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Industry
Ad Spending Holds Steady, But Media Choices See-Saw
FROM PUBLISHING
TRENDS (MARCH 2001)
As
reports of widespread layoffs ricochet along Madison
Avenue, and billboards still bear Christmas greetings
downtown, the prospect of an advertising biz downturn
has highlighted the fact that book publishers’ advertising
habits — in terms of fact-based, industry-wide data
— remain among the great unknowns of the publishing
business. The problem is, we all mutter, few really
believe that advertising works for books. As big authors
get even more expensive to acquire, bigger and bigger
consumer ad spending promises are indeed a juicy carrot
to proffer. But many feel that the real value of advertising
remains questionable when compared with investing the
same dollars in a good round of price-slashing or a
strong trade campaign. “We all know that advertising
doesn’t work for books,” admits a marketing director
from a major publishing house, “unless you have enough
money to make it significant and repetitive. It’s mostly
to please the author and agent.”
Indeed, book advertising amounts to a pittance when
compared to the nation’s deepest ad pockets. According
to industry tracking figures obtained by Publishing
Trends, book publishers spent approximately $160
million on advertising last year (not including co-op
or Internet expenditures), an increase of some $250,000
from 1999. To put that figure in context, Advertising
Age reports that 1999’s total US business ad spending
was $215 billion. In other words, the book business
accounted for a tiny 0.07% of all advertising spending
in the US last year. And although ad space is generally
getting more expensive, budgets aren’t budging.
The relative flatness of advertising expenses is not
greeted with surprise by senior voices from inside the
trade. All the marketing departments contacted by PT
confirmed that little has changed significantly in terms
of budgets. “Spending is not significantly rising or
falling,” says Betsy Hulsebosch, vp and creative
marketing director of Bantam Dell, a publishing
house whose belief in ad campaigns for books is probably
higher than most. “The marketing focus is continuing
in traditional forms with event-based promotion and
heavy focus on the trade,” she adds. “You really need
to get the booksellers behind you.”
It’s an attitude heartily embraced by the trade’s major
advertising organ, Publishers Weekly. Fred
Ciporen, PW’s publisher, agrees that the
support of the trade is the first step in growing a
successful title, though he’s critical of the ways in
which publishers are using trade advertising. “If book-marketing
could be summed up by one word, it would be enthusiasm,”
he says. “Publishers should advertise once a book is
in the market, not just to announce it. I would be using
the trades to say, This book is making money here, have
you ordered this book?” The problem is, he continues,
that “publishers can measure return better from co-op.
Returns from advertising are hard to quantify.” PW
is holding steady at about 2200–2300 ad pages per year,
though that number is softer than Ciporen would ideally
like it to be, partly because agencies make more money
from advertising directed at the consumer than from
ads aimed at the trade.
But reach for the remote, and you’ll see that level
spending is not true of all media. “There’s a general
pullback from TV,” says Ronni Stolzenberg, who
founded independent marketing agency Launchpad
after 20 years with HarperCollins. That assertion
is reflected in the numbers. Book advertising on cable
television, which was worth over $20 million in 1997,
slipped to an estimated $12 million in 2000, a plunge
of 40%. By contrast, however, ad spending on network
TV increased steadily during the same period, shooting
up more than ten times from $483,000 to nearly $6 million.
(Interestingly, the cable pullback happened immediately:
just one year later, 1998, the enthusiastic spending
was cut in half to $10 million.) Overall, TV has lost
nearly half its book advertising in the last three years.
What was a $38 million industry in ’97 declined to $21
million in 2000, a dip of almost 45%. Why the steep
drop? “TV advertising for publishers is cyclical,” says
Michael Kazan of the Spier agency. “Some
years it’s hot, some years it’s not. While most publishers
are still advertising their blockbusters on television,
they aren’t giving the broadcast dollars to ‘make books’
like they used to. I’m not surprised to see that the
spending is down, especially in cable. Network cable
TV used to be much more affordable than it is now, because
it didn’t have the audience it has now.”
Dabbling
on the Web
Where
then, has all this money gone? Not, it would seem, into
the Internet. While traditional event-based marketing
is being tested on the Web, publishers have shied away
from straightforward Internet advertising. “It’s definitely
not being redirected into the Internet,” Stolzenberg
confirms. “Online money is much more likely to be spent
on author websites and online events. Some money is
going into co-op with online booksellers, though the
fever has cooled in that direction.” Kazan agrees that
publishers are not very serious about Internet advertising,
noting that they’ve maybe got “one tiny little baby
toe wet.” Hesitancy over the new medium seems to be
widespread, perhaps reflecting the way that continuing
embroilments over electronic book editions have been
confounded with all things digital.
Nonetheless, web watchers report that Internet ad spending
from media companies has increased by an average of
125% over the last year, with total online advertising
revenues pegged as high as $12.2 billion. The tracking
firm AdZone Interactive estimated online ad spending
for January 2001 at $1.87 billion, although such figures
have not been broken down by industry. At the very least,
certain publishers are taking a stab at the online audience.
Hulsebosch says that “there is some money going into
online sites such as USAToday.com, NYTimes.com,
and Salon — places where readers congregate.”
Judging by the blank panels marked simply “advertising”
at the USAToday.com Weekend section page, however, that
opportunity isn’t being snapped up by too many.
More often, the Internet’s stickiness factor is its
chief appeal. Laurie Rippon, svp and creative
director of the general books group at HarperCollins,
reports that the company has seen several bestsellers
grow out of well-targeted Internet marketing campaigns,
such as that for Ophelia Speaks, the compilation of
commentary from adolescent girls, which was accompanied
by many online events. But no money was directly spent
on advertising. Rippon believes the Internet is crucial
for targeting specific markets, but, as with traditional
media, there are better and relatively cheaper ways
to spend money. Site-enhancing content such as excerpts
and competitions is generally believed more effective
than banner advertising, for which click-through rates
are decreasing.
With web spending negligible and TV on the wane, traditional
print media have been making out most handsomely, with
the best news for national newspapers. What was a $32
million industry in 1997 was up to $54 million last
year. The Sunday magazines have increased their ad revenues
from books by over 30% from $430,000 to $580,000, while
magazines and other newspapers have held their ground
at around the $50 million and $18 million marks respectively.
“The greatest advantage that newspaper print advertising
offers is timeliness,” Hulsebosch explains. “When we
see action on a title or publicity breaking, we can
turn an ad around swiftly and get a message in front
of consumers in 48 hours. Only daily papers offer that
immediacy.” And as for magazines, some argue that the
$50 million cited above is an inflated figure, because
the numbers do not take into account the many off–rate
card deals that exist. “Magazines are notorious for
discounting most aggressively to the book publishing
industry, upwards of 50–60% off,” says a trade executive.
Meanwhile, network radio is reporting a solid expenditure
of $7 million dollars, back up from $5.5 million last
year, though still down from ’97 and ’98 highs of over
$8 million. National spot radio has also grown from
$1.4 million to $2.2 million in the last year, after
a peak of $2.5 million in 1997.
In the end, if publishers aren’t reaching for the phone
every time they see a “Your Ad Here” placard, it means
two things. Book publishers’ relative prudence in ad
outlays may be a welcome sign in an industry of tightening
margins. But diffidence in the face of a complex and
changing media landscape also means this: Like so many
other things in publishing, advertising remains very
much more an art than a science.
Annual
Book Publishing Industry
Advertising
Expenditures
(Year 2000 Total)
Television: $21
million
National Newspapers: $54 million
Other Newspapers: $18 million
Magazines: $50 million
Network Radio: $7 million
National Spot Radio: $2.2 million
Other: $7.8 million
Total: $160 million
Source: Competitive
Media Reporting and Publishers Information; Publishing
Trends. All figures are approximate.
©2001
Publishing Trends
