The myth of marketing costs

No, I don’t mean that marketing is bad or that it doesn’t exist or that you shouldn’t pay for it.  Good marketing is a very valuable tool.

However, when you say, “I have to charge this much for my product to cover marketing costs”, you are doing it wrong.  If you aren’t making back the money spent on marketing in extra profits, you should find someone else to do your marketing, or stop doing it altogether.

If you spend $10 on marketing, your profits (not your total sales) should increase by at least $11.  Otherwise you were better off to just keep your $10.

So what “I have to charge this much for my product to cover marketing costs” really means is “I am charging you more so I can make more money”.  Good work if you can get it, but you’d better make sure your customers never find out what’s going on.  They aren’t likely to be happy about it.

See part 1

This is the first in a little series of posts on why Amazon, Macmillan, and everyone else are all wrong about ebook pricing.

The myth of devaluation

If anyone ever tells you that low prices for ebooks are devaluing books, you can be sure of one thing – what you are about to hear is not a logical argument on ebook pricing.  Either this person is lying to you, or this person is making an emotional or psychological appeal to you to pay more.  You can not “devalue” an ebook by lowering the price.  You can undermine the leverage the seller has to charge a higher price, but you can’t make a potential buyer value the book less.  People like to confuse value and price.  They are related, to be sure, but are very different concepts.

Let’s look at an example.  Let’s say you and I have each written a book.  We have an imaginary consumer who likes your book twice as much as he likes mine.  If both books are priced at $10, he will certainly buy yours.  If I drop the price to $9, he’ll still buy yours because he likes you that much better.

But what if I drop the price to $1?  Have I devalued your book?  No, absolutely not.  He still values it twice as much as he values mine.  But my price is 10% of yours.  He’s probably going to buy my book, and he’ll do it because he’ll get half the enjoyment of your book at 10% of the price.  This is, for most people, a good deal.

Now, if we pretend that collusion and price fixing aren’t illegal (and let’s do that, just for the sake of argument), you could call me and we could agree to both charge $10.  This would work if we were the only two games in town.  But we aren’t.  We have to compete with not only all the other authors out there, but all the other things that people might possibly do with their free time.

And there will always be cheaper alternatives to your book (well, there’s maybe a case or two where that’s not exactly true, but we’ll get to that another day).  Movies, music, walks in the park, the internet, the list is endless.  Blaming me for “devaluing” your book is just silly.  You might as well blame the beach for all the nice sand there is to walk on, and the cool breeze coming in off the water.

So what can you do?  First of all, the only reason that what I’m doing matters to you is that I might be doing something you hadn’t thought of, and you can learn from me.  Beyond that, don’t worry about me.  Worry about making your book the best it can possibly be, and worry about how to get more people aware of it.  There are a million ways to do this, and none of them start with accusing your fellow authors and publishers of “devaluing” your work.

See part 2

The Digital Book World conference started today in NYC.  I couldn’t go, but I did get to follow along on Twitter.  I know I missed a lot, and I’m waiting for some more detailed write-ups from people who were there, but I think I got a pretty good feel for the conference.

Some highlights from Twitter (Follow along with the Twitter hashtags listed here):

LJNDawson (website) quoting Richard Nash (website) “not selling the book; you’re selling the author.” First of all, if you’re at all interested in reading, writing, or publishing, you’re on Twitter, and you aren’t following these two, you should fix that right now.  And the quote gets right to the heart of what publishing increasingly is becoming.  It used to be that an author had to have a publisher to have any sort of chance of selling a book.  That’s not true anymore.  Publishers are still very valuable, but if they don’t start rethinking the relationship they have with the book and with the author, that’s going to change.  Some of them are going to wake up one day and find that the gap between what they offer and the POD and DIY stuff is so narrow that their services are no longer worth the extra money.

Will Entrekin (website) So while pubs flail to fight pirates, golden opportunity for writers to better reach more passionate readers. Brian Napack, President of MacMillan, gave a controversial presentation on book piracy.  The basic gist was that he plans to fight pirates tooth and nail without ever looking into why people pirate books, and trying to find something they want to buy.  He seems to want to revisit all the mistakes the music industry made.  If the rest of the big publishers feel the same way, there is a huge opportunity for others who take a more pragmatic approach (and perhaps learn from the mistakes of others).

Suzi Steffen (website) Book “piracy” & music “piracy”: Offered free download of song or 2, I’m MUCH more likely to spend $$ on other work/merch/concerts. Using free downloads as advertising or promotion – it amazes me how many people refuse to believe this can ever be beneficial.  Not all downloads are a lost sale, and some lead to multiple sales in the future.  This never gets counted in the “cost of piracy” numbers.

Kelly Leonard (website) “young kids have a disdain for media companies” um no they have a disdain for spending $ Know your market.  Before you start filing lawsuits and asking for new laws against unauthorized downloads, think about whether you’re meeting the needs of your customers.  Before demonizing an entire generation, try to understand where they’re coming from, and think about whether there might be a middle ground where everyone can get what they want.

In general, it sounded really cool.  I am looking forward to tomorrow, and I am determined to make sure it makes business sense to attend the conference next year representing Manfred Macx.  I couldn’t justify the expense this year, but next . . .

I attended World’s Fair Use Day the other day.  It was a really cool conference, and not just because of the free food.  It got me thinking a lot about fair use and copyright and what that means to all of us.

Some of the most interesting things that I heard were questions about how copyright and fair use spread beyond the United States.  More and more we live in a connected world where boundaries of states, countries, continents, or any other geographical issues just aren’t that important any more in a lot of meaningful ways.  I sit here writing this in Washington, DC, but anyone with an internet connection, all over the world, can read it.  With a little help from Google, people can even read it in a language other than English.  Most of our copyright laws were written before that was a real possibility.

So what does that mean for global copyright (or whatever you want to call it)?  It’s trivial to share content across the world, but how do you know what laws apply?  Do the laws of the country you’re in apply?  The laws of the country where the server is?  The country the creator is from?  It got me thinking about potential solutions.

As I’m a programmer, one of the first things I thought of comes from programming.  What if we had a global copyright API?  For the non-programmers, think of an API as a restaurant menu.  You get a little blurb about each menu item, so you have good idea what you’re getting, but you don’t know every step in the process to prepare the food.

So, let’s say the world agrees on a set of copyright levels.  A level would be everything from copyleft through Creative Commons through All Rights Reserved.  You can call it whatever you want, but the first level would be less restrictive than the second, which would be less restrictive than the third, and continue on from there.  We would then come to an agreement on what each level means, and then it is left to the country from which the content originates to define how to attach a level to your work.

So, for example, one of my favorite Creative Commons licenses is the attribution-share-alike license.  That means you are free to do whatever you want with the content, but you have to credit the originator, and you have to apply the same license to your derivative works, so anyone can use your work in the same way you used the originator’s.

The world would agree on what this means.  For Creative Commons, that happens to be easy because the different licenses are each explained in plain language (Even in many different languages) that don’t require a lawyer to understand.  For other levels, it might be harder.

Then, each individual country (or city, county, region, whatever) would determine the rules for classifying your work at that level.  If one country wants to say that no work can have an attribution-share-alike license, that’s up to that country.  But reasonable countries would provide a set of guidelines to their citizens, explaining how to apply this license to their work.

When that work crosses a border, the country it finds itself in would be bound to honor the definition of the license, even if that particular country doesn’t allow works to have that license.

This should satisfy the big content companies, because they could apply the most restrictive license their respective countries allow, and everyone around the world would have to abide by it.  It would satisfy content creators, because they could feel confident in allowing their work to cross borders, knowing that they had set the rules for its use.  It would satisfy lawyers by creating all sorts of wonderful case law to digest and bill for.  It would satisfy politicians because making everyone happy tends to help out with re-election campaigns.  And it would make me happy.

So, all we need is a global agreement on the set of levels.  That shouldn’t be too hard, right?

How do you publicize a self-published book?  You’re already blogging and Tweeting and taking part in any online scene you can, hoping to attract the attention of people who might like your book.  But this isn’t enough.  You still want to make the jump from online to off, getting people who don’t live online interested, too.  I know I forget sometimes that not everyone spends as much time in front of a computer as I do  No matter how many people read my blog or follow me on Twitter, lots of potential customers still won’t have any idea who I am.

It’s a hard road – marketing may be the hardest part of selling a book to do on your own.  It’s easy to find a professional editor to work with, and there are plenty of print-on-demand publishers.  But marketing, getting your book out where people can see it, is still tough to do outside of traditional publishing.

Last night I had a dream.  In my dream, an author, who had signed up to publish with Manfred Macx, and I were setting up a booth on the Mall in downtown Washington, DC.  We had paper copies of his book, information about Manfred Macx, and some free stuff to give away.

I woke up thinking to myself, “That’s not a bad idea”.  I’d still have to work out some details – I’m not even sure it’s legal to do that on the Mall.  But that’s not the point.

The point is that it could be a great way to get the author’s name out there, and get some nice publicity for Manfred Macx, as well.  So, I need a local DC author in need of a self-publishing platform.  A local works best – because there aren’t travel expenses, and, more importantly, there’s a connection to the city.

I want to make this happen.  Not now, because no one wants to sit outside in a booth all day when the weather stinks.  But this spring, when the tourism season really picks up again, I’m going to be out there with someone, promoting a book on a soapbox.

Two of the most common complaints about the publishing and bookselling world are that easy self-publishing is flooding the market with junk, and little independent bookstores are dying.  Can’t these things help take care of each other?

Self-published books don’t have the same filter on the front end.  There’s not necessarily an experienced editor polishing the work until it shines.  There’s no one rejecting books because they aren’t marketable.  So we have a lot of self-published books that only a mother (specifically, the mother of the book’s author) can love.

But small bookstores are fantastic filters on the back end.  Now, the image of the helpful clerk picking the perfect book for a customer after a thirty second conversation may be romanticized a bit.  But a bookstore full of employees who love to read, who read all the time, is a wonderful tool to cut through the self-published forest and pull out the stuff that’s really worthwhile (or even just really appropriate for the customer at hand).

Complaining about both of these problems at the same time is a bit like complaining that it rains all the time, but no one will buy your umbrellas.  Either it’s not really raining as much as you think it is, or your umbrellas aren’t very good.

This is a slightly different context than Manfred Macx – the money goes to charity – but it’s the same idea.  You can have your name or the name of your choosing featured in an upcoming book by a best-selling author.  Here is the first one I became aware of (via draccah), but there are a bunch of similar items for sale, proceeds all going to charity.

It’s interesting – this sort of thing is not that uncommon in a charitable context, but it’s pretty rare for the author to be using a similar technique to make a living.  Is it a perception thing?  That this is okay for charity, but not to make a living?  I think the idea that we can get a pass for doing otherwise objectionable things if it’s in the name of charity is wrong.  Either the ends justify the means, or they don’t.

If the ends justify the means, the end result of raising money in this manner is that an author can make or supplement a living by writing.  This is generally seen as a good thing.  It may not be as important in the grand scheme of things as feeding the hungry or fighting disease, but advancing the arts is universally accepted as a positive outcome.

And if the ends don’t justify the means, then anything objectionable is objectionable in the name of charity or otherwise.

In either case, authors should be doing more of this sort of thing.

It’s getting closer and closer to launch time.  Manfred Macx is looking for authors interested in taking control of their book and using free infinite goods to sell more of something else.  Leave a comment here or send us an email if you’re interested.  We’ll even let you poke around the private alpha release of the website so you can get an idea of how it’s going to work and what you’re getting yourself into.

Needless to say, we’re pretty excited.  There’s still plenty of work to do, but the site launch is getting close.  It will only get more exciting as launch gets closer, so drop us a line if you want to get involved.

I recently met Henry Baum of Self-Publishing Review over Twitter, and he’s just put up a post all about Manfred Macx.  Go check it out.  And while you’re there, take a look at the rest of the site – it’s full of all sorts of stuff related to self-publishing.

I recently read The Long Tail by Wired editor Chris Anderson.  It’s a good book, though not a lot that I hadn’t heard before.  It is presented in a very accessible way, and so I bought the audiobook version to send with my mom and grandmother on vacation this summer.  A lot of the issues brought up in The Long Tail are the things I’m working with on Manfred Macx, and I thought the book would help them to better understand what I wanted to do.

At that, it succeeded.  Now, when I talk to them about what I’m doing, they no longer look at me like I have two heads.

My mom even bought two subscriptions to the print edition of Wired – one for herself, and one for my brother-in-law.  The more interesting one is for my brother-in-law.  Here’s a little timeline.

• 9/2/07 – Purchased a gift subscription for two years
• 7/21/08 – Received an email from Wired, breathlessly stating that the subscription was about to run out!
• 8/14/08 – Another email, another urgent reminder to renew!
• 9/X/08 – Renewed for a year (until 9/2010), thinking the subscription was about to expire
• 6/17/09 – Another email from Wired – your gift subscription is expiring!
• 7/15/09 – Yet another email
• 9/16/09 – Finally, a letter urging her not to “disappoint a friend who’s looking forward to staying on top of our technological future”, once again making it as hard to figure out as possible that the subscription still has a year to go before it expires.

Now, I understand that the magazine industry is struggling.  There is so much competition for our time and attention.  Honestly, when was the last time you read a magazine when you weren’t on an airplane or in a waiting room?

But you would think that the magazine that employs the guy who wrote The Long Tail would maybe have a clue.  Deceiving your customers is no way to keep them.  Wired tried to walk a fine line between aggressively pursuing subscriptions and outright lying to customers, and then crossed right over.  It’s possible that the software people who wrote their email reminder system forgot to look at the year the subscription expired, only focusing on the month.  As a software person myself, I’d be inclined to give them the benefit of the doubt.  But when my mom emailed Wired to complain, she got a form letter that totally ignored her question and suggested that it was her responsibility to keep track of her subscription, not theirs, and that she should just ignore their urgent emails if she had already renewed.

It’s sad – I think the magazine industry fills a good niche.  They’re more specialized than the newspapers, though not as timely.  But they’re more succinct and faster than books.  There is clearly a spot for something resembling a magazine in the future of media.  But when the pursuit of another year of subscription fees becomes more important than how you treat your customers, you’re waving a white flag.  You’re telling the world that you are unable to compete, unable to adapt to a changing world, and you’re clinging to deceptive marketing to prop up the status quo.

I feel like I repeat the same thing, over and over, but too many people don’t seem to get it.  There will always be a place in the world for talented people.  But when those talented people refuse to acknowledge that some of the ways they used to make money might not work anymore, and start demanding that the world change back to the way it was, they lose their relevancy.  You can’t try to limit technological advances to save you from having to redefine the way you do business.  You have to look at what the technology enables, and how it can help you.

You’d think a technology magazine would get that.