonymized interest-based cohorts. (This is conceptually similar to a Google proposal in which the Chrome browser would use data to create anonymized interest-based cohorts called FLoCs, or Federated Learning of Cohorts).
The most effective tools for digital marketing involve the collection of “first-party” data gained by convincing customers to share their personal information. Most major publishers have cultivated this approach with newsletters, clubs, and direct-to-consumer websites in specific verticals. Still, it’s difficult to apply these approaches to marketing at scale.
With third-party cookies being phased out, more attention is being paid to an option that publishers have used most frequently for digital advertising. Contextual targeting delivers relevant ads by analyzing the content being consumed rather than the person consuming it. This protects consumers’ privacy while enabling book marketers to engage them with relevant ads, even if retargeting and conversion attribution are unavailable outside the walled gardens of Amazon, Facebook, and Google. And with growing application of machine learning and natural language processing, advertisers are gaining better tools for finding the most relevant content.
A robust and refined consumer database remains the Holy Grail, and the biggest players will find the most leverage there. For medium and smaller publishers, says Joshua Schwartz, CEO of digital marketing agency Pubvendo, “the most effective road to digital marketing at scale may be to train their authors to do it for themselves.” But one thing is certain: as the ability of deep-pocketed publishers to dominate retail with physical go-to-market capabilities becomes less relevant, the playing field is leveling, and digital marketing savvy will be a key factor in determining the winners.
Steve Sieck is president of SKS Advisors, a consulting firm serving publishers and information services providers, and a partner in Publishing Technology Partners.