The Book Industry’s Quest for Data Intelligence

"Know your audience" is a common maxim among writers, one that pushes them to deliver the most useful or entertaining content they can for their readers. Yet knowing one's audience in a precise way has been a difficulty for book publishers up until fairly recently. Except for some specialty areas of the book trade, retailers have traditionally been the only members of the supply chain to interact directly with consumers, allowing them to collect large amounts of data on reading habits and purchase history. As we all know, that information is guarded closely, as are the insights drawn from it, leaving publishers in the dark about the readers they serve. Only in the last two decades has that begun to change with the rise of digital and the data footprints that come with it.

Collecting data from a variety of channels, publishers are gleaning new insights about current and potential customers. Through email marketing campaigns publishers are tracking metrics on open rates, clicks, and, perhaps most importantly, adding new email addresses to which they can market in future campaigns. On proprietary ecommerce platforms publishers are tracking purchasing and browsing activity. On social media platforms some publishers are using sophisticated tools to understand the larger consumer market and track trends around specific authors, books, or interests. And one education publisher interviewed in this article is conducting qualitative research to better understand the life of college students in and outside of the classroom in order to discover new problems that will inform product development.

The types of data publishers can now collect is wide-ranging, but the common thread is that publishers are monitoring consumer actions to a greater extent and analyzing those actions to inform marketing efforts, product development, and strategic business decisions. Kaushik Sampath, COO of Qbend, a technology provider which builds web stores for book publishers, has observed this trend of greater data collection and analysis emerging among book publishers. The time is right, says Sampath. "When you come to a digital ecosystem there is less need for a distributor or even a retailer. Now publishers have the ability to access their readers directly and gather the data they need to sell more books."

Though implementing a strategy around consumer data on a large scale is new for many publishers, some are beginning to heavily invest in the tools and talent necessary to build a data-driven organization. We spoke with leaders from HarperCollins, Hachette, and Cengage Learning to understand what types of data they are most interested in and how that information is influencing their business strategy.

The Importance of a Centralized Database
HarperCollins made headlines last year with the redesign of its website, which placed its ecommerce platform front and center on its homepage. In so doing, the company hopes to bolster direct sales and build relationships with its readers. But it's the technology behind the bookstore that gets Angela Tribelli, chief marketing officer at HarperCollins, most excited. Powering this direct-to-consumer effort is a new customer relationship management (CRM) tool, which the publisher launched in January 2014. "Our biggest shift," says Tribelli, who co-led the implementation of the CRM, "has been moving from a list-based model to a CRM model. Previously, customers had only been signing up for narrowly permissioned email lists, usually around specific authors."

Using a CRM-based approach, HarperCollins is able to track consumer interactions across all of its brands, whether those interactions occur on its ecommerce platform or via opt-in newsletters. And no longer is data about those interactions siloed under specific authors, imprints, or platforms. Stored in a central CRM database of over a million-plus readers, HarperCollins for the first time can understand how its consumers read across authors and imprints and better target their interests. "We focus on what readers actually do. What they click on, what they browse [on our sites], what they buy," says Tribelli.

Jim Hanas, director of audience development at HarperCollins, works intimately with the new CRM. Hanas joined HarperCollins after spearheading the social media strategies of the New York Observer and NYCgo.com -- New York City's tourism website. Translating those digital experiences to the book world, Hanas leads HarperCollins' social media and newsletter efforts and is using the CRM to gain broader insights into how customers read.

One of the channels Hanas manages is Bookperk, a daily deals newsletter that shares the latest HarperCollins discounts with its subscribers. Bookperk initially launched in 2010, but in October of 2014 the newsletter was relaunched and integrated with the CRM. "Without the CRM we would not be able to analyze and act on the insights we gain from a high volume email like Bookperk," says Hanas.

Because HarperCollins isn't targeting one author's audience or a single genre readership, the publisher is finding interesting correlations across verticals. "There is almost no one in the world who purely buys in the verticals that publishers tend to define and go after," says Hanas. Instead there are what Hanas calls "product clusters" -- books from a variety of genres and authors who have similar readerships. "Knowing that, we can market a much wider range of books to these readers than we could before," says Hanas.

"Our investment in a CRM gives us the ability to learn from consumer behavior," explains Hanas, "We can retarget people who have clicked on an author's books in the newsletter. Our system actually learns. We don't guess what they want."

While Hanas manages Bookperk and HarperCollins' social media outreach, Tribelli drives much of the organizational changes around data analytics in the marketing department. She has helped hire the data analysts who can translate what the numbers mean and the operational teams that work to create actionable plans around those insights. Tribelli advises publishers that want to develop a data-driven organization to be both specific about the data they need to collect and flexible about how that data is collected. "Publishers must agree on the metrics that matter," says Tribelli, "That is absolutely critical. Opportunities for learning are going to be limited or lost if everyone is looking at the same data using different metrics."

This issue is exacerbated, adds Tribelli, when teams share only the metrics that show their work in the best light. To avoid this, Tribelli recommends having a hard conversation with staff about what metrics matter. At HarperCollins, the metrics that matter most are the are the click, browse, and buy actions that happen on the ecommerce platform and Bookperk's open and click rates. These actions directly inform the publisher's marketing strategies.

Tribelli also endorses a flexible approach to data strategy implementation. "Avoid aiming for perfection. By the time you implement a data strategy that answers to every use case, the problems you were originally trying to solve will change and the technology to address those questions will have gotten better, cheaper, and faster." Tribelli recommends publishers establish two or three goals they want to accomplish with data and find the minimal viable technology to reach those goals. "As you learn, you can always build and develop more of what works."

Using Data to Inform Day-to-Day Decision Making
Hachette too is putting greater emphasis on using data to inform its decision making, particularly with the hire of Dan Lubart as SVP of strategy and publishing operations in May of last year and the promotion of Heather Fain to SVP, director of marketing strategy in June of last year. Both have been charged with the task of seamlessly integrating up-to-date sales and marketing insights into employee's day-to-day decisions.

To that end, Lubart has built a global dashboard that enables his colleagues to correlate the latest sales data with recent marketing campaigns. The reporting tools make the data more visual and more accessible within the organization so that everyone -- not just management -- is able to look at data in a way that helps them do their jobs better and more efficiently. "If you want people to see the cause and effect between marketing and sales, you want to have a visualization of sales on a daily basis, which you can do with ebooks. By making it visual, it makes it easy for people to understand the results. There isn't a ton of back and forth and it speeds up the decision-making process."

Lubart is also using ebook sales data and pricing history to help guide Hachette's day-to-day pricing strategy and track industry pricing trends. Lubart develops demand models -- a set of rules for how a book should be priced to optimize revenue for that title, build a base of readers, or a balance of the two. By tracking ebook sales data, pricing history, and individual product data, Lubart can understand at what price point books are selling and when that price should be raised or lowered. These insights allow Hachette to quickly react to sales fluctuations.

In addition to leveraging real-time dashboards for quick decision-making Hachette has put an emphasis on utilizing "social listening" tools. [Such social listening tools include Crimson Hexagon.] Heather Fain, SVP, director of marketing strategy for Hachette, says she wants to better understand where conversations about certain books are happening online and have a glimpse into readers' interests outside of reading. "We're trying to find out where people hear about books, where do they talk about books, where do they discover books. That is the kind of reading behavior that is interesting to us."

These kinds of insights influence the marketing strategies for specific authors. "We're taking authors on a case by case basis and evaluating their online presence and then looking at areas where we can focus our marketing energies." One example of this, says Fain, was a recent campaign launched to grow author David Sedaris' Facebook following. Sedaris had already accumulated a significant fan base on Facebook, but Hachette wanted to expand that audience. By tracking his followers' activity, Hachette realized that posts sharing Sedaris' commentary tended to garner the most likes and shares. Knowing this, Hachette recreated some of Sedaris' most popular quotes and showcased them in an online advertising campaign. The ads targeted youthful comedy sites like IFC and Comedy Bang Bang. "We felt like it was a really successful campaign where we took what we could find from social media and replicated it in other places to broaden his audience. And we're hoping to do more campaigns like this for our other authors."

The Importance of Qualitative Research in Product Development
Cengage Learning has taken a different approach to data collection. Although the education publisher is still very much interested in purchase data, social media insights, and in-book reading behavior, the emphasis Cengage places on qualitative research is unique. According to David Forman, SVP of product and user experience, this research method isn't guided by a specific question that needs to be answered -- like "How can we push more users to our ecommerce site?" -- but rather by broad observation to find new problems to be solved.

Whether it's asking about student interests outside of school or observing their studying routines, qualitative research helps Cengage improve existing products and create new products that solves problems students may not even realize they have. Cengage brought greater focus to this research in 2013 when the company promoted Forman to lead the user experience (UX) and product design team with the mandate to "envision and create outstanding products."

"We drive a lot of cultural change in the organization toward being more user-centered," says Forman, who notes that up until recently education publishers catered to instructors, designing products around their courses, rather than for the end user.

In order to understand the student Cengage has embarked on an ambitious qualitative research project. Launched in August 2014, 21 Voices is an initiative that gives Cengage an in-depth look at the college careers of 21 students. The Cengage UX team collects data from students on a weekly basis. "They are sending us this constant stream of insights into their lives," says Forman, "We have video chats or they send us texts, emails, videos, photographs."

The team interviews the students once a month and shadows students for a full day each quarter. The goal is that, after viewing these students throughout their college careers, Cengage will have a clearer picture of how students learn and have new insights into better serving this demographic. "What we get out of this kind of research are new problems to solve without getting distracted by looking in specific disciplines or trying to solve a preordained problem," says Forman. "That's what I'm most excited about because it's quite groundbreaking. I'm not aware of anyone else who is doing anything quite like it."

An example of a "new problem" Forman's team has discovered is mobile usage in education. Although mobile reading is growing, especially among college-aged consumers, few students are using their mobile devices to read course material. What Forman and his team have discovered, though, is that students want to test themselves on their smartphones in the fifteen minutes or half-hour they may have free on public transit or in between classes. This insight has informed Cengage MindTap, a personalized course platform. "The mobile version is much more focused on specific, short time period tasks than the full browser-based version," explains Forman, "That is all based on inputs we get from students and studying their behavior, both qualitative and quantitative feedback."