When Jason Kutasi started San Diego children’s book publisher Puppy Dogs & Ice Cream four years ago, he thought his background in digital marketing might help him break into the book publishing market—but early results have exceeded his most ambitious expectations. He attributed PDIC’s rapid rise to its nontraditional (for book publishers) business model—which relies on direct-to-consumer sales propelled by digital advertising—and to the jump in online book buying caused by the Covid-19 pandemic.
PDIC specializes in books for children, with an emphasis on print formats, though it also publishes e-books. The list, heavy on picture books with bright covers, is categorized into three age groups: early readers (ages up to three), beginning readers (ages four to six), and advanced readers (ages seven and eight). Current best-sellers include such titles as Zen Pig by Mark Brown, illustrated by Amy Brown, and Right Now, I Am Fine by Daniela Owen, illustrated by Gulce Baychik.
PDIC is unabashedly market-driven, and uses all the data it compiles to make its publishing and marketing decisions. Potential titles, layouts, and covers are always tested, primarily through Facebook.
From the beginning, PDIC surpassed its own expectations. It launched in November 2017 with two employees, and its debut release, From A to Z: A Life of Glee, sold 5,000 copies by early December of that year. The press’s 2018 frontlist featured four storybooks, four coloring books, and 16 workbooks. By 2020 it had 21 employees, and its active list consisted of 72 storybooks, nine coloring books, and an activity book.
According to Kutasi, revenue last year soared 555% over 2019. “Covid accelerated the adoption of online buying behavior,” he explained. “People were forced to adapt their buying behavior. I don’t think it’s going to go back—it’s here to stay.” He said the surge in online buying blew away all of his financial projections for 2020 and that revenue last year topped $20 million.
PDIC’s website is its most important sales channel, accounting for about 75% of revenue. Amazon represents 20% of sales, but PDIC doesn’t advertise there—it advertises all of its titles on social media, as well as on Google Display, YouTube, and even online news channels. It also has a mailing list of more than a million names. Among the company’s employees are a host of media buyers who are overseen by a media team director. “It’s about discovery,” Kutasi said in explaining PDIC’s aggressive marketing tactics.
Such a strategy might seem to bypass bricks-and-mortar bookstores altogether, but Kutasi insists that it actually benefits them. “Ads provide brand and product lift to the bookstores,” he maintained. “People walk into the bookstore and recognize the title because they’ve seen the ads. And many people simply prefer to purchase in-store, rather than online. Our own experience and numerous marketing studies have supported this.”
Kutasi acknowledged, however, that physical retail sales only account for a small portion of PDIC’s total revenue and said he would like to expand its business with bookstores. At present, it has no book distributor (it fulfills direct orders through third-party vendors) and hopes to attract booksellers by offering what amounts to wholesale terms; stores can set up an account directly on the PDIC website. To sweeten the deal, Kutasi promises to share customer data relating to the titles sold through the store.
Kutasi expects 2021 to be another strong sales year, and his growth plans include adding adult books to the mix. Like everything else relating to the company’s business, the direction PDIC will take with adult books will be decided after the results of its market research are analyzed.
What will Kutasi be looking for? “The vertical that’s going to resonate with our existing audience the most.”