ENHANCING BUSINESS PROFITABILITY IN THE BOOK PUBLISHING INDUSTRY THROUGH EMARKETING
By ATTY. DOMINADOR D. BUHAIN
President, ASEAN Book Publishers Association
Head, Philippine Delegation
(Delivered on the occasion of ABPA Forum, Brunei Darussalam, February 27, 2008)
The Vanguard Now: Amazon.com and the Kindle
Twelve years ago, Amazon.com blazed the trail for the book trade by seizing opportunities to sell books directly to the reading public anywhere in the globe through the Internet. The response from the end users and other customers to this pioneering emarketing venture was and continues to be electrifying and very profitable. In one and the same move, Amazon.com erased geomarketing boundaries and went directly to the reader, delivering books within two days of order. This initiative was later adapted to include all forms of the book as we now know them, including journals, magazines and newspapers, CDs, DVDs, talking books or audiobooks, used or new.
Early this month, beginning the Lunar Year of the Rat, Amazon.com launched a portable wireless electronic reading device called the Kindle http://www.amazon.com/gp/product/B000F173MA/ref=amb_link_6). Weighing only 10.3 oz., the Kindle is lighter and thinner than a typical paperback, and has a special electronic-paper screen that “looks and feels like real paper.” Costing $399, the Kindle allows the reader, without the need of a computer, to shop at a virtual library of more than 100,000 digitized books, including 80% of the latest New York Times bestsellers, the most influential global newspapers and magazines, and more than 250 updated top blogs from the worlds of business, technology, sports, entertainment, and politics. The Kindle buyer is helped to do online shopping by allowing him to browse freely the first chapter of any book in the digital bookstore, buy a book for about $9.99, and have it auto-delivered within 30 seconds. Up to 200 titles may be stored in the Kindle. Simply click, buy, and read in bed, on the bus, wherever you are.
The product of at least three years of development, the first batch of Kindles immediately sold out. There is a long waiting line for it.
Emarketing among ASEAN Publishers
The Amazon.com initiative is a big challenge and an inspiration to our publishing and marketing programs. Perhaps it is safe to say that among our members in the ASEAN Book Publishers Association (ABPA), none of us is in that stage of development as Amazon.com. If I am mistaken, I will happily accept correction and updating.
But I am sure that emarketing is no longer an issue for all of us. Its advantages over traditional marketing are well recognized, that it is an extraordinarily fast, cost-effective, and very profitable global marketing method that is increasingly used by the publishing industry in almost all countries where electronic information and communication technology (ICT) is available. Emarketing greatly enhances profitability by tapping the global market and reaching millions of readers/consumers throughout the world at a negligible fraction of what it would cost were traditional publicity and distribution attempted at equivalent magnitude. This means that instead of our small local market and reading publics in our countries, we have at our fingertips a global audience of theoretically about seven billion readers.
Through the Internet, emarketing enables our reading publics/ consumers to share directly with publishers the cost of publicity and distribution. At their own cost, consumers search the world wide web for our products and services that match their needs. Retail sales and payments are quickly effected through ebanking and automated credit accounts.
Emarketing in the Philippines. Since the turn of the millennium, Philippine publishers have slowly began to adopt emarketing as an additional distribution method rather than as an alternative to traditional book displays in strategically located bookstores and human marketing and sales agents.
Doubtless, traditional marketing to schools and academic institutions continues and will continue to be vigorously pursued by the educational or textbook publishers, who are the biggest publishers, even as they utilize ICT to integrate their printed textbooks with multimedia instructional materials packages for schools with ICT facilities. My own company, the Rex Book Store, Inc., started its website, www.rexinteractive.com, to maintain open communication lines with its customers. Our newest corporate entity in the Rex Group of Companies, the Rex Book Store International, Inc. (RBSII), was established in 2005 at about the same time as the organization of the ABPA, with the objective of responding to transactions involving foreign business representatives through co-publishing, outright purchase, translations, and similar arrangements. RBSII as our international arm pursues most of its sales activities through email (sasantiago@rexpublishing.com.ph). Payment forms are usually through checks or bank-to-bank fund transfers. Books are shipped airfreight or seafreight or surface mail.
Emarketing is based on a strong consumer orientation aimed at developing consumer loyalty and increasing patronage. The largest Philippine book store chain, the National Book Store (NBS), started its emarketing activity from an electronic list of consumers that it developed by giving patrons electronic identification cards carrying grant of small rebates on purchases. This buyer list is utilized as a subscriber list for email announcements of new books, best sellers, and a newsletter. This year, NBS initiated on-line book shopping and sales (www.nationalbookstore.com.ph) , albeit dealing with the traditional book form rather than digitized information.
C & E Publishing, which started as a distributor and then reprinter of foreign textbooks, and recently became a publisher of tertiary educational materials, is also embarking on emarketing activities.
Many other publishers and distributors are now building websites. The Book Exporters Association of the Philippines (BEAP) has a website (www.philippinebookexporters.com).
These emarketing activities effectively reduce the supply chain by skipping the typical supply chain and going directly to the end-user, streamlining the overall operation and reducing costs for the publisher.
Digital Publishing
As Amazon.com’s Kindle reader shows, emarketing peaks in a digital environment by breaking physical barriers to the book, including time and space. This may not be an important facility for the publication of books for which huge demand can be initially established and the geographic location of the user readily pinpointed (e.g., textbooks, subscription books, Harry Potter).
Books of limited demand, for which shorter print runs are more profitable, are best suited for digital manufacture. This is now the publishing trend. Smaller runs reduce initial capital outlay, warehousing and other inventory maintenance, and risk. Four years ago, about 30% of new titles printed in the United States were printed in quantities of less than 100 units (200,000 out of 600,000 new titles). It is forecast that in two years’ time (2010), the percentage will rise to 50% of new titles printed in quantities of less than 100 units. Efficient inventory management will help deliver consistent earnings with lean inventories, improve cash flow, lower working capital requirements, and yield fewer returns from booksellers.
Digital Book Manufacture
Printing on monochrome digital print engines has been in use since 1995. Since about five years ago, other associated technologies such as digital color, finishing, and workflow have become available. It has become possible to set content in digital format and to print books using powder toner instead of water-based ink.
Digital book manufacture has democratized book publishing, making it easy, very fast and inexpensive, with little starting capital and little space requirement for traditional printed and bound inventory. At the same time, digital storage of content facilitates immediate reprinting on demand. Small print runs enable authors to self-publish. More authors publish themselves, free from the restrictions and delays of editorial policies and practices and business considerations of traditional book production and publishing, and changing distribution through the Internet. Digital book production is a boon for smaller and specialized publishers.
This is exemplified in the Philippines by Central Books’ Publish on Demand (POD), started by the Sibal Family, backed by their publishing and printing expertise as educational and law publishers for the last 60 years. Using the latest digital printing technology, CentralBooks has published over 200 titles in two years (about three new titles each week) with print runs as low as 50 copies to as high as 3,000 copies, ranging from academic and professional books to literary works, spiritual titles, cookbooks, memoirs, etc.
Central Books POD is largely a service to authors to make self-publishing easy and affordable. Authors provide the content in digital format (MS Word or PDF format) and CentralBooks takes care of registering the work at the Copyright Office, securing the International Standard Book Number (ISBN), typesetting, lay-outing, and designing the book including the cover. A proof copy bound and trimmed to actual book size is ready in three days; production takes seven days from approval.
Should the author so desire, CentralBooks sells the author’s book nationwide through its eight strategically located bookstores. CentralBooks has taken the POD process further to Books on Demand (BOD), through which CentralBooks will automatically reprint books and re-stock their stores as the need arises so that books are never out or print. Authors receive 70% of the gross margin as royalty and maintain full control of their publication.
Other established Filipino publishers especially scholarly and specialized publishers are going into digital book manufacture for its advantages. Some may eventually drop traditional manufacturing processes.
Needed: ABPA Website (www.abpa.com)
Through the courtesy of various international book fairs in Asia (Taipei, Seoul, Hong Kong) and common courtesies in Southeast Asia, ABPA has held joint exhibits since we agreed in Kuala Lumpur to organize our consortium in Manila in August 2005 in recognition of our mutual interests and common aspirations for our trade and our respective peoples. Through ABPA structure and projects, we have become not only acquaintances but regular email correspondents, co-publishers, and prospective partners in various joint endeavors. It is now time to move forward to establish our regional identity and trade by opening communication lines not only amongst ourselves but with our expanding publics not only in the ASEAN region but also in the global community. Let us together develop our emarketing program at regional level and help our members develop and promote theirs at national and company levels.
Our regional website can serve us as a distribution channel, as marketing and publicity sites, and to link visitors to our member country sites and our individual companies. Linkages are readily forged through ICT.
ABPA has formed the ABPA Website Development Sub-Committee under the chairmanship of Philip Tatham.
Implications of Digital Publishing and Emarketing
The World Wide Web is testimony to the information glut of our time. It is a humongous jungle of information like the forests of the Amazon. Aside from millions of digitized books in the public domain, online journals, newspapers, and magazines, and websites, the web contains forums, logs, multimedia, source codes, email, maps, etc. It can be entered through mechanisms like Google, Yahoo, and the other search engines, of which there are many types, searching for content/topic and information type.
There is heavy traffic along the information highway. Each month, over 2.3 billion searches occur on Yahoo alone! A cursory search for information using the keyword “ABPA” on Google Philippines yielded 1,800 items, many of them irrelevant to our organization. Google search for “emarketing” blogs alone gave 493,051 results in 36 seconds.
Digital publishing and emarketing open new issues for the publishing industry, among which are copyright, customer privacy and protection, the control of search engines over materials that may be accessed, and the rapid and continuous evolution of networking and technology.
Copyright
The Internet is synonymous to open access and the world wide web to free information retrieval and not only that, but also to free creation of information. The right to information so ardently desired by peoples everywhere has suddenly assumed a wanton dimension that is antonymous to historical suppression of information: the irresponsible freedom of anonymous sources to misinform the world through electronic media. There is not only threat but also rampant violation of copyright as private property with economic rewards and moral rights for the social task of pursuing the truth.
Search Engine Optimization
The resources on the Internet can be found via keyword searches via search engines, among which Google and Yahoo are the most popular and indeed useful especially for lay interest in the areas or topics searched. The mechanisms use elaborate algorithms for ranking the keywords that are retrieved for the purpose of reducing the jumble of results by displaying the most “relevant” items first (Mann, 2005:115). The arrangement of website results is very crucial to the profitability of emarketing.
Advertising on the Web
Search engine control over the Internet is powered by digital advertising. The software giant Microsoft has bid $41.8 billion for the web pioneer search engine Yahoo to enable it to integrate Yahoo’s advertising platform and create a digital advertising powerhouse to rival Google (http://news.yahoo.com/s/nm/20080215/tc_nm/microsoft). Google holds the lion’s share of an online advertising market projected to grow from 45 billion dollars globally in 2007 to 75 billion dollars in 2010.
Online advertising on Google (http://adwords.google.com/select/Login?hl=en&sourceid==awo&su), Yahoo (http://sem.smallbusiness.yahoo.com/searchenginemarketing/advertising) or any of the search engines may appear using one of the keywords next to matching search results, to an interested audience. People can simply click the ad to make a purchase or learn more about the advertiser. Google or the chosen search engine even helps create a webpage for the advertiser. Further, analytics service of the search engines helps the advertiser learn more about where their visitors come from and how they interact with the websites. These analytics are the basis of “pay per click” advertising arrangements but the advertiser can use such information to improve online results through the writing of better ads, improving marketing initiatives, and creating higher-converting websites. Google analytics is free to all advertisers, publishers, and site owners (www.google.com/analytics).
An advertising campaign online through the search engines should observe the following pointers:
- Target customers by geographic location
- Strategically chosen keywords related to publishing business
- Specify a daily spending limit for advertising and set a maximum cost per click
- Create ad designed to attract target audience following search marketing best practices
- Review and activate ad
Social Networking
Customer behavior in the internet is very volatile. The magnets that attract customers to web sites change over short periods. At the turn of the millennium, search engines were very dominant. Two or three years ago, social networks (MySpace, Facebook, etc.) became the most popular sites, beating even Google in the number of visits. These sites are now more popular than search engines like Google or Yahoo and will become more versatile as social networks go mobile on cell phones with new business applications.
An alternative approach to surfing the web but skipping the time-consuming browse of the hundreds and thousands of websites is presented by the RSS (Rich Site Summary) format for delivering regularly changing web content. RSS solves the information glut problem for frequent users of the web. It retrieves the latest content from the consumer’s favorite websites. Aside from saving time by not revisiting each site individually, RSS makes it unnecessary to join the various sites’ email newsletter, thus and ensuring the customer’s privacy. RSS feeds are offered by RSS Feed Readers and News Aggregators, including a number of web-based feed readers (www.WhatIsRSS.com).
Superior Customer Service
The publishing industry must continue to follow its customers. Customer behavior has changed and continues to change and publishers need new skills to follow customers wherever they go, whatever they want, and however they get to the books that they want to read.
Consumer protection. Globalization of trade entails global responsibilities to the consumer. Mechanisms for ordering, billing, and payment options for online shopping should ensure security of cash and goods delivery. High international sales are not attained due to the fact that, in most cases, payment options may not be suitable for customers. The online payment systems differ in different regions/countries. We should start in our own countries and region.
We should know and respect the rights of the consumer. We must be aware of local, national, and international laws and legislation that safeguard consumers. The European Community has supported the development and implementation of the United Nations Guidelines for Consumer Protection (http://consumerinfo.org.ua/en/must_know/articles_rights).
An important ethical aspect of emarketing is privacy of the consumer, involving the use of consumer information for purposes other than that authorized by or known to the customer.
At the same time, we must be aware of all laws affecting our intellectual property rights.
Conclusion
Many of us who have been publishing since the days of the letterpress and line of type have been slow to switch to the photo-offset and slower to click on to electronic publishing and emarketing. But there is good money to be earned fast by publishers who are alert to rapid ICT revolutions and quick to the draw in emarketing.
The combo of digital printing technology, electronic publishing and the emarket brought about focal changes in the book publishing industry: the ascendance of (1) small publishers – the self-published author or group of authors or the creator/source of books/knowledge and (2) the reader – the end-user of that creation. These two are at the beginning and at the end of the one publishing chain – in this case, a very short, two-point publishing chain. Emarketing is the ultimate profit maker for publishers in this day.
However, the world wide web, which is now the operation center of the emarket, is already a global red ocean for publishers. Their consumers have to navigate this vast sea of information guided by powerful search engines that have increasingly become fueled by advertising. The overload of reliable and unreliable, relevant and irrelevant information online has driven customers to rapidly emerging, customized social networks that will soon directly link mobile communication technology with the market on the internet and at large.
The pacesetter in electronic bookselling, Amazon.com, has provided the escape route from the internet through the platform of the portable bookstore.
Publishers in the ASEAN region and beyond the region need to work together to face the challenges of digital information: violations of copyright as private property, search engine optimization, volatility of consumer behavior, and rapid ICT evolution fueled by the technological rat race.
Thank you for your attention.
