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Making Money Marketing

By Evan Schnittman

12 years ago I learned an incredibly valuable lesson about marketing that has influenced how I see business development and many aspects of electronic licensing. In 1996 I left my job in traditional publishing and entered the test preparation industry at a company called The Princeton Review(TPR). TPR was an incredibly well known brand and this made the company seem huge from the outside – but at its core it was very much a small operation that had managed to become a household name.

How TPR managed this feat has a lot to do with book publishing. John Katzman founded TPR at the kitchen table of his parent’s apartment in 1982. Early on, with the help of well-known NYC tutor Adam Robinson, he began to uncover the patterns and systems behind standardized tests. As Katzman’s business grew he realized he needed to create a much larger presence for his fledgling company than any reasonable marketing budget could afford. Katzman understood that brand building was an extremely expensive proposition and looked for alternative ways to create name recognition. Tapping into the brand power of the word “Princeton” was a start. However, the bigger break came from exploiting a key weakness in his competition.

The competition was Stanley Kaplan who was a teacher in Brooklyn with a gift for tutoring. In the wake of the post war boom in college admissions, more and more universities began accepting the SAT as a means for evaluating students. Kaplan parlayed this boom into a quickly growing business (in the late 1950’s he tutored my father), where he used his “secret” methods to raise scores and improve students’ grades. Stanley kept these secret tools locked in a box on his desk, thus adding dramatic effect to their importance. Over the years Kaplan grew into a national company that was eventually purchased by the Washington Post Company and is valued at nearly $2bn today.

Back in the late 1980’s, when Kaplan was still a privately held $250mm company, Katzman realized that the key to building his business would be to broadcast his “secrets” and methods by giving them away in books. Katzman had a hunch that while many students would fare well using his proven techniques, the true path to success lay in how the techniques were coached and tutored. He noted that Kaplan had never published books on the SAT because that would be giving away course secrets in low price-point books. Katzman reasoned that a student who wanted, needed and could afford a $1,000 test prep course would never think that a $20 book would replace a course.

So Katzman, hoping to exploit Kaplan’s weakness, signed a deal with Random House to publish, “Cracking the System.” With some luck and a fantastic effort by RH, Cracking the System became a NY Times best seller and went on to create a national presence for TPR as well as laying the foundation for a whole line of books published under a Princeton Review imprint.

When I entered the company a few years later TPR had already started publishing college guides. These guides had been, like the test prep industry, dominated by a couple of brands. One key difference to the approach that TPR took was that it secured digital rights for the titles so that it could build a web based platform that contained all the data found in its guidebooks. Though Random House was never thrilled with the free content being out there, TPR launched a free website that had over 2mm unique visitors a month primarily viewing the same content that was available in the books that Random House published.

So what happened to the books? By my recollection they grew about 20% per year – it seemed that the more visitors that the TPR site had, the more books we seemed to sell. Free content was driving book sales and expanding the brand! The free content was interesting, it was intriguing, it was fun to play with – but 10 years later there is still a thriving book market for college guides even though almost every company that collects college data posts the content free online. 100% free content can drive print sales!

There are plenty of stories like this in publishing – perhaps few with such a long-standing performance record. These models should be looked at very closely because they do more than just improve a brand. I think publishers can exploit individual products through similar efforts. What I mean by this has to do with free ebooks.

Wowio is a site that gets sponsors to pay for ebooks that are in turn downloaded for free by the end user. Publishers receive a minimum of $1 per download, more if a particular title attracts a particularly high end sponsorship opportunities. Typical sponsorships are sold to companies such as Verizon and Ford – companies that see college educated upper middle class consumers, you know, book buyers

I was reminded of the Princeton Review story after seeing some interesting news from Wowio. The Association of Canadian Publishers is behind an effort to get Canadian Publishers to venture into digital. Among them is the selective use of Wowio as a platform. I found this in Quill and Quire “Insomniac Press publisher Mike O’Connor is also finding that Wowio downloads, which for now are available only to U.S. users, are boosting physical sales, mostly through online retailers. “We have seen instances where there will be a spike in a particular title in downloads, and you’ll see an uptake to a certain degree at Amazon in fairly short order,” he says.”

What is fascinating about the Wowio opportunity is how the free ebooks are driving print sales. So what does this mean? In my last piece, Do I believe in Ebooks?: Part 2, I explored the notion that ebooks were best seen as a tool of convenience and not as a primary, stand alone reading experience. To that end I proposed that a license for the ebook be granted to everyone who purchased the new print book. Here we use that strategy in reverse. Instead of enhancing the convenience of print with e, we give away e to drive print book sales. The goal is the same though, stimulating the print market.

I am not advocating that we put everything in Wowio because not every title will fit the Wowio profile. I do believe however, that the publishing industry should be more aggressively looking at opportunities where free electronic content is used to generate print sales. Whether it is expanding the amount of free content on search engine discoverability programs or sending out free ebooks to loyal customers or allowing fan sites and other myspace/facebook opportunities to have more and more free content – I believe it will all result in more print sales.

But why stop there? Why not open up certain content on Google Book Search or Microsoft’s Live Search Books to be 100% free? I am quite sure that both companies could be convinced to license some content for 100% free access – which means you can experiment with this kind of model while getting paid… just like Katzman got paid to build his brand. Got a travel line you want to compete with Fodors, license them to Google and give it away on Google to build your brand. Have a series of restaurant guides to compete with Zagat, license them to Microsoft and give them away free on Live Search Books. Build your brand (while getting paid) and the sales will follow.

Evan’s PictureEvan Schnittman is OUP’s Vice President of Business Development and Rights for the Academic and USA Divisions. His career in publishing spans nearly 20 years and includes positions as varied as Executive Vice President at The Princeton Review and Professor at New York University’s Center for Publishing. He lives in New Jersey with his wife and two children.

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  2. anonymous

    Interesting to consider that while the availability of free e-content apparently drives print sales, it may not drive the sale of additional e content. Thinking specifically of the NY Times website and their “Times Select” experiment, which obviously did not quite work, even with their stellar brand name!

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