Direct Marketing Thoughts & A Little Math
May 31, 2011
With a week left until the official launch of THE VALLEY OF SHADOWS, I've been considering all the marketing I'm doing and that my publisher wants me to do.
Simultaneously, I'm running an ad in a major medical journal for my writing and editing services. Which makes me very conscious of how much money is spent, how many potential people it might reach, and then getting those people to do something about it, i.e., buy a copy of my book and/or hire me to do something.
I'm going to throw out that I'm not an MBA or even a business school graduate, but that I have written dozens of articles as well as a book about running a small business. I've read a lot about marketing.
So, just so you know, direct mail (i.e., junk mail) generally is considered to have a 1-2% response rate. Ad rates are a far quirkier figure related to the nature of the ad and the nature of the target audience and the degree that it's targeted, etc., but we'll go with those numbers here just for educational purposes.
The definition of "response rate" can be a bit vague (which is one of many reasons why marketing experts often get under my skin).
I thought I would share my math that I did in my head for the medical journal ad, though, which will possibly explain why the idea of doing marketing for novels can drive me up the wall.
The journal in question has 365,000 subscribers worldwide.
So, working with 1%, I figure that means that of those subscribers, only 3,650 will even notice the ad.
Out of those 3,650 people who noticed the ad, I suspect only another 1% will notice it enough to actually do something like contact me or visit the link to my website. That means 365 people.
Out of those, I figure I'll be in great shape if about 1% - and for ease of math, let's round up - or 4 people hire me to do some writing or editing.
A single client could more than pay for the price of that ad, given the nature of the work I do, what I charge, and the market and what I'm advertising for. One really, really good client could pay for the ad by a factor of 30 or 40, and if I got lucky and came up with 10 so-so clients, same thing. Well worth it. (And frankly, these may be best-case scenarios, but we'll see, or they could be totally unestimated. I think there's a very real possibility these hard numbers are under-estimates, in that I have a fairly good understanding of the market I'm advertising to and the type of work I'm advertising for). And if I do a good job, they're likely to be repeat customers.
Now, let's take us to a similar proposition for novel marketing.
One of the leading magazines for the mystery field, which I will not name, has about 23,000 subscribers. A half-page color ad inside costs about $750.
Let's break down some numbers again.
Only this time, because I'm willing to be generous and because we'll assume the readership of said magazine is "targeted" (as is the medical journal), I'll give 2% figures. Who knows? Maybe ad response could go as high as 5 or 10% in that circumstances (although I doubt 10% direct response).
Out of the 23,000 subscribers, 460 might notice your ad (2%).
Of those 460, another 2% might decide to act on it (I'm skipping a step here that I added in the medical journal ad). That means 9.2 people. Hell, I'll round up.
You just spent $750 to sell 10 copies of your book. Let's assume your publishing a hardcover for $25.95 and you have a somewhat typical 10% royalty. You just spent $750 to earn $25.95.
In fact, let's just figure out how many hardcovers you would have to sell to pay off that ad (and ad rates go twice as high depending on size and placement). Done your math yet?
289 copies.
To break even. (And I went with 2% and skipped a step).
Yeah, yeah, I've been told: the marketing you do for this book leads to more sales on the next book.
I've been told: it builds awareness and word of mouth, which you have to do.
I've been told:....
Who cares?
There's the math.
P.S. I went around the 'net a bit and found a lot of different figures, including one optimistic gent who thought a 5% response rate for direct mail was good and 10% typical for ad rates, although almost everyone agrees that there are too many variables to say for sure. A guy named Kevin Horne responded on one of these posts with:
The response rates quoted for direct mail are way too high for the US. They are around 2%, and can be much lower. The DMA tracks this annually. Since print is not a typical "direct" medium, you can expect response rates for it to be orders of magnitude less. The DMA data typically shows response rates on average of 0.15%, with a "best case" (print with a coupon/offer?) that can be as high as 0.5%. But you can see these are very low.
Read more: http://www.marketingprofs.com/ea/qst_question.asp?qstID=16071#ixzz1NxS5TtpL
With a week left until the official launch of THE VALLEY OF SHADOWS, I've been considering all the marketing I'm doing and that my publisher wants me to do.
Simultaneously, I'm running an ad in a major medical journal for my writing and editing services. Which makes me very conscious of how much money is spent, how many potential people it might reach, and then getting those people to do something about it, i.e., buy a copy of my book and/or hire me to do something.
I'm going to throw out that I'm not an MBA or even a business school graduate, but that I have written dozens of articles as well as a book about running a small business. I've read a lot about marketing.
So, just so you know, direct mail (i.e., junk mail) generally is considered to have a 1-2% response rate. Ad rates are a far quirkier figure related to the nature of the ad and the nature of the target audience and the degree that it's targeted, etc., but we'll go with those numbers here just for educational purposes.
The definition of "response rate" can be a bit vague (which is one of many reasons why marketing experts often get under my skin).
I thought I would share my math that I did in my head for the medical journal ad, though, which will possibly explain why the idea of doing marketing for novels can drive me up the wall.
The journal in question has 365,000 subscribers worldwide.
So, working with 1%, I figure that means that of those subscribers, only 3,650 will even notice the ad.
Out of those 3,650 people who noticed the ad, I suspect only another 1% will notice it enough to actually do something like contact me or visit the link to my website. That means 365 people.
Out of those, I figure I'll be in great shape if about 1% - and for ease of math, let's round up - or 4 people hire me to do some writing or editing.
A single client could more than pay for the price of that ad, given the nature of the work I do, what I charge, and the market and what I'm advertising for. One really, really good client could pay for the ad by a factor of 30 or 40, and if I got lucky and came up with 10 so-so clients, same thing. Well worth it. (And frankly, these may be best-case scenarios, but we'll see, or they could be totally unestimated. I think there's a very real possibility these hard numbers are under-estimates, in that I have a fairly good understanding of the market I'm advertising to and the type of work I'm advertising for). And if I do a good job, they're likely to be repeat customers.
Now, let's take us to a similar proposition for novel marketing.
One of the leading magazines for the mystery field, which I will not name, has about 23,000 subscribers. A half-page color ad inside costs about $750.
Let's break down some numbers again.
Only this time, because I'm willing to be generous and because we'll assume the readership of said magazine is "targeted" (as is the medical journal), I'll give 2% figures. Who knows? Maybe ad response could go as high as 5 or 10% in that circumstances (although I doubt 10% direct response).
Out of the 23,000 subscribers, 460 might notice your ad (2%).
Of those 460, another 2% might decide to act on it (I'm skipping a step here that I added in the medical journal ad). That means 9.2 people. Hell, I'll round up.
You just spent $750 to sell 10 copies of your book. Let's assume your publishing a hardcover for $25.95 and you have a somewhat typical 10% royalty. You just spent $750 to earn $25.95.
In fact, let's just figure out how many hardcovers you would have to sell to pay off that ad (and ad rates go twice as high depending on size and placement). Done your math yet?
289 copies.
To break even. (And I went with 2% and skipped a step).
Yeah, yeah, I've been told: the marketing you do for this book leads to more sales on the next book.
I've been told: it builds awareness and word of mouth, which you have to do.
I've been told:....
Who cares?
There's the math.
P.S. I went around the 'net a bit and found a lot of different figures, including one optimistic gent who thought a 5% response rate for direct mail was good and 10% typical for ad rates, although almost everyone agrees that there are too many variables to say for sure. A guy named Kevin Horne responded on one of these posts with:
The response rates quoted for direct mail are way too high for the US. They are around 2%, and can be much lower. The DMA tracks this annually. Since print is not a typical "direct" medium, you can expect response rates for it to be orders of magnitude less. The DMA data typically shows response rates on average of 0.15%, with a "best case" (print with a coupon/offer?) that can be as high as 0.5%. But you can see these are very low.
Read more: http://www.marketingprofs.com/ea/qst_question.asp?qstID=16071#ixzz1NxS5TtpL
posted by Mark Terry at 11:44 AM
2 Comments:
My experience with direct mail marketing (in another industry) suggests one positive response out of a hundred is good. That assumes your package is attractive. More than one, and you're in the black. More than more than one, and you've hit a home run.
But in our industry, which is one of the creative industries, it's really about planting seeds. Return on investment, especially in the short term, is much more abstract than in the normal-corporate-widget setting, and probably ought not play a serious role in our marketing plans.
Yeah, 1%. My math takes it down to .001% for my medical journal ad and .01% for the book stuff. I'm not really convinced any of it for fiction has a direct response, although an indirect, diffuse response that's practically impossible to track, yeah.
The thing that you've said here that makes me want to claw my eyes out has to do with long-term marketing. I've been doing this crap for 9 years. Catfish Guru came out in 2002. Dirty Deeds in 2004. I've had lags, which haven't helped, but over the years I've done brochures, postcards, Listservs, e-mail lists, book signings, book talks, library talks, book festival and fairs, conferences, print ads, online ads, blog tours, radio interviews, TV interviews, social media, etc., etc.
I'm not a believer in their effectiveness. Or perhaps, over the dozen or so articles I've written about marketing your business, every single marketing expert has basically said, "If you can't track its effectiveness, why do it?", and that's kind of sunk in.
Everything works a little bit, you can't track it in any reliable fashion, there are few if any home runs, and because we sell a book to an individual, it's not even that easy to get a sense of who your readers might be.
I would assume the standard reader of the Derek Stillwater books was a male reader who like action thrillers, but I've definitely heard from a lot of female readers (and rarely from men, although the women often say, "My husband loved it."). I've got an ad coming out in the upcoming ITW Report, which I know will get a lot of exposure, but I doubt there will be direct sales responses, although maybe some.
Books have to sell themselves, and that's hard.
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