WHAT WRITERS NEED TO KNOW ABOUT MARKETING Pt. 3 (By Jerry D. Simmons)
Copyright 2015 Jerry D. Simmons & WritersReaders.com
The Insiders Guide to Publishing
WHAT WRITERS NEED TO KNOW ABOUT MARKETING
The marketing focus of the major publishers.
Now that you understand the dominant forces behind marketing books and the three advertising methods in the book-publishing industry, you need to understand how the biggest publishers use and apply these forces and methods. Major New York trade publishers have a particular idea about how to market and to whom. They tend to follow a very simple formula and follow the same pattern to varying degrees on every successive book. They seldom, if ever, venture outside of these long-standing parameters. It may surprise you to learn that their existing customer base sets these parameters. But this is understandable given that publishers’ customer base isn’t the public; it’s the book distributors and retailers. They, in turn, get the final product (your book) to the end consumer.
Marketing to groups or individuals outside of existing boundaries seldom happens either. For example, publishers are accustomed to dealing with booksellers—the major bookstore chains, mass merchants, wholesale clubs, and independent bookstores. Publishers also sell to supermarkets, drug stores, airports, and military bases. Sellers and buyers have established relationships, terms of sale, and a recognized system for buying product. Discounts are standardized, distribution is guaranteed, and so the process of selling product to these booksellers is easy. Introduce a new organization that trade publishers have never sold books to and panic can set in. The publishers are outside their comfort zone. Instead of working directly with the new organization, the publishers would prefer to make that sale through a recognized bookseller, perhaps a distributor who would act as a middleman in securing the sale.
This reluctance to go outside the parameters means that, over the past 15 years, book publishers have focused their marketing efforts along two unequal directions. The increasingly less important marketing focus is the end consumer, the reading public. Yes, there’s always been, and will always be, national television, radio, or print campaigns aimed at consumers, trying to persuade them to buy from retail booksellers. But as the business has changed, marketing directly to the bookseller has become more important than advertising to the end consumer. As a result, the last decade has seen the big publishers’ prevailing marketing strategy switch: they now sell books by persuading the retail booksellers to purchase in far larger quantities than in the past.
It’s sometimes easy to forget that booksellers are the publishers’ primary focus. That’s because marketing used to be about the net sale—the goal was to pull the consumer into the retail store. But, again, that’s no longer the objective of the major publishers’ marketing efforts. Today the goal is to push product—finding ways to ship more books to booksellers. High returns are simply considered part of the cost of doing business. All of the publishers’ marketing efforts are directed toward one goal: generating revenue—up front in the form of large book orders—regardless of returns. Here, don’t confuse revenue with net sales. Revenue is the total sum of the publishers’ billing of books. It doesn’t reflect how many units have actually sold at retail. Finding ways to generate excessive billing without regard to returns is the path that the major publishers have decided to follow.
What it means to you. This huge shift in publishers’ marketing focus is creating enormous problems at every stage along the distribution chain. For you, it can negatively impact the opportunity for your book(s) to sell more copies than are returned. The more you know about the way publishers market books, the better chance you’ll have to offer suggestions to your publisher on how you want your book marketed.
The traditional marketplace.
This section’s focus is strictly confined to the traditional book marketplace: the retailers that sell books and the booksellers that provide the distribution and warehousing of the product. It’s important to understand the different type of book formats published/sold, and the different types of booksellers, as these are the primary factors governing the traditional marketplace and what happens there. Big publishers give little consideration to any market outside those parameters and this is an important fact to consider when you create a marketing plan for your book. There’s virtually no effort made to sell directly to the consumer, your end reader, or to small groups or organizations. If the order doesn’t generate thousands (if not tens of thousands) of copies, then the marketing effort is barely on the radar and the big publishers will make little, if any, effort.
What it means to you. Being confined to tradition is a huge weakness of the major publishers and one area that you, as an author, need to pay particular attention to. If you’re a self-published author, or a small press is publishing your book, keep in mind the traditional book marketplace is very competitive and difficult to penetrate. You must be creative in your thinking about marketing. For example, if you’ve written a children’s book where the main character is an animal, why not focus some of your marketing to pet stores and their customers? This is the kind of retailer that may not, as a rule, sell books; however, they might be tempted if you create an effective marketing plan. It’s definitely the kind of retailer well beyond the traditional marketplace where major publishers are most comfortable.
(1) Different types of book formats. Marketing to the consumer or book-buying customer is different for every book format: Hardcover, mass-market paperbacks (the smallest standardized size of soft-cover book), trade paperbacks (those oversized soft cover books), and juvenile. Typically, the hard covers get the most attention, followed by the mass-market paperbacks, then trade paper, and finally the juvenile books. The hard covers generate the largest chunk of billing and that’s why they get the most time, money, and attention from the publisher. The mass-market paperbacks generate the second largest piece of billing followed by trade paper and juvenile, and publishers give these correspondingly less attention. This gives you some idea about the relative amount of resources in money, time, and people that are spent on the various formats.
What it means to you. If you’re writing a mass-market paperback, publishers won’t direct the same kind of resources to your book as they would a hardcover title. This result especially applies to writers of juvenile books since you’re at the bottom of the food chain. Original trade paper, though growing in popularity, gets some attention and resources, but certainly not as much as the two formats that precede them. The reason is billing. What generates the most billing gets the most attention and available resources whether it’s time, people, or money. There are rarely exceptions to this rule, but I’ve learned to never say never!
(2) The different types of booksellers and the marketing strategies publishers use to sell to them. Because publishers can’t legally sell books at prices based on volume, they circumvent the restriction in a number of creative ways. Publishers will offer a variety of incentives to booksellers and these incentives are paid based on volume. For example, a publisher may offer 30 copies of a book in a floor display and will pay the bookstore $5 for each display purchased. For smaller, local, and independent bookstores, they might buy only one floor display. For that purchase, they’d receive a payment, typically through a credit issued to the invoice, of $5. This is called a placement allowance.
In contrast, chain bookstores, which might operate 1,000 stores, are also eligible for the placement allowance. Consequently, they may buy more 30-copy floor displays than they have actual stores and receive a $5 payment for each floor display purchased. Considering a national chain has the capacity to order much larger quantities of books in the form of floor displays, the payment—from publishers—is obviously much larger. If you multiply this example times several books per publisher, you can see how the small, local, and independent bookstores are at a distinct competitive disadvantage.
Here’s another big-publisher strategy to generate billing revenue. Suppose the big publisher has a limit of one display purchase required for the small bookstore. If the publisher needs to force copies out into the market, it will set the limit at two 30-copy floor displays. Typically the small stores will pass, but not the chains. If a chain has 1,500 stores, the publisher may set the chain’s qualifying limit at 2,000, which for the chain may end up being negotiable, but not for the small bookstore. The result is that the chain will buy what they need to get the placement allowance, often thousands of dollars ($5 x 1,500 displays = $7,500), and worry about the returns later.
This is how the larger retailers or booksellers are able to create a nice revenue stream from the publishers without worrying about a volume discount. This becomes a real problem because the booksellers end up buying more copies than they can reasonably sell just so they can get the placement allowance. In the end, the system starts to breakdown. Publisher incentives force larger and larger quantities of books into the marketplace that are later returned, unsold.
This practice, of course, has a ripple effect throughout the distribution chain. It begins with a publisher’s willingness to ship more books. Then the customer (whether a retailer, distributor, wholesaler, or jobber) buys more books, resulting in more books entering their distribution process. This forces retailers to turn their inventory quicker, which creates bigger returns, all in an effort to find placement for the larger than normal number of books entering the marketplace—a direct result of the publishers’ offered incentives.
What this means to you. Consider that there are any number of publishers large and small in competition for the same limited retail space using the same tactics. Multiply all publishers times hundreds of titles being published each year, times the tens of thousands of dollars being offered, and you begin to get some idea about the over distribution problem and the current state of the mainstream publishing business.
Marketing strengths of major publishers.
Marketing varies from publisher to publisher and the bigger ones have advantages over smaller competitors. The major trade publishers excel in five marketing areas: (1)meeting big demands of the largest booksellers, (2) marketing directly to the book buyers of those large booksellers, (3) purchasing large blocks of national advertising, (4) budgeting money for in-store promotions and incentives, and (5) generating regional and national publicity. It’s very difficult, if not impossible, for smaller entities to compete effectively in these five areas. The money being spent and the economies of scale mean that the major trade publishers have a distinct advantage in these areas.
(1) Meeting bookseller demands. Major publishers can meet the needs and demands of the bigger customers. For example, they’ll assign a national account person to each of their largest customers, and it’s that person’s responsibility to not only sell books in large numbers, but to answer all questions, provide as much information as requested, conduct quarterly business reviews, stay in constant contact, and develop a relationship—in short, become the single most important person from that publishing house to that bookseller. When you consider the market share, or percent of the total print order the big chains buy from publishers, you can understand why so much attention is paid to these customers.
(2) Marketing. Big publishers market directly to their biggest book buyers and customers, and they do this extremely well. This direct marketing effort creates opportunity for the publisher to present new and creative incentives enticing companies to buy quantities of books much larger than that bookseller can reasonably expect to distribute and sell. When you look at a publisher’s overall marketing budget, a larger and larger percentage of the total is being spent on incentives paid to the biggest booksellers. There’s no way a self-published author or small press can compete.
(3) Advertising. Major publishers can purchase tens of thousands of dollars in national advertising for space in or on a particular medium. Whether it’s the major networks, cable television, national radio, or major magazines and newspapers, the major publishers have the distinct advantage over small presses to spend what’s necessary. They also have the ability to buy multiple spots for a better price. If they know a weekly national magazine is going to be one of their particular advertising mediums, they’ll buy enough spots to cover a large number of weekly editions at one time.
Advertising, whether print, television, or radio, typically encompasses four cities: New York, Washington, D.C., Chicago, and Los Angeles. Beyond that, publishers will, on occasion, throw in a few other major cities, but not on a consistent basis. Rarely do they go more than 12 or 15 cities deep into any advertising plan for a particular title, and the top 30 media cities get the lion’s share of the dollars and activity.
(4) Promotions and incentives. The majors promote books with in-store displays, spiffs, and an assortment of what we call “chotchkies.” The costs of these displays and doodads are far beyond the average, smaller publisher’s reach. Bought in a quantity of up to several thousand, the production costs would be prohibitive for anyone outside the competitive mainstream. Moreover, displays are risky because, outside of the major bookstore chains, there’s no guarantee that the display will get more than a couple of days’ floor exposure. For that reason, efforts to distribute displays outside of the retail chain are often ill-advised.
(5) Publicity. The majors generate publicity at a regional and national level. The competition for daytime talk show spots, primetime newsmagazines, and national magazines and newspapers, is fierce. In the publishing business, publicity—more than anything else—sells books. The publicity departments have the ear of the key gatekeepers to the big media outlets, something virtually impossible for the self published or smaller publishers to obtain. The majors also have the advantage of negotiating one author for another in an attempt to gain a spot for more than one author. They also have the ability to guarantee a major magazine an exclusive interview in exchange for a better price on an assortment of prime ad space. Publishing and media scratch each other’s backs, and they do it extremely well.
What these mean to you. Of the five strengths mentioned, generating publicity is what big publishers do best. An article in the New York Times Book Review will sell many more copies than an ad in the same paper. One six-minute spot on a daytime talk show will generate sales many times over what a consistent media campaign will do. The publishers’ ability to reach out to their contacts and create buzz is how they drive the most business to the book retailers. You may be unsure how this knowledge helps you, but publishers’ weaknesses can be exploited.
Marketing weaknesses of major publishers.
Now for the five areas where major publishers fail in their marketing (1) big publishers tend to ignore any market other than the mainstream traditional marketplace (2) they don’t gather consumer information; (3) they tend not to publish to regional or niche markets; (4) they haven’t yet recognized the Internet’s power and how to market through that medium; and (5) they ignore much of Middle America. These are areas where the major publishers, for lack of time and resources, don’t focus their marketing efforts. Rarely will they spend any time or money attempting to sell small quantities of books; exceptions are out there, but as a general rule, the major trade publishers don’t market in these areas.
(1) Outside mainstream. Major publishers don’t think outside the mainstream retail marketplace. Focusing their energies directly to consumers, or any small group or organization, is way outside the major publishers’ normal channels. If it doesn’t involve an established bookseller, the majors don’t consider it as a potential market for their books. As a result, they won’t devote time, manpower, or resources to thinking of ways to reach those markets.
(2) Consumer information. The second area big publishers fail in is gathering information about the end consumer. Learning more about the people who actually buy books at retail is well beyond their immediate interests. The person who ultimately buys their product is not important to the publishers—they feel that area is best left to the retailers. Remember, publishers understand the demographic of their customer—the booksellers—and that’s their primary concern.
(3) Regional and niche markets. The third failure of the majors is not recognizing regional or niche markets. Publishers publish, then look for a market. They seldom think of identifying a market and then publishing to fill that demand. From the standpoint of major publishers, a relevant market has to demand copies in the thousands, preferably in the tens of thousands, not in the mere hundreds. In other words, they publish to trends in the world around them without regard to whether the market can support sales. Publishers know that trends in culture, art, television, and movies happen quickly and they want to be the first ones with a book on that subject or issue. Sometimes it works tremendously well and other times it fails. That doesn’t diminish the constant search for the latest and best new trend. A trend, however, must reach a certain saturation or tipping point before they’ll take notice. Major publishers fail to capitalize on regional or niche market trends.
(4) The Internet. The fourth area their marketing fails in is the effective use of the Internet. The websites of the major publishers are primarily for informational purposes and not sales. Exceptions exist; some of the bigger trade publishers are attempting to sell books directly to the consumer through their websites but their success has been limited. To the big publishers, Internet marketing means advertising on a bookseller’s website, not utilizing the power of their own website to market or generate sales. Thus, the big publishers typically don’t involve sales or marketing staff in website upkeep, and rarely do they seek website advice from their sales or marketing group. Mostly, publishers are very old school—things are done the way they’ve been done for the past 50 years. They were slow to use computers, and they’ve been slow to figure out how to tap into the Internet’s power. They’ve stepped up to the plate in terms of sales information, but not in terms of the Internet’s enormous power to advertise, promote, or market their product.
(5) Middle America. The fifth and final area the marketing of the big publishers fails is Middle America. In other words, the majors ignore markets outside of the biggest media hot spots. Regional publishing is not in the big publishers’ vocabulary. It boils down to resources. Money and manpower to cover the country are limited, and the majors don’t use those resources to cover every corner of the United States. Instead, their philosophy is to spread as wide a swath as possible and hope it eventually fills the rest of the country, somewhere between New York and Los Angeles.
What these mean to you. Understanding where the big publishers are strong and weak in marketing helps you create a targeted marketing plan that’s based on information, not just blind guess-work. There’s a tremendous amount of time devoted to marketing at most publishing houses. So the more you—as an author—know and understand about the major publishers’ marketing goals, methods, strengths, and weaknesses, the better chance you’ll have of creating a marketing plan that exploits the weaknesses of your competition and improves your chances of selling lots of books.