Publishing Trends

Industry Ad Spending Holds Steady, But Media Choices See-Saw

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.

(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.