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Lakeshore
An author of no particular popularity

Jay Lake
Date: 2010-02-03 05:54
Subject: [publishing] Amazon and the price of silence
Security: Public
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?

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kameron_hurley
User: kameron_hurley
Date: 2010-02-03 17:11 (UTC)
Subject: (no subject)
As somebody else in corp PR/Comm/Marketing (and with far less experience than yours!), I've been equally baffled. They've handled this situation (and the last Fail) out of the "worst ways you can possibly handle communications" portion of the crisis comm 101 manual. I've been using both Fails as lessons about "What not to do" with my team at the day jobbe.

Being in the business, I sympathize with disagreements that may arise between marketing/comm and the execs (comes with the job), but whoever's top dog in marketing over there either isn't being listened to or needs to be fired.
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barbarienne
User: barbarienne
Date: 2010-02-03 17:57 (UTC)
Subject: (no subject)
What are they doing in Seattle?

A lot of weed, maybe?
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Max Kaehn: Cash
User: slothman
Date: 2010-02-03 18:26 (UTC)
Subject: (no subject)
Keyword:Cash

I suspect (from years of observation of marketing departments from the distance of engineering) that they didn’t have the Kindle division firewalled off from the rest of the business, that the Kindle management had the access to pull Macmillan’s physical books without consulting other divisions (on a “better to seek forgiveness than ask permission” or “this is showing initiative!” pretext), and now Amazon is just holding its current position while a big wrangle goes on internally. If they haven’t been having urgent strategy meetings every day starting last Saturday, I would be very surprised.

I already gave Amazon my opinion on the matter and my Tor preorders are still showing up on time, so I’m giving them two weeks to restore normal Macmillan behavior before I go to the effort of moving a couple hundred wish list items over to another online bookstore and closing my account.

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jeffsoesbe: yeff yahoo avatar
User: jeffsoesbe
Date: 2010-02-03 18:46 (UTC)
Subject: (no subject)
Keyword:yeff yahoo avatar
One comparison might be something else playing out at the same time: Toyota and the stuck accelerator. Seemed like they at first said they didn't think it was a problem then once they realized it was, owned up to it and kept up a public communication about what was going on and how they were fixing it.

Of course, Toyota is an old-school company. Amazon is a new-school company. Maybe a difference in attitude towards everyone comes with that distinction.

- yeff
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derekjgoodman
User: derekjgoodman
Date: 2010-02-03 20:04 (UTC)
Subject: (no subject)
I hear a lot of people complaining about how Amazon fumbled when it came to PR, but I think maybe it was a calculated move. After all, despite everyone saying they could have handled it better, they did it in such a manner that made them appear to be the underdogs. They posted in a forum, basically telling the Kindle community, "Hey, we're just like you, and we're being bullied." The result is that public opinion, outside of author and publishing industry circles, really does seem to be on their side.
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Jay Lake
User: jaylake
Date: 2010-02-03 20:07 (UTC)
Subject: (no subject)
I'm starting to wonder that myself. Note that almost all the reporting in the mass media draws from the Kindle team letter and characterizes this as a price increase, without referencing either the dynamic pricing model or the low side of the pricing proposal. So it may be a very clever, subtle PR strategy.

It may also be one of those "never assign to malice genius what can be explained by stupidity" situations.
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