Is eBook Advertising the Next Big Thing?

Have premium advertisers been missing an major opportunity - eBook advertising?Take a look at the statistics:

  • Over 80m ebooks were purchased in 2013 - up 20% on 2012 - accounting for 1 in 4 consumer book purchases.
  • About 20% of UK households have eReaders - and if the demographics of UK eReader owners reflect those in the US, most of those households consist of affluent baby boomers.
  • About 30% of UK household have tablets - again, tablets are more likely to be used in affluent households although the demographics are younger (they're primarily used by those 25-54). Over 1/3 of those tablet users are using their devices to buy and consume ebooks.

So you have a medium which is growing in popularity and reaches a premium audience across a wide age spectrum. By combining ebook contextual data with demographic and behavioural data gleaned from other sources, surely it will be possible to deliver highly relevant advertising to consumers within ebooks - a new route to market for premium advertisers and a new source of revenue for cash-strapped authors?That's certainly the view of Brian Altounian, CEO of WOWIO Inc, a US company that has patented the concept of ad supported ebooks in the US. His view is that the 'free content in return for ads' model is already well established in other areas of digital publishing (magazines, music) and that it's only a matter of time before it takes off in the ebook market too. Voracious readers will jump at the chance to feed their habit at reduced or no cost and ads will be a small price to pay. And advertisers will access a premium, engaged market and one that is engaged for longer than they are with a magazine or a streamed piece of music.It all seems very convincing except when you discover that WOWIO has held its patent since 2010 and ebook advertising still hasn't taken off in the US. It's not as if the ebook market is one in its infancy - there are even some recent signs that it's reaching its peak. Perhaps the same reason that print book advertising hasn't taken off - readers engaged in a good book don't want to be interrupted by advertising - will stop ebook advertising taking off too. And the fact that the ebook's primary market - older demographics - are more ad adverse than their younger counterparts is holding things back.Altounian is right in one respect - looking at how the rest of the digital content market is going, free ad-funded ebooks are probably just a matter of time. It's just that the time isn't now. However, one foray into ereader related territory we believe does have contemporary legs is Amazon's Kindle Fire advertising.Buy a Kindle Fire HD or HDX and consumers have the option to buy a version with or without special offers. Buying the version with special offers will save them £10 and means Amazon can serve them ads.Those ads are intrusive - they only appear on the lock-screen and via a link on the home screen to a full list of sponsored deals - but think about the potential power of that advertising. How much does Amazon know about our browsing history? How much does Amazon know about our purchasing history? How well can those ads and sponsored deals be targeted?It may be an opportunity that the other dominant players in the tablet market - Apple, for example - wake up to. If so, it represents a promising channel for advertisers and a threat not just to the nascent growth of ebook advertising but to the continued development of magazine tablet edition advertising. It's certainly going to be interesting to see how things develop.

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