The relationship between publishers and readers continues to evolve at a bewildering speed.
It could be argued that until very recently publishers had almost no relationship with their readers at all. The entire supply chain of the publishing industry was set up around a premise that essentially ignored the end user (the readers) and mistakenly identified the means of distribution (the booksellers) as their key relationship.
The rise of online bookselling and digital delivery changed this distributive necessity at the heart of the publishing supply chain. For the first time in almost 200 years, publishers had the opportunity to deal directly with their customers. Sadly, it was an opportunity that few grasped until very recently.
The same could not be said for businesses like Amazon and Apple. Above product design, above technology, the real genius of these companies was to realise the thing that really matters in the online retail space is their relationship with their customers.
Own the customer. Own their credit card details. Own their order history. Own the space.
So, what should publishers do now to re-establish relationships with their readers and secure their future in this new retail landscape?
I’m going to concentrate on the issues that I’ve been working on for the last couple of years: publishing in verticals and utilising 'big data'. #PublishingBingo #YoureWelcome
It’s unlikely at this point that a traditional publisher (or group of publishers) is going to invent a retail platform that will rival Amazon or iTunes. Which doesn’t mean that it’s time to shrug our shoulders and carry on down the road our industry is on at the moment. There are still plenty of opportunities for publishers to engage with their customers and allow their businesses to evolve if they begin to make some sensible strategic decisions.
As Douglas Adams very nearly said, “The web is big. Really big. You just won't believe how vastly, hugely, mind- bogglingly big it is”.
To succeed in the online retail environment businesses have two options, often presented as either/or but which I believe are complimentary strategies and should be approached in parallel.
(a) Build something that attracts people to it.
(b) Go where the people already are.
The simple truth is that building something takes a lot of time, a lot of resources, and there are many bear-traps along the way (Anobii anyone?).
That doesn’t mean that publishers shouldn’t aspire towards creating their own destination sites and eventually owning the means of distribution (and their own customer data). On the contrary, that is exactly where I think they should be headed. The key is how to do that? How do publishers define realistic, attainable goals in this space and how do they achieve them?
And this is where utilising 'big data' and publishing into verticals comes in.
Simply put, verticals are subject or genre defined categories into which publishers can easily group their titles.
Marketing 101 - segmenting your customer base into smaller, more manageable categories increases the targeting and effectiveness of any subsequent marketing campaign.
To illustrate this let’s use an example you’ll recognise - Amazon.com
First off you need to grasp that Amazon is not a bookstore. It’s a retailer. A very successful retailer that happens to sell books.*
*In 2011 only $17.8 billion (37%) of Amazon’s $46 billion turnover was derived from 'media' (books, music, movies).
Jeff Bezos did not set out in 1994 to create a bookstore - If you think that you hugely underestimate his ambition and his achievement. (Actually, if you DO think that, meet me after school, I’ve got some magic beans I’d like to swap for that cow of yours).
Bezos set out to create an online retailer. He used books as a Trojan horse, identifying the supply chain of the publishing industry as the one most ripe for disintermediation.
In other words he identified “book buyers” as the vertical most likely to deliver him the customers (and crucially the customer data) that would allow him to subsequently expand into the more general retail space. By concentrating on one single definable vertical (book buyers) Amazon successfully gained the foothold in the online retail space that enabled them to become the leading online retailer in the world.
In a similar way, publishers, instead of setting out a grand vision for building the biggest book related destination site in the world, should set themselves smaller, more attainable goals.
I’ve spent the last couple of years working with huge datasets of upwards of 500 million data points per month derived from web traffic and visitor behaviour. The models involved in tracking and analysing these huge datasets are unbelievably complicated. The information that can be derived from them, however, is invaluable for tracking the movement of ideas, desires and trends across the web.
When dealing with datasets this large, patterns emerge and form and dissipate in ways that seem totally random but on closer inspection are almost entirely predictable.
The best way I can describe this seemingly random but predictable behaviour is for you to imagine each data point (each web visitor) as a single starling in a huge flock of birds on the wing. If a camera zoomed in on each individual bird it would appear to move totally at random but if the camera pulled out you’d see the whole flock move through the air in one apparently smooth choreographed movement. If you know where (and when) to look you can see these flocks begin to gather in small groups, which join into larger groups, which in turn form into even larger groups, again and again, until the flock takes on a critical mass and begins it's ballet.
Exactly the same type of behaviour applies to web traffic - with the right tools and the right expertise it is possible for publishers to discover where these 'flocks' gather, what their triggers are, when they take flight, and for how long.
Some forward thinking publishers (Osprey, Sourcebooks, Constable & Robinson, F+W Media and the like) have already begun to segment their lists into easily definable verticals. The next stage is to target the consumers who inhabit those verticals and to do that they will need to have strategies in place to leverage the market intelligence derived from 'big data' by using modern marketing techniques such as SEO and social media management.
Publishers who master these skills will be able to target where the audience already is instead of trying to tell the audience where to go. They will be able to position their websites, communities and social media campaigns in the right place and that is often half the battle.
Put simply, if you want to watch the flocks of starlings flying around Brighton pier at 4pm every day - there’s no point going to Eastbourne at 11am.
Publishers who understand this, learn how humans move around the web and learn how to exploit this market intelligence have at least some hope of building a direct relationship with their readers again.
Chris McVeigh is based in Los Angeles where he acts as a business analyst advising media and technology companies on opportunities in the publishing sector. He is the founder ofwww.FourFiftyOne.co.uk and www.SeoForBooks.co.uk
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