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The Rise of E-readers: Two Huge Marketing Implications

by Paul Barsch  |  
September 22, 2011

This year, for the first time ever, Amazon sold more electronic books than printed ones. And Kindle e-readers are flying off the shelves, and one article suggests Barnes and Noble’s saving grace will be its Nook reader.

What gives with this sudden transition to e-books? What are the implications of this e-reading trend for marketing professionals?

The Economist article “Great Digital Expectations" highlights the rapid rise of e-books. And “rapid” is exactly the right word, as it was just in 2006 that e-reader sales were a measly 100,000, whereas 25 million units are expected to be sold in 2011. The article also mentions some startling ramifications of this trend towards electronic reading and publishing (paraphrased):

  • E-books have higher profit margins.

  • Romance e-books are selling like hotcakes.

  • Digital piracy is a threat.

  • Pricing is all over the map.

As more people switch to e-readers and the tablet craze really takes off, there are certainly some implications for marketing professionals.

1. The Long Tail

The long tail will be much more of a selling force. In the past, publishers would rely on big box stores, such as Borders or the like, to prominently display their wares. In addition, publishers would expect discount stores and warehouse firms, such as Costco, to move book volumes. With digital publishing, it’s conceivable that more players will have a “fair shot” at publishing success as clustering algorithms on Amazon, and the like suggest books based on our browsing history and past purchases. For sure, blockbuster titles will continue to have a conspicuous display on Kindle and Nook homepage screens, but readers will discover more book options as expert recommendation engines suggest likely interests that can be purchased in seconds.

2. Pricing

Pricing will take on added importance. Today, print publishers wrestle with initial price setting as they must deliver books to stores that will sell and also create profits. Pricing must be decided before printing because each book has a printed list price on the back cover.

However, with digital publishing, there is essentially no need to establish a “set in stone” price. In a virtual world, publishers (and online retailers) can experiment with pricing every day, perhaps setting different rates by country, discounting “on the fly” based on daily e-book sales, or offering deals to Amazon Kindle customers through its Special Offers. Amazon shoppers know it’s not uncommon to view a book, say “Harry Potter and the Deathly Hallows” one day at $21.24, and then come back to the site tomorrow and see it listed for $22.09. Pricing experimentation will happen instantaneously based on near real time data analysis---without the need to change store signage and update retail POS systems.

These are just two implications for rising e-reader ownership and there are certainly dozens more.

  • Can you think of other marketing implications for the rise of e-books?

  • How will social media change the way we find and buy e-books?

  • What changes, if any, will this e-book trend have on B2B marketing tactics?

I’d love to hear from you!

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Paul Barsch directs services marketing programs for Teradata, the world's largest data warehousing and analytics company. Previously, Paul was marketing director for HP Enterprise Services $1.3 billion healthcare industry and a senior marketing manager at global consultancy, BearingPoint. Paul is a senior contributor to MarketingProfs, a frequent columnist for MarketingProfs DailyFix, and has published over fifteen articles in marketing, management, technology and healthcare publications. Paul earned his Bachelors of Science in Business Administration from California Polytechnic State University, San Luis Obispo. He and his family reside in San Diego, CA.

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  • by Ganesh Thu Sep 22, 2011 via blog

    Hi! I can see some more implications of the rise of the e-book.

    1. Kids and teenagers, who are already tech-savvy, will take to it more and more in the coming years. Thereby, they will become a separate target segment for marketers.

    2. New/first-time writers and other unknown writers will find it easier than before to hit the market with their work. This could lead to a greater variety and depth in published content.

    3. Publishing houses can increase their geographical reach considerable in a short span of time, by piggy-backing on e-books.

  • by Paul Barsch Thu Sep 22, 2011 via blog

    Ganesh - spot on. Thanks for thinking of more implications in the rise of e-books. I find the idea of sponsored advertising on e-readers an interesting angle for marketers. Hopefully such offers will get much more targeted in the future as I don't believe I'm in the market for Oil of Olay cremes!

  • by Lou Lambert Thu Sep 22, 2011 via blog

    The newspaper market is moving quickly in that direction too Paul but somewhat behind the pace of books. I think that has more to do with the age brackets involved. The core hard copy newspaper market is more mature & affluent btw (typically 35-65). The online/mobile/IPad user group ranges much younger.
    Interestingly enough, I read this week that my old newspaper, The Philadelphia Inquirer, is testing a pilot program with 5,000 free 'tablets'. The implications of this loom large.....eliminating both print & carrier delivery expenses. The real issue with newspapers is that online advertising revenue has not yet caught up with print advertising. (currently that breakdown is is about 80/20). As demos and technology continue to change and evolve, online percentages & revenues will increase (along with the mature/boomer market 'moving on' to that great e-reader in the sky).
    We are fortunate in the Memphis market to have a very loyal print readership. Our combined print/online readership is at an all time high. Some markets are obviously not that lucky.........

  • by Paul Barsch Thu Sep 22, 2011 via blog

    Lou - the Philadelphia Inquirer experiment you discussed is interesting. I'd be curious what tablet is offered as free - probably not the iPad.

    You've brought to my attention a bifurcation that I hadn't really noodled - the segmentation of the e-reader market between dedicated e-readers (current Kindle) and tablet devices (with LED/LCD) screens that also play apps and browse the internet. Marketers will have to consider various OS' and devices as part of their communication strategies.

    Thank you for contributing to the discussion!

  • by Lou Lambert Thu Sep 22, 2011 via blog

    Actually, I revisted the article and the owner of Philadelphia's two major newspapers is offering 'discounted tablet computers' in an effort to attract more digital subscribers and while there is no mention of the brand, you are right it is not the IPad.

    Philadelphia Media Network, which owns The Philadelphia Inquirer, Philadelphia Daily News and, says it is the first major news company in the nation to try such a venture.

    Publisher Greg Osberg said on Monday that the pilot project will provide about 5,000 tablets running Google ( GOOG - news - people )'s Android operating system for as low as $99 to customers who buy a two-year digital subscription to The Philadelphia Inquirer or Philadelphia Daily News.

    The discount tablets will be offered first-come, first-served to those who buy the company's four apps: two that offer replicas of the papers' print editions, one for and one that features a version of the Inquirer designed for tablets. We considered this here in Memphis with the Kindle a couple of years back but Amazon is probably the hardest company on earth to navigate through. I'm quite sure you will see these types of initiatives become common place in major markets.
    Have a great afternoon!

  • by Paul Barsch Thu Sep 22, 2011 via blog

    Lou, regarding the tablet pilot you mentioned above, I'd love to see the break-even and revenue model for that one! Thanks for sharing your research and insights, it's much appreciated!

  • by Julia Hidy Fri Sep 23, 2011 via blog

    Ebooks are gaining traction but mostly in North America, Japan and Korea. Only Germany and the U.K. have been making the transition across the pond. eBook sales still lag in Italy, Spain and France. At BookCamp Toronto last month, a few Canadian publishers felt their ebook initiatives were behind the U.S.'s by1.5 to 2.5 years. And ebooks in the U.S. are still only 10% of the market. Don't throw away your offset presses or snub foreign language agents' deals yet!

    At a recent ebook roundtable for U.S. educational publishers, an estimated of 50% of scholastic titles will be purchased as ebooks by Fall 2014. Students who've become accustomed to ereading, annotating and sharing e-content will enter the workplace in Spring 2015. Newspapers and magazines need to get ready. It would be safe to say, those students will spike ebook sales after mid-2015.

    In the B2B space, most trade publications have carved a solid revenue stream by posting white papers and other online content from their 'advertisers.' Newspapers could learn a thing or two about shifting into a more multi-media .html5 format and embed audio, videos and interactive content to get their advertisers ads come to life, along with their balance sheets, if they get their acts together. Whether they realize it or not, newspapers and magazines have the potential to become byte-sized broadcasters.

    For authors and publishers, the long tail will be a disaster for some and a boon for others. Authors will kiss six or seven figure advances good-bye, which may make the big six publishers feel great for a while. Then the numbers will come in and they'll realize they will have to compete with authors and books who are actually more passionate about and effective at marketing their titles than they are. Medium to large publishers will struggle to market titles alongside an ever increasing span of long tail smaller publishers and self-publishers. will balloon from 1 million to umpteen million ebook titles. Google Books' sales will also take off. Despite the hoopla, iBook sales are still only a small percentage of that market. And if any one of them tries to impose a 0.99 cent ceiling on the sale of my ebooks, I'll be the first in line (perhaps with a lawyer or two in tow) to tell them that writing a book takes many weeks, months if not years, and can't compare with going into a studio on a weekend to cut a tune.

    Being "Niche" will be the new black. A new definition for best sellers may have to be created - both in terms of reach and actual revenues. Then there's's CEO's announcement this week of a type of business model. How WILL authors, publishers and businesses DO business with the Big A? How will royalties be calculated? I get a headache just thinking about it!

    My idea is to find and market to people who can become far more than an algorithms that may or may not pop up in a readers' search on a big online ebook portal. I'll bolt a shopping cart onto my websites by 2012 when I roll out my book series and create a funnel of products beyond ebooks. Otherwise, it may be tough to make a living as an author if, because of the long tail, I may only sell 2 to 4 books a week on Big A or Google - if I'm lucky! Authors will be bashed around by royalty rates, price fluctuations and caprices of any one ebook seller or portal. But then, that's business for you. So I have to create visibility and demand, and hope I don't get flattened.

    The adoption of ebooks will change us all. This is a topic I've been following closely for the past year. Hope you and your readers find this info useful. (Sorry for the long post.)

  • by Paul Barsch Fri Sep 23, 2011 via blog

    Julia - never apologize for educating - I found your input very insightful. While I realize that few authors will have the heft of JK Rowling to set up their own portal and sell e-books from their own site (thus bypassing Amazon, BN and others) this may be a viable model to give back some control to authors. Sounds like this is your approach with just your own IP or that of multiple authors.

    Thanks for taking the time to comment!

  • by Julia Hidy Sat Sep 24, 2011 via blog

    Hi Paul,
    Actually, I'll still sell via and other major ebook portals, so I don't plan to bypass them. As ebook markets develop globally, I'd like to have my ebooks placed in as many foreign portals as possible. Readers can only find us if we're listed.

    For my own website sales pages, I'll try to showcase content to offer more depth than most ebook portals. Even though I'm not JK, I'll can offer sample chapters, historical research excerpts, case studies, audio or video interviews, or previews of content. As a marketer, the biggest bonus will be: I can do A / B split testing for concepts, future book titles, ads, copy, marketing materials, book blurbs, etc., all of which will help me and readers. I'll know if a contest, offering, price point or event is getting a response, and at what rate. I can change, tweak and rework stuff. Readers will ultimately benefit, plus the marketer in me will have a party!

    Bolting a shopping cart onto an existing website or blog is easy. Beyond additional income from selling ebooks, THE most compelling reason is to (respectfully) own the data of purchasers' names and email addresses. My author friends have recorded video and/or audio courses, webinars, teleseminars and even their speaking engagements. They have edited and sold their content, depending on the niche, from between $19 to $10,000 per package, with the average package prices in the $199 to $2,000 range. You have to sell a lot of books to earn $1,000. Many also been asked to speak at events, endorse products, or consult. ALL have told me that it is their opt in email lists that have allowed them to market to their readers and earn a decent living, despite anything else.

    What may be surprising is that most of the authors are not business mavens or information marketing gurus. They are unknowns outside of their specific niches. A few are best sellers. Yet inside their niches, they have the clout and marketing savvy to sell robust 'products' beyond their $7.99 ebooks. They're dog trainers, photography and video experts, foodies, historians, spiritual counselors or therapists. They have found ways to cheaply yet effectively 'make' multimedia products that their audiences want. Their products are not slick; but they effectively convey their insights and knowledge. I even know a fiction author who's a featured speaker on luxury cruise ships and saves herself $5,000 to $20,000 per cruise 3x to 5x per year while traveling the world in grand style. The long tail has not killed their businesses, it's helped them expand deeper into their current markets or beyond.

    Most authors usually have a box or three of research sitting around. By thinking in terms of not only being an author, but a teacher, social anthropologist, content creator, cultural, lifestyle or social muse, authors may find they have much more to share than simply one book on a topic. It's the depth and quality of information that will help authors find audiences who will fully appreciate their passion and expertise. But this is a case of where if you don't build it, it's guaranteed, they will not come. Worse, if you don't build it, another author might.

    I'm fascinated that JK Rowling is bypassing the major online portals. I'll check out her site tomorrow. Her website is likely state-of-the-art in terms of back-end development. A decent, fully secure shopping cart system no longer requires a small town's worth of developers to go live. Auto responders are de rigeur and people know to expect that if they sign up or purchase an ebook, it will be in their inbox in a few minutes. Prices range from $199 to purchase outright to $3,200 a year. There may even be less expensive solutions. Banners and links can be customized; and with readers will get their ebook in a few seconds, fulfillment is taking place at the same competitive speed as Amazon. You can literally be sleeping while money from sales flows into your account.

    But there is a more compelling reason: My relationship with my readers will extend well beyond what can take place if I'm out of the loop due to a third party retailer. If a reader likes my material, hopefully they'll want to know about my next title. If they really like it, they may even tell their family and friends. On my website, there's no long tail. If I can SEO optimize it well enough, they may find me more easily over time. It may take me a while to build up a list and brand awareness. Heck, at this stage, it's taking me a while just to trick out my website.

    But I have a theory: Just as the current ebook market seems to be consolidating, and most people currently visit an average of 20 websites, think about what's happened with many TV viewers and radio listeners. They got tired of the homogenized fare; they also didn't like the choices they were being given. I believe there will be a point when the purchasers who use mega online sales portals wil

  • by Paul Barsch Sat Sep 24, 2011 via blog

    Some powerful nuggets in here Julia. Seems like you're more than ready to capture the market with an impressive array of content vehicles. Appreciate the knowledge exchange, I learned a lot, and hope future readers of this column do too!

    Thanks for sharing!

  • by tom(watkins products associate) Sat Oct 1, 2011 via blog

    still love my hard copy makes me feel like the whole world doesnt have acces to it, even though they do

  • by Michelle A Wed Oct 5, 2011 via blog

    I believe the e-book will become more accessible on a wider scale through various ASP platforms due to its rapid growth. Currently, it seems that online retailers are main e-book suppliers.
    E-book manufacturers will seek to update models more frequently, thus drawing attention to other well known competitors to develop new e-book versions.
    I can imagine that social media will only enhance e-books especially through e-book club online communities that would recommend best sellers, good reads and must haves. Social media may choose to sell e-books through their sites thus creating greater e-book reach thus extending e-book supply chain even further.
    Lastly, there is no risk that the e-book will run out of print and customers will not have to worry about placing a book on back order; which benefits both the digital publisher and the online retailer.

  • by Paul Barsch Thu Oct 6, 2011 via blog

    Michelle - thanks for commenting. I wonder if publishers will start bypassing the big portals (Amazon, etc and start selling on their own sites. Thoughts?

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