Peter: Hello and welcome to episode 10 of the Corporate Digital Marketing Podcast. I’m your host Peter Applebaum and today we’re speaking to a Senior Executive from a very different industry compared to our other podcasts. And that’s book publishing. Publishing, as you know has gone through a massive upheaval over the last 10 to 15 years or so probably up there with the music industry as to how digital has impacted on it dramatically.
The gentleman we are going to speak to said I’m not really sure if you want to have me on your show Peter because I’m a little cynical about all this digital stuff. I said, Jim, perfect you’re just the person we want to speak to because we’re not talking about all the wonderful and positive things and roses and rainbows and unicorns on this show. It’s really about what is practical and what works in the real world and obviously not everything is going to be positive and not everyone is going to have this incredibly ‘it’s digital and it’s the best thing since sliced bread’ type of opinion so we welcome all types of angles and opinions and perspectives on the show and I think it’s very important for you as the listener to understand that this is the reality and you’re not going to have necessarily everyone who’s going to be completely on board within your organisation. So hearing from Jim I think you’ll agree, is something that’s very worthwhile so we’ll take you to the interview.
Peter: Another episode of the corporate digital marketing podcast and yet again we have a fascinating guest. I’d like to welcome Jim Demetriou who is the Group Sales and Marketing Director for Allen and Unwin book publishers. Jim, welcome to the podcast.
Jim: Thanks Peter and thanks for having me.
Peter: I’ve known Jim for quite some time. Actually we went to university a long time ago which is why both of us have, I call us silver eagles because we both soar and we’re both silver.
Anyway, we want to better understand what has influenced you and briefly what your background is that has lead you to the position you’re in now. For example, how long have you been in book publishing?
Jim: I’ve been in publishing for about 20 years in various roles like marketing and sales roles. I was Chief Operating Officer for Harper Collins for a few years, so in those sort of fields like sales and marketing across those years. Before that I was working in food manufacturing so I worked for Mars Corporation again in sales and marketing roles a long time ago. I was working in FMCG and recently, for the last 20 years in publishing.
Peter: So you must have seen some incredible changes in those 20 years.
Jim: Lots of changes. The whole fragmentation of the media landscape is probably the most dramatic change that has happened. It used to be a lot easier in the old days. All we worried about was above-the-line marketing, below-the-line marketing and that was about it and you could spend your media dollars either above or below the line and you knew what you would expect from those spends and then you can sort of monitor that sort of spend in a certain way and you could set certain goals and you could judge yourself against those goals.
The landscape changed 15 years ago primarily for us and publishing in particular in the digital landscape changed all of that with the fragmentation of the media has seen a whole new range of ways people go about promoting their products. That’s what we have to face today and that’s one of the biggest challenges these times that we face today’s market with that fragmentation of the media.
Peter: So one of the questions I’m going to ask you as I ask every guest is where do you think we’ll be in 5 years time and we’ll keep the listeners in suspense this time. But if you were to join this industry today and let’s project that 20 years into the future and I know that’s like aeons away, in the publishing industry given the changes that you’ve just seen over the last 20 years, where do you see someone will be sitting in 15 – 20 years even in 5 years time if they are in publishing in the marketing sense and holistically?
Jim: I think it’s interesting because the publishing industry has been incredibly robust and has sustained itself over last four years given the amount of disruption there has been, publishing stayed fairly stable. There was a big correction back in the end of 2008/2009 with the GFC, that’s what changed things around a bit, but it’s been fairly robust and fairly stable.
So I think in 20 years time publishing will still be here as a business. People will still want to read books and read long form so I don’t think that’ll change but what will change is the way we promote books. That’s changed in the last 5 years and it will change in the next 5 years. In 20 years time who knows how that happens but I still think there’ll be an industry. Books have been around for hundreds of years so I don’t think that’s going away anytime soon but the way we promote, the way we publish the books will change but I think there’s a future there for the written word and and particularly in print as well. The advent of ebooks didn’t kill the industry as it was feared back 10 years ago. Ebook is just another format that we use in publishing books. So I think holistically there will still be publishers, there will be fewer publishers and more rationalisation but the industry itself will still be around.
Peter: There’s been a lot of talking about Amazon coming to Australia and I guess for you and the book publishing industry it’s like, big deal. You’ve been working with and dealing with Amazon from the start.
Jim: Well, we haven’t been dealing with Amazon in Australia. Amazon is going to be a big challenge for a number of retailers in particular in Australia. Just to give you a background: Amazon in the US and the UK represents about 50% of publishers’ business if not more across ebooks and physical books. In Australia it represents zero of our business because they are not here. They don’t buy any of our books in Australia, so we are fortunate in some respects because we’ve got so many other retailers to play with in this market and none of them have a dominant share. So we’ll see what happens when Amazon arrives and see what sort of market they take from here so that’ll be an interesting thing.
My view is that they will take some share but they won’t be as dominant as in the US or in the UK mainly because people have been established here for a long time. There are a number of online players here already that have a good market share. They will lose some of their market share to Amazon but I can’t see Amazon taking on 50% of the market as they do in the US and the UK. But they will take some market share and they will damage some of the bricks and mortar retailers. I think we are going to see a decline in the number of bricks and mortar stores that we’ve got in Australia as the same in the US. It has already happened but I don’t think it will be as severe as in the US and the UK.
Peter: What is Amazon doing right since they were established in 1995 – and we are talking strictly in the book publishing here? What have they done right that they got 50% of this massive market?
Jim: What they’ve done right is they are taking the consumer as their centerpiece. Everything is about their consumer and their customer and to deliver value and service to these consumers. They always had that at their centre of their business and they’ve been able to just create this wonderful circuitous loop of providing service, quality and price to that consumer and it’s been able to generate this great loop so they are getting customers back again and again. And using Prime was a sort of a master stroke from Bezos to help create that loop. Their business model was we’re working to make a lot of money for a long time but we create this loop and we’ll get customers back again and again and again.
Peter: Can you please explain what Prime is?
Jim: So Prime in the US is a service people are subscribed to. It’s $99 in the US and it guarantees customers 2 day delivery and free delivery of anything that they buy from Amazon. You don’t pay a fee for delivery every time you buy something instead you pay the subscription fee and they guarantee you 2 day delivery in the US.
Now, whether they do that in Australia we will wait and see. They can’t do that from day one. They’ll be here at the end of the year or early next year and we’ve been talking to me already about setting up in Australia and whether they introduce Prime initially or not, I’m not sure They won’t let me know and they won’t tell us about that.
Peter: I’ve got friends in the States and they say that they buy everything from Amazon. Anything from razor blades, toilet paper, groceries, everything. It does make up a substantial – certainly far from a majority – but still substantial share of the overall retail sales in the US.
Jim: It’s massive. 60% of the people in the US have a Prime membership. More people in the US have a Prime membership than have a landline at home, that’s how big it is. And they took the concept from Costco who have this membership concept to bring people back again and again so it’s a great driver for them.
Peter: I think we’re going have marketers listening to us today, Jim saying “well that’s Amazon, this multi-billion dollar organisation, but how does it work for us? We’ve got this product around for 10 or 15 years or a brand that is maybe not as relevant as it once was.” Perhaps we as marketers and beyond being a digital marketer, we can learn from Amazon’s example if we focus on the customer and put them at the centre of every decision we make and give them the best possible service that we can. That could really gives us longevity.
Jim: Absolutely. I think if you are focused about the consumer and everything that you do has a focus towards the customer I think absolutely. It depends on the product you’re selling but if it’s FMCG if you can create that cycle that people are coming back again and again to your product and you can increase that groupset that is buying your product because you are able to give them what they want and they get the service, the quality and the price right, absolutely. I think we can learn a lot from what Amazon has done.
Peter: And it’s a real shame that not many marketers have taken that on board and we’re both former FMCG marketers so I certainly know exactly what supermarkets are doing here and with shelf positioning and all that sort of stuff. And we saw in recent times that Woolworths has deleted several Mount Franklin lines and they have stocked their own or cheaper brands because water is water if you will and the frustration I have with a lot of FMCG marketers is that they don’t get exactly what you’ve just said.
Jim: And there’s a huge threat to FMCG big brand coming particularly when you look at the Amazon examples where they control the retail dollar so much and they can direct you on what you want to buy, particularly on generic lines. I think we are seeing that here, too with the homebrands of Woolworths and Coles.
So you need to really established that value proposition for your product to cut through the retailers being able to dictate what their customers are buying. So if you create that value you can in some respects move around where the retailers wrecking their customers to buy things and it’s even more important these days where you need customers to come in and to request your brand and not be sort of directed to buy homebrand or an Amazon brand or a Costco brand.
Peter: It goes back to who owns the customer and if you are selling BBQ sauce or bread, Coles owns the customer or Woolworths or IGA. And it’s a great weakness for the FMCG manufacturing model. I always look at FMCG and I think why aren’t they doing it? They are among the biggest advertisers in Australia and around the world for that matter but they are not forming those direct consumer relationships.
Jim: And that’s the same situation with book publishing. We use intermediaries, booksellers, department stores and we use online guys. We didn’t own that customer relationship and that’s what digital provided us with – that opportunity to create a direct relationships with our readers and that was the big prize with digital when digital came along 15 years ago. Particularly from a publishing point of view we didn’t have that ability to create that direct relationship.
It was with the likes of Borders and Dymocks that owned that relationship with the customer. So digital gives us that opportunity which sounds wonderful. It sounds fantastic but how do you then convert that, that’s the challenge as well as how do you create that relationship and keep it going?
Peter: And I guess the challenge that you have is that people don’t have a relationship with Allen and Unwin.
Jim: They don’t. I think for entertainment businesses, books, music or films, people are buying the title, the product or the author but they’re not buying Allen and Unwin. There’s very few brands in publishing that sort of have that clout; Penguin classics but that’s about it. DK or Lonely Planet are very few examples of that. But customers are not buying Allen and Unwin.
They will come to our Facebook page to engage with us, but they want information about products and about authors. The other line of who owns the reader is that our authors also have their own online presence so we’re in some respect working with the authors when we’re promoting their books with them and their own audience. So that’s a really good way of getting to our readers without having to have our intermediaries control the relationship but there’s huge challenges involved in that and a lot of that’s is about the noise, about the channels that we use, it’s about how many people are engaging, it’s about the message that you sent through social and it’s about the fact that we’re not pushing a brand as such, we’re selling 20 new books a month and each month we are going to new things. We don’t have the time to build that brand all the time each month as the big FMCG companies do. So it’s about getting the message about that book and the author out there quickly without being too aggressive on the sales pitch because that turns people off. It’s all about the type of message that we use in the different channels that we use.
Peter: 20 new brands a month! So anyone sitting at home or in their offices or in the car listening to this podcast thinking I have to market this brand that’s been on the market for x years; consider Jim and his team and the challenges they have. They have 20 new brands a month that you’ve got to market.
Jim: Yes, absolutely. Some of the titles are big so we have major social media campaigns and we’ve got the authors that have their own platforms or their own community that we can tap into which is good. And then we’ve got probably 10 titles a month where the audience is smaller and the authors don’t have any social profile so we are not using it. What we’re doing is tapping in to a reading community we’re trying to build up.
We know that readers spend a lot of time on online searching for new books. They use Google for search. 80% use Google and half of them use social to discover and find new books and research new books.
Peter: Are those stats based on quantitative research you’ve done?
Jim: It is. We’ve surveyed 3,000 people who read at least one book per month and that came back to 50% use social to discover and research new books.
Peter: And 80% use Google which reflects general consumer behaviour.
You talked about huge challenges for the industry. What are those challenges and opportunities? You touched on that a bit but what are the opportunities across the board? And taking the digital changes into account as well.
Jim: I think the opportunity is to orient the business towards digital as a total business and I don’t just mean social. It’s about making sure that everything that we do helps us in the digital world. From helping us with SEO and having proper meta data then that flows through to working with retailers to allow our books to be more prominent on their sites and to expand our social platforms.
Having everyone in the organisation geared towards those things, that’s an opportunity there because we are talking about an industry which is quite traditional, it’s been around for a long time and it’s a mature industry. We don’t have a lot of new people coming into the business so it’s not hugely dynamic in terms of turnover and staff and new blood coming through. So there are some limitations in and roadblocks in moving towards sort of a total digital framework so those companies have the consumer at the centre and have everything orientated towards that consumer through digital platforms and digital content will thrive. I think that is an opportunity.
And that also then moves into what sort of publishing that you create. In the last 5 years in particular we’ve seen a lot of publishing orientated towards people. Publishing people have huge social media profiles and that’s an opportunity. The people that publish have great social media networks or platforms. A good example of that is there’s a fitness guru out of Adelaide, a young lady called Kayla Itsines. She’s got 6.2 million people on her YouTube channel so she’s already got platform built there and publishers have seen that as a way of acquiring content.
Peter: Jim, you’ve completely blown this discussion out of the water. When we first spoke you said I’m not a big fan of digital and so on. But you’ve got all the terminology and the jargon going on; what’s the story?
Jim: You employ a lot of young people and that infects you.
Peter: To that point, is there across the board support within Allen and Unwin for digital initiatives? It sounds like there’s support from you at least!
Jim: There is support because we know our consumers, in particular the ones on digital platforms. They are discovering stuff, they’re researching books online so you have to be there. I know how effective what we do in those platforms is. I find it difficult to have a straight measure of how we do this. I’m responsible for the revenue for the business so it’s about ‘does it affect sales and will I get a sales result out of it?’. That’s my measurement but there’s certainly other measurements that you can use in digital and they’re important but for me ultimately it’s about the sales and if our social activities generate sales.
Peter: Do you use the same measurement for other forms of marketing expenditure?
Jim: Again, I use my measurement in sales. If I do an outdoor advertising campaign I will want to measure that night and I’ll compare it with a previous campaign that we’ve done and measure the sales result there. Is it effective, can we point to a cause and effect relationship? No. We don’t sell directly, we use intermediaries like the FMCG guys. We don’t close the loop in our promotional campaigns, we don’t sell directly to consumers so I can’t say I’ve done this social media campaign, I can’t say I’ve done that posting, that ad and I’ve directed people to buy my book on my site and I can measure it. We don’t do that. We sell a little bit off our website but it’s not the primary way of sales.
Peter: What percentage of your marketing budget would be dedicated to digital both from content marketing, staff, paid advertising?
Jim: I’d say overall now it’s about 30% of our promotional budget.
Peter: That’s a lot of money when the boss is not particularly sold on the fact that you’re not spending x to get x plus y.
Jim: No, it’s a big part of our budget but we need to be there because our readers are there but also there’s an expectation from our authors that we’re engaged and that we can leverage their communities. A big part of what we do is leveraging and really we’ve got to amplify the message that they’re sending so we’re trying to use their platforms and their social media audiences to expand a message when they have a new book out. So we can’t ignore it. Sometimes I’d like to because it’s so confusing and there’s so much jargon that is flying around.
Peter: I just want to chunk down a little bit when it comes to your partners. Obviously you are going through an intermediate model and they, too have their own digital platforms. So in a way you are kind of diluting your ability to sheet home to the fact that I sent out an email to our audience or the fact that Booktopia send out an email or put a post on or did an author interview or of those types of things. That’s a whole range of different knock-on effects.
I’m really trying from a prescriptive point of view to understand – speaking to a senior sales and marketing person who is responsible for revenue for an established organisation – how can we delineate or how can we say that a) you’re not sure about the results the digital delivers and b) obviously your authors or your readers expect this and that’s fine, but why would I as a Marketing Director listening to this podcast say, well, he is spending 30% of his marketing budget and he still doesn’t know if he’s going to get anything. But working in with your intermediaries and yourself and your authors can’t you at least get some type of sense that you are getting a return from digital?
Jim: On certain books we can and we get a sense so I can measure it but overall it’s really difficult to do that. It would be easy for me to say we do get a sense for that and we know what we get out of it but I don’t have that confidence. There is a level of engagement that we get from our readers which is measurable in certain respect but not measurable by sales. It comes back to ‘do I sell any more books?’ I don’t get that sense every time we do a social media campaign that’s happening for whatever reason.
Peter: We’ve got a Marketing Director listening to you and he is thinking of getting into digital and listening to this guy from Allen and Unwin who is spending 30% of his money and he is not sure what he is getting back, why would I bother? What would you say to him or her?
Jim: You need to be there and you need to be involved. Secondly, you need to be pretty clear what your objectives are and what you are trying to achieve by it. Have really clear goals on what you want to achieve. Now that may not just be about sales, it might be different metrics and whatever language you want to use. I think that’s clear and you need really good measurement tools, you need to have really good dashboards to work out ok this is what I’m trying to achieve. How would I be able to measure it and then you can work out over time I’ve done this and this is the result that I’ve had based on what I’m trying to achieve and that’s why dashboards are really important and then you can change your approach accordingly.
I would say that’s what you do and that’s how you go about it. You can’t begin to walk away from it, it’s a fact of life and because traditional media is declining in its effectiveness you’re looking at spending money somewhere and digital allows you to get to an audience whether it is effective or not depends on what you are trying to achieve.
Peter: Well, to that point you have to spend your money in digital. How about those organisations and executives who have made that decision said we get that, we need to invest in digital; the next question is where, how and how much?
Jim: That’s where I found that it’s really hard to navigate all of that. You need to bring people in the organisation and have a digital strategy. I would get a call once a week from a Digital Strategy Company which wants to do our business which is fine; there are lots of them out there. A good one is Tick Yes.
The landscape changes all the time and you really need to be on top of it all. So you either do that by employing people that exclusively are on social or digital and they can continue to be updated and informed and educated about what’s going on or you bring in Digital Agencies that you can trust to keep you up to date with what’s going on.
So in terms of your answer about where do you get and what you do, it’s difficult unless you have the right people in place to help you navigate. That is quite difficult, there’s just so much happening in so many different areas and the platforms change and there’re new platforms coming on board. Facebook and Google change their algorithm and you need to know that and what effect this will have on what you do. We had to change our entire Facebook strategy because Facebook changed their algorithm.
Peter: So, what organisations do you think do digital effectively?
Jim: I think some of the retailers are doing it well and we mentioned Amazon earlier. They have an advantage because they can begin close to the loop and they’ve got a good way of getting to consumers and a huge database. I think people like film companies, they are doing it great with digital and social and they have the advantage because they have great content. They’ve got films, their blockbuster movies and videos which are really important for social. People want to know what the next blockbuster is.
I also think my local pizza shop has really gotten into it in a great way. They got this little community, they work it really well. It’s only small but they’re active and they’re always busy and they’ve got a good product but they got really good engagement. So from a small level, they work really well.
Peter: And have they made more money from the Demetriou household because of their digital campaigns?
Jim: Absolutely, I get my “It’s your birthday, Jim” email from them once a year. They engage really well, they got a nice tone and good language so I think it’s on the right level.
I think in terms of publishing there isn’t anyone else in Australia doing it that well. We do it as good as anyone else and publishing is doing it great. There is a couple of specialist companies, one is called Open Road in the US and their businesses is totally digital, totally ‘e’ from day one. They’ve been around for about 8 years now and from day one they established a really good following online, good social, great email database and they segment their market really well. I think for publishing they are that sort of the leader in social and digital marketing.
Peter: And they are growing…
Jim: They are not growing, they are selling ok but the problem they have is that they’re selling ebooks only and they acquired a lot of old ebook rights. Remember, ebooks have only been around for about 15 years. Before that authors also didn’t have ebooks within their contracts so there was no contract and there were no ebook rights. So this company was set up to buy all those rights from old books, what we call backlist. That’s all stopped now, they have got everything that they can acquire and people aren’t just publishing ebooks for them.
Peter: And the rest of the industry is caught up and they’ve cottoned on.
Jim: And they’re getting ebook rights when they buy new books. What they’re doing now which is interesting is they’re selling their services to other publishers. They’ve got this fantastic network of readers and now you can tap into my network for a fee.
Peter: Ok, final question Jim, and I’ve loved this discussion and could speak for another couple of hours but we’re all busy, especially the people who are listening to us. So what are the top 3 tips you would give other marketers who are interested in succeeding in digital – and I guess from your point of view an advice you would give senior managers like yourselves as well?
Jim: From a senior manager point of view I would suggest to get good people around you, employ people who have the knowledge up to date and that you can trust. And if you can’t afford people that can do that then you do need to go outside. If you want to engage in digital you need some expertise and you either bring it in through employing people with this expertise that you can trust or you bring in a consultant. I’d also say that you need to have really good goals. From a senior manager point of view, set the goals, what do you want to achieve? Is it a pure sales thing or is it just about getting more engagement or is it about getting more likes or whatever you want to achieve. You must have a really clear understanding of what you want to achieve and I think you need any support to be able to measure that or to determine that. That’s why you need good people that understand the industry, understand social in particular and I think you need good measurement techniques and you gotta be on it. And I’d say thing are going to change. It will change in 2 months time, in a year’s time or in 5 years time. It’s continually evolving.
And to say it again from a senior management point of view you do need the entire business sort of behind it as well. If you just have one marketing guy just doing a bit of social on the side I think it’s a waste of time. If it’s going to work properly you need a buy-in from the business.
Peter: Great. That has been fantastic Jim. Thank you so much. We’re up to 37 minutes of our discussion and as I said we could be speaking for another few hours. Thank you again for your time.
Jim: It’s been my pleasure, Peter.
Peter: Publishing is really like the canary in the coal mine for a lot of other industries. Digital is probably up there with publishing in the music industry.
Jim: Yeah, we have similar challenges as music.
Peter: Jim Demetriou, thank you very much for your time.
Jim: Thank you.
Peter: So there you have it; a very interesting perspective on digital marketing from an organisation that in a way has been dragged, kicking and screaming to the table by virtue of the fact that it’s not just the market that is telling it to do that but its suppliers, the authors if you will are saying that they have to have their own relationships as well.
There you are sitting in your brand marketing box. Do you, like Jim and his team have to launch 20 new brands – and books are brands – 20 new brands every month. Imagine that’s 200+ new brands a year. That’s a bit of a challenge and that’s why digital is such a great platform and opportunity and that’s why I think working with smart integrated digital marketing strategies is a great way to achieve the objectives not just putting out a Facebook post or putting up some photos on Instagram. It’s like how can we integrate this with our supply partners, both our authors and also book retailers but also how can we create a brand recognition, for example in Jim’s case with Allen and Unwin and we the readers are not necessarily going to have much name or brand recognition nor are we going to care who the publisher is. We certainly will care about who the authors are.
Anyway, that’s it for another episode of the Corporate Digital Marketing Podcast. Thank you so much for listening and joining in. As always we would love to have any feedback from you to hear any thoughts you have or any requests for people we should speak to and we will speak to you very soon. Bye, bye.