In this special bonus issue of The Hot Sheet: the state of the industry: Nielsen’s stats compared to Author Earnings’; a look inside traditional publishing’s digital marketing efforts; at last, an upbeat trend in young male reading; on mindset and success: insights from DBW Indie Author; strengthen your marketing know-how: a roundup of tools and tips; where to find more recaps from Digital Book World.
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The Hot Sheet
Hello, dear readers!

It’s your lucky day: this is a special bonus issue of The Hot Sheet with our exclusive coverage of the 2017 Digital Book World held Jan. 17–19 in New York City.

We hope you enjoy, and please feel free to share this special issue on social media and elsewhere.

—Porter Anderson & Jane Friedman
editor@hotsheetpub.com
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Digital Book World Special Issue

The State of the Industry: Nielsen’s Stats Compared to Author Earnings’

Every year at Digital Book World, a representative from Nielsen is on hand to deliver a keynote summarizing traditional publishing book sales over the last year. Additionally, for the last two years, Digital Book World has welcomed Data Guy—the anonymous analyst for Author Earnings—to discuss findings from scraped Amazon data and offer insights into “non-traditional” sales that aren’t tracked through Nielsen. (A good portion of the self-publishing community doesn’t use ISBNs, making it difficult or impossible to track sales, and of course Amazon isn’t offering sales information, either.)

Together, these two presentations offer a rich source of data for comparison, with the caveat that, while Nielsen is working with actual point-of-sale data, Data Guy is not—Author Earnings reports are estimates derived from Amazon sales ranks, although Data Guy does work with bestselling authors who volunteer their sales data to help improve the accuracy of his estimates.

With that explanation out of the way, let’s take a look at some of the key takeaways from their presentations.

  • Is print really back? For traditional publishers, yes. Since 2013, the traditional book publishing industry has enjoyed about a 3 percent increase in print book sales. However, print book sales grew largely because—according to Author Earnings—Amazon sold more print books. Barnes & Noble’s sales declined by 6 percent in 2016, and sales from mass merchandisers (Target, Walmart, etc.) also declined. But Amazon’s print sales in 2016, primarily driven by their own discounting, grew by 15 percent, which more than made up for the decline in other sectors of the market.

  • Are ebook sales declining? Only for traditional publishers, not for the market as a whole. Traditional publishers saw ebook sales decline by 16 percent in 2016. But Author Earnings estimates Amazon’s ebook sales grew by 4 percent. Traditional publishers are losing ebook market share to the non-traditional market of indie authors, small presses, and Amazon’s own house imprints. Both Nielsen and Author Earnings confirmed that, when looking at the total adult fiction sales of traditional publishers only, about half of all sales are digital. When factoring in the non-traditional market, more than two-thirds of all adult fiction sales are digital.

  • Books without ISBNs account for $550 million in spending. Author Earnings estimates that these books account for 43 percent of all ebook sales at Amazon and for about 24 percent of all dollars spent on ebooks at Amazon.

  • Coloring books are now on the decline for traditional publishers—possibly because of indie competition. Coloring books began to take off for traditional publishers in September 2015 and then boomed in the final quarter of that year. But the last quarter of 2016 saw a 2 million unit drop in December alone. Author Earnings believes that indie authors have stolen away market share because they’ve undercut prices—averaging $6.78 per title versus $11.70 for a Big Five title.

  • One of the genres in which indie authors have established the most strength: African-American fiction. Author Earnings estimates that 71 percent of all units sold in this category are from self-published authors, and 96 percent of all units sold are ebooks. The price differential here is significant, with the average indie ebook selling for $2.76, and Big Five ebooks selling for $12.45.

Bottom line: Nielsen’s Jonathan Stolper, who presented this year’s data, said very directly, “Price is the most important and most influential barrier to entry for ebook buyers, and the increase in price coincided with the decrease in sales.” So there’s no room for argument any longer: Big Five’s increase in ebook prices has directly led to that format’s decline. Any talk about “digital fatigue,” the consumer’s nostalgia for print, or a preference for the bookstore experience isn’t supported by the sales evidence. If print is back, it’s because consumers are unwilling to pay more (or about the same price) for an ebook.

A Look inside Traditional Publishing’s Digital Marketing Efforts

One of the more insightful and rich panels at Digital Book World was “What Sells Books Now: Strategies and Tactics for Modern Marketing.” Panelists included Pete McCarthy of OptiQly (a startup focused on digital marketing optimization), Kristin Fassler of Penguin Random House, and Mary McAveney of Open Road Media.

McCarthy started by laying down the approach that today’s digital marketers must take: once you know your target audience, you start from the bottom of the sales funnel and work up.

  1. First, get the foundation right. Do the right thing “on the page”: optimize the book description at Amazon (and other retailers), get the metadata right, test and improve the messaging on the page.

  2. Then, understand the e-commerce ecosystem. Know the ins and outs of Amazon sales rank, how search works, and so on—gain insights into the environment in which you’re selling.

  3. Finally, analyze the external factors that influence discovery and sales. This includes factors such as Google organic search, an optimized website, social media signals, and so on.

Kristin Fassler, VP and director of marketing at the Ballantine Bantam Dell division of Penguin Random House, said that, previously, publishers could rely on in-store browsability, but now that most sales are online, the burden of driving awareness and discoverability has shifted to publishers. To show how awareness can be generated, Fassler presented a case study of the debut novel Lilac Girls.

The book was launched and promoted with a digital-only marketing campaign, and the team began by focusing on consistent messaging with a branded look, starting with the author platform. (Fassler said that it wasn’t always the case that they would invest in an author’s online presence, but they’re realizing its importance now.) Random House tested many different social media images, and with different messaging, to see which would get the most engagement.

Overall, they were very successful with social media advertising because they went back to see what resonated and performed well, and they adjusted the messaging accordingly. Fassler said, “We set goals at every moment of planning and were honest with ourselves about whether we reached them.”

Also, Random House’s main goal prior to publication was to ramp up consumer reviews, and to that end they gave away 3,500 advance reader copies, partly through a Goodreads campaign. (You can read a case study of that strategy here.)

Fassler said the author was a “rock star” on social media—she was engaging and personal, mentioned specific readers, and made readers feel validated. So they encouraged her to keep going, and that also played a role in generating momentum and word of mouth. As of today, about 225,000 copies have sold.

Bottom line: When Fassler was asked how many titles get this type of full-court-press treatment, her answer was one per season. So while traditional publishers may know some of the buttons to press to get a book to break out, this approach doesn’t yet seem scalable. However, one point made by all panelists is that you don’t need a huge budget to have a successful digital marketing campaign. McCarthy urged, “Make small bets. Run $10-a-day targeted ads, A/B test, move quick. You don’t need a big budget to get a fire going.”

At Last, an Upbeat Trend in Young Male Reading

In a session that gave attendees a good sense of how Nielsen can use its consumer data to look into a sector of the market, Jo Henry, director of Nielsen Book Research, told us something we did know—that children’s books are a leading growth area of the market—and then told us something we didn’t know: boys in the 9-to-12 age range are increasing their market share within the children’s sector.

Some quick points from her presentation:

  • This trend shows up when comparing 2010 to 2016 figures, with an increase in books being bought for boys aged 9 to 12.

  • What books are being bought for boys? Fantasy and adventure.

  • Authors represented in this realm include J.K. Rowling, of course, as well as Rick Riordan, Suzanne Collins, R.L. Stine, James Dashner, and Kathryn Lasky.

  • Interestingly, 64 percent of these books aren’t being bought for boys as gifts; in many cases, they’re being asked for by the boys and offered by their parents.

  • The main discovery method of these books by boys is in-person, usually through spotting a store display or TV ad.

Bottom line: One of Henry’s most interesting takeaways is that Nielsen is seeing a need to influence the child, not just the parent. That’s because a lot of these purchases are made in response to boys asking for the books. Authors and publishers of adventure and fantasy books may want to think about getting the goods into the boys’ faces with in-store displays and television exposure, in particular. It’s long been thought that the way to a kid’s reading habit was through the parent. In this case, it just might be the kid doing the influencing at the cash register.

On Mindset and Success: Insights from DBW Indie Author

The Hot Sheet programmed the third day of Digital Book World, focused on authorship, marking the first time that DBW has offered a daylong author conference. Although the day was designed specifically for independent writers, there’s a lot more crossover going on nowadays, with indies moving to the trade—and vice versa. Industry consultant Jon Fine, formerly the director of Amazon’s author and publishing relations, re-upped his prediction that within the decade we won’t make distinctions between indies and trade authors. And Simon & Schuster’s Judith Curr, publisher of Atria Books, talked of how determinedly her house had made its search for independent authors (led by Colleen Hoover) with whom they could experiment in digital mobile formats that needed self-publishing authors’ readership-engagement savvy to succeed.

Alliance of Independent Authors’ Orna Ross mentioned how crucial a good mindset can be in sustaining the energy and focus needed to succeed. The point came home near the end of the day when we convened a panel of four authors, each of whom is following a different path to publishing success. We asked each author what event had been pivotal in their careers so far.

  • For Leslye Penelope, an indie author who has recently been picked up by St. Martin’s Press on a four-book contract, the catalyst was winning the 2016 Self-Publishing Ebook Award for fiction from the Black Caucus of the American Library Association (BCALA). It was the momentum of the award that turned things around for her.

  • Author Jay Swanson said the discovery of colleagues at a Worldcon—after having self-published from Sierra Leone—“changed my world.” In particular, he appreciated traditionally published authors who welcomed him as a peer. He felt himself to be part of the industry for the first time.

  • Heidi Joy Tretheway was able to mention a specific date: December 14, 2014. She’d been rejected for a BookBub promotion three times, so she decided to run a free promotion on Amazon—for the first book in her series—with a lot of ad buys around it. The sell-through reached 85 percent on books two and three in the same series. “For me it was figuring out the product funnel.”

  • And Katarina Tonks—who writes as Wattpad Star @katrocks247—sees an “absolute failure” as a pivotal moment. She ended up firing her agent, who was unable to sell the first book in her Death Chronicles series. But on the Wattpad platform, Tonks had hundreds of thousands of readers who got her work. “Nobody understood my work like Wattpad.”

Bottom line: For years, the development of the indie sector has meant, for many, a search for set patterns, precise steps forward, a clear path to publication. As the independent movement matures, we now see that the mindset is many mindsets, each representing success to one author in a way that might make no sense for another. Each and every “new professional author,” as our conference phrased it, is unique.

Strengthen Your Marketing Know-How: A Roundup of Tools and Tips

After attending two full days of Digital Book World—as well as programming the third Indie Author day—we heard dozens (hundreds!) of sales and marketing suggestions, as well as strategic publishing advice, for publishers and authors alike. Here’s a roundup of the best takeaways.

  • For influencer marketing: Give influencers editorial control to create content in a way they know their audience will respond to. When getting influencers to talk about or market your content, let them provide their followers with an exclusive discount or free promotion. Think of ways to keep the marketing going with an influencer. Keep them invested. Exclusivity breeds ownership.

  • If you’re running a giveaway (ARCs or free print copies), add a handwritten note so that it seems more special—you’re more likely to get a review.

  • When sharing on social media, the following things work best: images, surprising things, trends, personalization, lists, humor, inspiration, secrets, and insider tips. What doesn’t work: things that make the reader feel like they’re being sold (commercial objects, thumbnail book jackets, standard author photos, reviews).

  • For those with big budgets: To gather better social media insights and identify important influencers, some publishers are using Crimson Hexagon.

  • Helpful and free SEO tools: Pete McCarthy of OptiQly recommended the Chrome extension Keywords Everywhere to help explore and understand the search keyword landscape; the SimilarWeb extension to study competing authors’/publishers’ websites; and Moz’s Open Site Explorer to improve your website SEO and ranking.

  • To quickly develop audience marketing segments or personas: SEO expert Mike King of iPullRank recommends running your email list through FullContact. Then run the Twitter accounts surfaced from that list through Demographics Pro. You can also upload your email list to Facebook Audience Insights to yield measurable segments.

  • For Facebook advertising: Gregg Sullivan of Sullivan + Partners highly recommended using Facebook’s custom engaged audiences for targeting—to show ads only to the people who have engaged with your page or posts recently. Also, he said that, while it’s possible use interests to target Facebook ads, it’s more of a last resort: you have to really narrow the interest audience to end up with an effective ad. He said his firm doesn’t automatically use a book cover when creating a Facebook ad, but rather focuses on a strong visual that evokes the book’s feel and appeals to the target audience.

Bottom line: During one of the last panels of the day, someone commented that the more appropriate name for Digital Book World may now be Data Book World because of the dramatic emphasis this year on data-driven sales and marketing. One of our main takeaways is that traditional publishers are becoming savvy at both digital marketing and direct-to-consumer marketing, and that they have access to enterprise-level software and services (e.g., Crimson Hexagon) that make them more effective than the solo author who rarely pays for or has access to such high-powered tools.

Looking for More Recaps from Digital Book World?

Here’s the best of what we’ve found.

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