Publishers Must Embrace Data-First Thinking

I've always viewed direct-to-consumer strategies through the lens of revenue. Direct selling is a moneymaking strategy meant to bypass revenue-draining middlemen like Baker & Talyer and Amazon.

It hadn't occurred to me, though, that with any direct-to-consumer sale or online interaction, publishers gain something equally as valuable as revenue—consumer data.

Much of the publishing industry is not in a data-first mindset asserts Tom Davenport in a recent article dubbed "Book Publishing's Big Data Future". Although Davenport criticizes the publishing industry as a big data underachiever, he admits that's in part because publishers have traditionally worked through intermediaries to reach consumers. But that dynamic is changing.

The intermediaries, like Amazon and Scribd, are becoming the content creators with their own publishing platforms and even, in Amazon's case, original series. These companies can do this because they began as retail channels, tracking data that built a base for future business development. It's time that publishers create their own channels and do the same.

Though slow to adapt, there are signs of change among Big Five publishers. Simon & Schuster recently announced the launch of its book recommendation platform, Off the Shelf. The site recommends previously published works (from all publishers) and allows users to build a "Shelf" of must-reads. Users can then buy the work through the online retail channel of their choosing. Not only can Simon & Schuster pocket a portion of those sales, but the publisher can also track what books and book lists are most popular among readers.

HarperCollins has also dabbled in creating channels for consumers with its launch of CSLewis.com and Narnia.com in 2013, both of which sell direct the works of C.S. Lewis. Though still very much an experiment, the sites provide an opportunity for HarperCollins to track reader consumption through a partnership with Bluefire, and gather data that may influence the creation of future direct sale sites.

In the education sector, variations of the direct-to-consumer approach have proliferated much more rapidly than in the trade sector. Higher education publishers like John Wiley & Sons have launched their own e-learning platforms, such as WileyPlus, to distribute their content directly to students and professors. Just yesterday, News Corp announced the launch of Amplify, an all-digital English curriculum for middle schools. Not far behind, McGraw Hill recently partnered with StudySync to provide its own middle school curriculum. These companies are embracing new startups and technology to create their own channels and work directly with consumers.

Although these experiments are encouraging, publishers still have a long way to go in harnessing big data. Like tech giants Google, Facebook, and yes, Amazon, publishers need to create workflows in which big data informs product development. No longer should books be created on hunches or on memories of what has sold before. Big data is a crucial foundation for development and imperative for building meaningful consumer relationships. Information is key for publishers, and right now retailers have a monopoly.