Until now, advertising in books has made little sense: print runs and therefore reach are often far too low and, above all, it remains unclear when an advertising message will have an impact, which is often very delayed. With the advent of e-readers and e-books, books are now also becoming an interesting advertising medium. Advertising messages can be inserted into an e-book at the time of purchase and are tailored to the buyer. The German Publishers and Booksellers Association has declared 2011 to be the zero hour for the e-book and its managing director can be quoted as saying "2011 will see the real breakthrough for the e-book on the market". How the digitization of the book market, which has so far been largely spared the whirlwind of change brought about by the Internet, will progress is indeed one of the most exciting questions in the media sector at the moment. Many augurs point to the USA, where major booksellers such as Amazon and Bar¬nes & Noble already sell more electronic books than paper books. The American Association of Book Publishers (AAP) reported a 164.4 percent increase in e-book sales in 2010 compared to the previous year, with e-book sales accounting for 8.32 percent of book sales. Key drivers of this development are falling prices for e-readers and the increasing use of smartphones and tablet PCs.
In the upcoming transformation, the book industry will in many ways be able to take its cue from the music industry, which already suffered the fate of digitization around ten years ago. Sales of recorded music have slumped rapidly, with heaps of pirated digital copies circulating in the dark corners of the internet. However, more and more music is being purchased legally online - albeit often only individual tracks and not entire albums. And new online distribution channels have been established, most notably Apple's iTunes. But the music industry is not in ruins - although it has changed profoundly. Important new sources of income are live concerts, which now offer considerably more show elements than in the past. Ticket prices have risen significantly, especially for well-known names. The merchandising sector has been greatly expanded, where it is no longer just a few black T-shirts that are on offer. Clever marketers are making just as much money with expensive limited-edition collector's items as they are with cheap, mass-market fan merchandise of all kinds. It's no longer just about selling music, but a certain lifestyle - with the intention of offering potent sponsors a correspondingly attractive platform.
Just as there are still substantial sales of sound carriers, CDs and vinyl, there will also be paper books with two book covers in the longer term. And today's e-book formats, in particular E-PUB, Mobipocket and PDF, are just the beginning of this development. The future premium edition will no longer just be the hardcover edition, but the book app, which will feature numerous high-quality multimedia supplements in addition to the text. However, such creative and design fireworks will only be considered for potential bestsellers. For the majority of books, it will remain difficult to find enough readers to even begin to make a profit. This is why even authors and publishers will accept new forms of financing such as advertising and sponsorship, who regard books as a noble cultural asset and would prefer to see them untainted by such practices. Like the music industry, the book industry will have a long way to go and will have to change profoundly:
Publishers: New players from outside the industry, because e-books can be produced easily by anyone with the right tools, especially advertising agencies, which will incorporate e-books into campaigns.
Distribution: Heavyweights such as Amazon, Apple, Google and others have long since set out to divide up the electronic book market among themselves.
Authors: Those who think and produce using multimedia have decisive advantages. Equally useful is a talent for self-staging, for example to turn readings into a live experience.
Consumers: Those who pay for their own reading hardware expect significantly lower prices for e-books. Low prices encourage spontaneous online shopping.
This means that in the future, these types of product design, promotion and pricing will be conceivable in the book sector:
Pattern: Free chapters are common in online book stores. Generating at least some income with advertising will hardly be rejected by consumers.
Freemium: Even entire books (for example, just the audiobook version) can be distributed free of charge, financed by advertising, if this increases the prospects of further revenue. Such up-selling can involve the premium edition, which entices readers with desirable offers (from author interviews and competitions to unique memorabilia). This opens up a veritable Eldorado for innovative marketing experts.
Cheap edition: In the e-book market, the possibility of secondary marketing in cheap paperback format is eliminated. Instead, the original premium edition can be brought onto the market at a favorable price with advertising messages using the same principle.
Premium: Even in the hardcover and glossy sector, advertising is accepted if it has a high-quality design and offers clear added value. Sponsors in particular can put themselves in a good light with suitable books (such as special editions).
The full-page advertisement at the beginning or end of the book is still the most obvious form of advertising, especially as many publishers already use this for their own advertising. In the e-book sector, video trailers, for example, will also encourage people to buy the movie adaptation or documentary films in future. Anyone who pays nothing or very little for an e-book will also accept that it has advertising pages between the chapters that refer to third-party offers. It is precisely here that there are opportunities for high-quality offers that are closely and appropriately related to the content. For example, a travel offer to the location of the story or a suitable wine offer. How-to books are particularly suitable for advertising, as the target group is very precisely defined. Anyone reading "Bladder Weakness for Dummies" is unlikely to do so without a specific reason or simply for pleasure and will be interested in references to corresponding offers. Even advertising messages on every page of the book are possible, as long as they are appropriately placed in the margins and do not hinder the flow of reading.
However, things get tricky when such ads are inserted automatically, as is mainly practiced by search engine providers. The text environment is analyzed in order to select the most suitable ads. This often works well, but can sometimes lead to abstruse, if not macabre, results that are far easier to ignore during a cursory visit to a website than in a book. This is exactly the kind of approach that will be used if book publishers do not take the advertising business into their own hands. And this is the most likely future scenario: because e-books involve more effort than revenue for the time being, third-party exploiters (such as Apple, Amazon, Google) will soon come into play, promising a subsidy after all. Even if the additional income generated in this way increases over time, it will hardly be possible to position the book as a high-quality advertising medium in the advertising industry.
Only if publishers now come to the conclusion that advertising financing is a new business model for them and actively invest in its realization will they be able to take advantage of the opportunity that now presents itself. The advertising industry is also called upon to approach the newcomers openly and constructively. This opens up completely new perspectives, many things become possible and new collaborations become conceivable. Particularly in the small Swiss market, low-cost e-books that are supported by third parties can lead the book market into the future far better than the backward-looking price-fixing models that are currently in demand.
Christoph J. Walther
Not from one day to the next
"The idea is tempting," says Dani Landolf, Managing Director of the Swiss Booksellers and Publishers Association (SBVV), on financing books via advertising. He considers this to be a "model definitely worth considering" and can well imagine that it will be used "by certain publishers in certain areas". However, advertising financing on a broad scale cannot be a goal and he is not yet aware of any such example in the public market. There are many small publishers in Switzerland who are watching developments with interest, but are unlikely to be the first to jump on the e-book bandwagon. This is because it is not possible to introduce new production processes, new distribution channels and new billing systems from one day to the next and also to negotiate the corresponding rights with authors. The hype surrounding e-books and e-readers should not be overestimated, warns Landolf, referring to a recent study by the German Publishers and Booksellers Association. According to the study, publishers expect to generate 16.2 percent of their own sales with e-books in 2015. And the book trade expects to generate 9.2 percent of its sales with e-books.