Last month I received an intriguing email from Barnes & Noble Press, which sells many of my company’s books on the bn.com website. It was about a new self-serve ad platform that could potentially help promote my books there. But my interest evaporated when it became clear that B&N was massively overcharging for the service, and lacking some other important features. This blog post will describe what happened, and what I hope B&N will do to improve its self-service ad platform.
Here’s the email I received:
|Advertise on BN.com via our self-serve advertising portal: We’ve made it easy to create effective campaigns–no marketing or graphic design know-how necessary. Give us your book’s details, and see your book’s ad appear on relevant BN.com category and genre pages, seen by customers most likely to become fans.|
This sounded great. I’m a heavy user of Amazon Advertising (see the blog posts and videos I’ve produced about Amazon Advertising) and I am always looking for new services that can increase sales on other platforms. B&N has struggled with its online businesses, but an easy-to-use ad platform could be something that helped both bn.com and publishers.
But what I saw after clicking the link stopped me in my tracks.
$12 CPMs? $300 minimum campaigns? “Self-serve” ad campaigns that involved someone contacting you in 2 days?
Let me explain what this means, and why I was so surprised.
CPMs, or “cost per thousand (impressions)” are a standard pricing format in the online ad world. $12 to show your ad 1000 times may not sound bad, but it’s actually vastly overpriced to many other platforms. Even $7 CPMs for larger spends (a million impressions for $7,000) is expensive.
I typically pay under $1 dollar on Amazon for 1,000 impressions that deliver, on average, a click-through rate (CTR) of .3% and a conversion rate of 8%. In other words, if I purchase one million impressions for $1,000 on Amazon, I can expect .3% of those impressions to turn into 3,000 clicks, and 8% of those clicks to generate sales of 240 books (gross sales just over $3,000). This generates a small profit for my company.
With B&N ads, I would be paying $7,000 for the same amount of impressions. Assuming similar CTRs and conversion rates, with a similar gross, I would be losing thousands on every campaign. In fact, according to some simple models I created, even under extremely favorable conditions (1% CTRs and 10% conversion rates), a standard 55% discount and no other production, marketing, or royalty costs factored in, it’s almost impossible to make money unless you’re selling expensive books with high margins.
A few other things gave me pause as well. Some sort of manual process involving a rep was required, and there was no indication it was possible to submit ad copy or images other than the front cover of the book.
The program was clearly going to be a major disappointment for every publisher who tried it. Fortunately, B&N almost immediately shut it down and reportedly offered to refund all early customers. A message on the website now says, “At this time we are no longer accepting new campaigns as we are currently at capacity for our beta testing.”
When it does reopen, I sincerely hope the CPMs will be more in line with reality, the tools to customize ads will be made available, and publishers of all sizes will have a shot at promoting their books on bn.com and expanding their businesses. The online book sales marketplace, now dominated by Amazon, needs healthy competition.