[publishing] Amazon and the price of silence

Most of my adult life, my day job has been in sales, marketing or marketing communications. I’ve done a great deal of work in corporate PR, marketing, marketing communications, advertising, sales support and sales, all of it in a high tech context. Though I’m not a Wall Street or Madison Avenue level expert, I’m familiar with damage control issues, and I’m familiar with how publicly traded companies make formal statements in times of crisis.

Amazon’s behavior so far in their dispute with Macmillan has been a textbook example of how not to manage your corporate image, especially with respect to stockholders. This has not impacted their end customers much so far, I suspect, at least not outside the Kindle community where Amazon’s sole public statement still stands as official, having been made buried deep within a chat board, rather than via press release or public statement from a senior executive. (And I believe they’ve since confirmed it via email, at least according to a commentor on Making Light.)

In a word, this is bizarre. Contrast with Johnson and Johnson’s handling of the Tylenol murders, which is literally a textbook case in corporate PR under adverse circumstances. (And to be perfectly clear, I’m not for a moment comparing the Amazon-Macmillan kerfuffle to murder and a multimillion dollar product recall. Our issues here are a tempest in a tiny teapot compared to what was going on in 1982. I’m simply talking about how corporations respond to business crises.)

You don’t remain silent in the face of significant business questions. That spooks the shareholders, baffles your employees and suppliers, and (eventually, at least) causes your customers to lose faith in your brand.

You don’t make official corporate statements about a critical business issue through unsigned, obscure channels. That is such an abrogation of accountability that it’s ridiculous. You further don’t make those statements laughable, such as claiming that “Macmillan has a monopoly on its own titles.” That isn’t even good PR spin, that’s just silliness. And not even worthwhile silliness.

You don’t let your opponent (Macmillan, in this case) control the narrative, as CEO John Sargent did with his well written, reasonably phrased and very concise Saturday letter in Publisher’s Lunch. That’s such basic PR and image management that any college freshman could have handled this.

And you don’t remain silent in the face of a sudden multibillion dollar collapse in your market capitalization. Shareholders really, really hate that. Institutional investors tend to call emergency board meetings.

In short, for no discernible reason whatsoever, a Friday night hissy fit in Seattle over a supply chain issues has transformed into a “how not to” case study that will quite likely wind up side-by-side in business textbooks next to the Johnson and Johnson case study. Yes, Amazon’s business model is at stake. So is Macmillan’s. But if you’re going to go to war, as Amazon did with shutting down the print and ebook titles from Macmillan, your next step is not usually to spike your own guns.

This has gone from unreasonable to bizarre. And the degree of explaining Amazon has to do deepens with each passing day’s silence. So far, the price of silence has been several billion dollars.

What are they doing in Seattle?

8 thoughts on “[publishing] Amazon and the price of silence

  1. Aimee says:

    It is almost as if Amazon is floundering in internal meetings where no one is willing to make a decision – or maybe just ignoring the entire issue while assuming that the company is big enough to sail through on brute strength. Both prospects are hard to credit, but I can’t even come up with a *good* reason for them to be silent for so long.

  2. hellequin_jack says:

    One thought occurred to me this morning. I am wondering how much of people’s reactions to this debacle are a result of the WalMartization of America.

    One of the reasons WalMart has been successful is that they have leveraged their distribution and logistics channels to put the screws to suppliers. WalMart names the price they will sell something at and is willing to walk away from a supplier who doesn’t play ball.

    In several cases this has lead to the destruction of suppliers. Rubbermaid is a perfect example. WalMart shut down their relationship with Rubbermaid and ended a decade long partnership. They replaced the products with cheaper, less quality products.

    WalMart has consistently won a major part of the PR campaign. They may be tared and feathered as job killing, small town pillaging, overseas relocating pariahs, but when the chips are down they have successfully managed to get the American public to distrust Suppliers & Manufacturers. To the point that some of their PR comes off as “Yeah, we are bad, but these other guys (suppliers) are worse.”

    This view of Suppliers-as-wantabe-price-gougers and big box/big channel Distributors/Retail vendors as the moderator of Suppliers nefarious schemes is rather common amongst the American Public.

    I find myself wondering if Amazon in an exceptionally poorly executed fashion is attempting to be the WalMart to Macmillan’s Supplier. The meme that they would be trying to tap into is expressing itself strongly in the Pro-Amazon Camp.

    1. Aimee says:

      So they’re just “reg’ler folks” trying to protect customers from the Big Bad, huh. Considering how few news pieces even mention the full price *range* Macmillan is proposing, they’re obviously getting somewhere with this tactic.

      Of course, I know few people who are willing to shop at Walmart anymore. And yet, they succeed over and over. Argh.

  3. What really scares me is, what if it’s taking so long to put the links back because the Amazon folks don’t know what they’re doing?

    Also, I have to say you deserve some kind of medal for keeping your cool and maintaining a civilized tone with some folks who don’t seem to care that they’re conversing with a person whose income has been hijacked by a corporate decision beyond his control.

    1. Jay says:

      Thank you, Karen.

  4. Anthea says:

    Have you noticed that all of the news articles about this issue spin it to make Amazon look good? In particular, I don’t think I’ve read one news article (as opposed to blog post) that doesn’t misrepresent Macmillan’s pricing scheme as “raising prices from $9.99 to $12.99-14.99.” Not one of them has mentioned the lower price point.

    Seems fishy to me…

    1. Jay says:

      They’re certainly winning that part of the PR war, yes. I suspect the reason is that the only consumer-facing comment from either company has been the note on the Kindle board. That’s a straight lift from Amazon’s statement, and lazy reporting not to find out the Macmillan side.

    2. hellequin_jack says:

      See my post above.
      I blame the same thought line.

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