A lot has changed since 2007 when industry observers proclaimed that advertising in eBooks would never be viable owing to insufficient eCPM (how much money you get paid for every one thousand impressions).
eBook Explosion. Weekly stories show dramatic eBook growth, including the US eBook market growing 76% from 2009 to 2010. Industry watchers now argue about how much total market share of narrative titles eBooks will account for (40%, 60% 80%) and by when. Individual readers are consuming more books today, putting downward price pressure on the industry.
Mobile Device Proliferation. Today, nearly 900 million people own ebook compatible mobile devices of which 92% can handle advanced functions and connect to the internet. This will grow to an estimated 2 billion by 2015. You’re likely reading this on a smart phone or tablet, just like you read most of your books today.
Mobile App Consumption. It’s estimated that over 300,000 mobile apps have been developed with downloads exceeding 11 billion. A bulk of the apps are consumed for free, and many support advertising as a way to monetize the apps for developers. 1 in 4 apps once downloaded are never used again. eBook apps are either delivered as standalone, dynamic Enhanced eBook apps, or through dedicated readers apps that consume static eBook content.
Mobile Advertising Growth. Gartner estimates mobile ad revenue increasing from $1.6 billion in 2010 to $20.6 billion by 2015. This revenue growth portends ever-improving mobile advertising platforms with increasing levels of sophistication in ad delivery, targeting, optimization and fulfillment.
These changes create market opportunities for publishers who will be looking to augment, not replace, their evolving business models as they make the digital transformation to an eBook-dominated world. Publishers can experiment with mobile advertising, including running house ads cross-promoting other titles to improve book discovery. Other publishers, like some non-fiction imprints we’re working with, will only want to take advantage of Enhanced eBook features, skipping ads altogether.
Advertising in eBooks is in a nascent state today, with a few titles and a few e-readers (Kindle, Kobo) experimenting with the model. Trapdoor’s experiment with ad-sponsored books begins with the release of Cyberkill, a free ad-sponsored Enhanced eBook with in-app purchase available to the reader at any time (don’t like the interruptions – then buy the book to turn off the ads).
Our early results show that contrary to what pundits said in 2007 about low eCPMs, we’re actually experiencing respectable eCPMs. The real challenges are in fulfillment rates and dialing in how much readers’ are willing to be interrupted by ads in exchange for a free book.
Advertising in eBooks? Yep, really.