Wednesday, March 29, 2006

Seriously, why don't books have ads?

Over the weekend, I asked the question "Why don't books have ads?" It certainly provoked a reaction and the leaped blogged into Andrew Norton (on Catallaxy) with more comments to boot!

One reaction which was not surprising was, because it would be terrible. However, that isn't answer at all, that is a statement about what the world might be. My question is more targetted. If publishers (and authors) can profit from books in ads, why don't they have them? It is all about the money.

Here were would be explanations and my response:

  • Readers would not buy books: just as some people don't watch TV because of ads, of course some people would not buy books. But how many? Could it really be that most of the population is happy to see ads everywhere but a good book they will not read if they see a single ad? Add to that the cheaper price of books and this one doesn't stack up.
  • Authors would not write books: of course, some authors may want to distance themselves from grubby commercial stuff. Of course, I don't know any author who refuses to let their publisher promote their books! Again, this can't apply to all authors. Indeed, if ads were to make my textbooks cheaper, then I am all for it. Not to say that I would want to see a cigarette ad but an ad from a consulting firm as to how good an employer they are, sure.
  • Readers would not look at ads: in many respects, it is always surprising to me how much people look at ads in newspapers, tv, radio etc. It is not at all clear that books are anything special. Indeed, a book with a single ad in it will have that noticed. Even where there were instances of ads in books, such as for other books by the same author or publisher, they are noticed.
  • Books have small print runs: then the ad rates will be low. Ads are paid for by eyeballs. Low eyeballs means low ad revenue but it doesn't mean no ad revenue.
  • Some books have (had) ads; travel guides, help books and self-promotion: these are interesting but are still small enough that my question's premise is still justified. Nonetheless, it is interesting to think about why self-promotion ads happily appear in books. By the way, they are not in the Harry Potter series but I suspect that is author intervention. But they are in lots of other children's books. Perhaps my question could be rephrased: why don't books sell ads?
  • Advertisers demand glossy colour ads that it would be too costly for books to provide: this doesn't seem at all plausible a reason. First, there are many books that are colour and glossy (my Principles of Economics book for one). Second, a page of colour printing in a book will cost the same as a page in a magazine. The issue is that in one case the publisher gets the revenue to cover it and in another it does not. Third, not all ads are colour glossy. Google is the biggest ad seller in the world and they are as plain as plain can be.
  • Ads are time sensitive, books are not: Let's compare this with magazines. First, I am not sure ads are all necessarily that time sensitive. All the marketers tell me is that to get brand names that are lasting is key. How could it be that a corporate image is fleeting? Remember ads are not simply to inform about current promotions but to build recognition, value of association, etc. All this might make them very suitable for books. Second, not all books are so long lived. Textbooks go out of date. Bestsellers have their limited life. And books can be reprinted to update the ads. Compare this to the magazines still sitting in waiting rooms over the world. (Also, as we move to e-books, then ads can potentially update over time but I admit that that is the future -- more on this below).
  • Advertisers would not buy ads because they cannot control their impact: this suggested that there was something intrinsically uncertain about the nature of book readers that isn't shared by other media. Now it may be that because of the lack of ads in books they do not have the more sophisticated ratings data of TV, radio and newspapers but how hard would it be to build that up? Even if a book turned out to be selling to a surprise demographic, the ads could be changed in reprints.

In summary, many of these answers are explanations as to why all (or most) books do not have ads but not explanations as to why (virtually) none have them. As an economist, I like thinking at the margin. That is a powerful tool as it usually leads to a conclusion that we are not at corners. When something doesn't occur, there would be a glaringly obvious explanation. Here, I have yet to find it.

Put simply, the current state of affairs does not seem robust. One publisher of one book somewhere should be able to find a price at which they can sell one page of that book to one potential advertiser out there. That we don't even see that is the real puzzle, let alone a more ubiquitous state of affairs.

That said, I think change is coming. E-books will get around even the most salient explanations posted by blog commentators. Advertisers will be able to embed hyperlinks in the margins of e-books. They can be updated and moreover the advertisers could pay for ads viewed so there would be no issue of monitoring.

Hang on a second. Someone has already thought of this. Click here and scroll to the bottom of the page for the future.

5 comments:

Matthew Kwan said...

Another point that sprang to mind concerns the dollar value of ads. Advertising fills up half or more of a typical newspaper or magazine, and probably knocks a few dollars off the cover price (and makes it free in many cases). This is a significant reduction in price, and allows them to reach a mass audience.

But how many ads can you put in a book? A dollar's worth? And, given a choice, how many customers would choose a $29 book with ads over a $30 book without?

Having said that, an obvious candidate for ads are cookbooks. The advertisements may even add value for the reader.

Here's a question for you Josh - why don't you put ads in your lectures?

Andrew said...

Joshua - The vast majority of books sell very few copies, and it would be impossible to find a good sample of their readers through random polling.

Apart from highly specialised publications where the readership is predictable, only books by bestseller authors are likely to be at all attractive to advertisers, and these authors are the people most likely to be able to afford to say that they want an unsullied product.

As I noted at Catallaxy, a lot of the self-promotion ads are just filling in the spaces created by the printing process, and are a case of easy targeting - its much easier to predict that a person reading a Harry Potter book might like another Harry Potter book or some similar book than it is to predict what other goods or services they might want, though retailers are now collecting data that will help them with this.

Joel said...

You might be able to make a lot of money if you take them on at their own game and start selling advertising space in all your books! Go on Joshua, put your money where your mouth is!!!

Joshua Gans said...

I am way ahead of you. Discussing doing just that with the publisher for the next edition. At the very least there will be inserts galore.

Interestingly, in terms of product placement that price is currently negative. If I wanted to mention Coke or something, the publishers would have to pay Coke. Anyone out there interested in a positive price for product placement, let me know.

Tony Healy said...

Joshua, I think the answer is simply that newspapers and magazines out-compete books in attracting spending by media buyers, and they do that for a variety of reasons.

Newspapers and magazines specialise in providing readers' attention to advertisers. They have trained readers to seek them out each day, week or month, and that's what advertisers want.

Most of the specific issues that have been raised turn on the amount of advertising revenue that a book could charge, which is generally too low, in a competitive environment, for the process to be feasible.

This discussion relates to print books, not online. Your initial post was about print books.

Newspapers and magazines are persistent platforms where ads can run for days or weeks, whereas books are one offs. Not only does this give newspapers and magazines a competitive benefit, it also gives them economies of scale and thus cheaper rates for reaching a given readership.

Also, most print advertising is tactical. That is, it's concerned with promoting a product or service rather than establishing a corporate identity, which tends to be done on expensive TV spots.

Thus most print advertising is time sensitive. Marketing managers want their ads to reach people next week, not anytime during the next five years.

Anyway, an interesting question. What's your next one?