Not good enough, Amazon

Its new disclosure policy doesn’t go far enough

This column appeared March 10, 1999, in the Online Journalism Review. Here’s the version on the OJR site.

By J.D. Lasica

If there were a doomsday clock for Web ethics, it would surely be approaching midnight. Nearly every week the line between editorial and advertising blurs a little more, and the gulf between old media and new media mindsets grows ever wider.

The year’s most famous culture clash between old and new media, of course, came with the Feb. 8 disclosure in the New York Times that Amazon was accepting “co-op placement” payments for titles that it recommends on its editorial section pages. Turn to this week’s Literature & Fiction section and you’ll find “Evening News: A Novel” by Marly A. Swick touted under “Fine New Fiction”; turn to Mystery + Thrillers and you’ll find Laurie R. King’s “A Darker Place” heralded under “New and Notable.” Amazon received payments from the publishers for running the books under those headings. (Amazon does not, and never has, accepted payments to alter its best-seller lists. And, to be fair, it receives no payment for most titles it recommends.)

The day after the Times story, Amazon turned on a dime and amended its policy, and it should be applauded for that. But it didn’t go nearly far enough.

The company agreed to provide a disclosure statement, linked from its home page, explaining the kinds of payments it accepts, and it offered customers full refunds for any book that it had recommended. (I should pause here to explain that co-op placements are common in the book retail industry: Prominent book displays in bookstores are one example of book publishers shelling out beaucoup bucks to promote a title. And Amazon is hardly alone online: Barnesandnoble.com charges publishers $10,000 to $25,000 to set up a three-month “Brand Boutique,” or promotional site within a site, Publishers Weekly reported in its March 8 edition.)

Amazon’s media-savvy response did the trick: When March 1 rolled around and the company unveiled its disclosure statement, it didn’t register a blip on the media’s radar.

The new front-page link — heavy on the obfuscation — reads: “Learn about our supported co-op placements.” Click through and you’ll find Amazon’s estimable disclosure statement, along with its gentle protest that “for a store to make this kind of information available to customers is an unusual step.”

True enough. But Amazon fancies itself as more than a “store.” It aspires to be an independent editorial voice for book lovers. That is to say, a publisher. Indeed, Amazon recruited and assembled a cadre of editorial talent — editors, reviewers and freelancers hired to write book reviews, author profiles and interviews, and reading recommendations. It has positioned itself as an alternative voice to independent book reviews, literary journals and dusty old book sections in the Sunday newspaper.

It was a brilliant stroke: If Amazon’s recommendations were deemed sufficiently trustworthy and unbiased, book buyers need not look to other sources. The strategy appears on track, as evidenced by the loyal throng of users who read its reviews and order its inventory (including yours truly). Amazon’s revenues are expected to exceed $1 billion this year. Young people, especially, are more apt to buy from Amazon than walk into their neighborhood bookstore.

It’s hardly surprising, then, that many readers felt betrayed when they learned of the hidden practice, forcing Amazon’s abrupt about-face.

But does Amazon’s new disclosure policy settle matters? Does disclosure go far enough, or does there remain a whiff of dubiousness lingering over the company’s editorial recommendations?

Amazon says this: “If a book doesn’t meet our standards, we won’t feature it for any price. Period. Our editors regularly reject titles that don’t make the grade. … We don’t sell our reviews, and we don’t say a book is good just because it’s a publisher-supported title. … We would never trade our long-term relationship with you for a single sale. It’s not the way we do business.” (Amazon did not respond to a request for an interview, but if it does, we’ll update this article immediately.)

In other words, Amazon says: Trust us.

I say: I’ll trust your recommendations — but only after you’ve built a firewall between business and editorial.

I suspect Amazon’s editors are decent, honorable people. But does anyone seriously believe that any editor would ignore the implications of dissing a major title with big bucks behind it — on a regular basis, no less?

Take “Monica’s Story.” The only glowing review of the book that I’ve come across resides on Amazon (“gripping stuff — porn, fantasy, farce, political commentary, and tragedy all rolled into one”). Oh, and by the way, Amazon also received a co-op placement fee for the title. Coincidence? I don’t think so. (Thank God for the readers’ comments: “Don’t Waste Your Money! She Lies!”)

[Note: Within two days, all the readers’ comments critical of “Monica’s Story” had been removed from the site.]

Even if the positive review and the payoff — er, payment — are a coincidence, appearances suggest otherwise. But there is something Amazon could do to counter that impression: Establish a strict policy that forbids the business side from revealing which books are slated for a co-op spot. Any title that isn’t selected by an editor could be highlighted and promoted in a different spot on the page. (In print we have a name for this: advertisement.)

What I’m suggesting, in short, is that if Amazon wants to play media company, it has to start abiding by some time-honored practices. To protect its integrity, the New York Times on the Web is formulating editorial guidelines to ward off any suggestion that its book reviews are influenced by transaction fees (sites receive a cut of the sales price when they send a buyer to sites like barnesandnoble.com). Other respected publishing companies are doing the same. Credibility demands that such walls remain firmly in place.

There’s another take on all this, one put forward by Nora Rawlinson, editor-in-chief of Publishers Weekly. In an interview Monday, she used the word “naive” five times to describe readers who trust the recommendations they see on Amazon or any retail site.

“It’s naive of people to expect that someone in the business of selling a product will be completely honest when talking about that product,” she says. “People have to become educated consumers. People have had this idea that the Web is a warm, fuzzy place, exempt from the practices of grubby retail. I suppose some of these people are the same folks who don’t realize that the reason Cap’n Crunch is at eye level in the supermarket aisle is because the cereal manufacturer paid for that. Well, Amazon is a retailer, and they’re no different.”

I respect her skeptical eye, but I think she’s wrong about this. We’re entering a new era where editorial and commerce intersect in new and extraordinary ways. E-commerce is the key to survival on the Web. Within the year, old media companies will be stampeding to get in on the action. The answer is not to stand above it all and dismiss media sites that engage in electronic retailing as having lost credibility because they’re out to sell products. In a few years, most media sites on the Web will be retailers. (Perhaps including Publishers Weekly Online.)

The answer is to determine what you stand for, devise methods to ensure that those standards are met — and enforce them. The answer is to earn and keep your readers’ trust.

Why pick on Amazon? Because it’s the biggest and best new media company out there. (Sorry, Yahoo.) Because it sets the standard for the rest of the Internet industry. And because public opinion changed the policy of one of the world’s biggest corporate giants — overnight.

Only one question remains: Will Amazon take the steps needed to establish itself as a truly independent, honest source of editorial recommendations? Or will it look inward and discover the soul of a retail huckster? If Amazon is bent solely on trying to become the Wal-Mart of the Web, it should leave publishing responsibilities to sites we can trust.

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JD Lasica
Written by JD Lasica
JD Lasica is an entrepreneur, author, journalist, photographer and blogger. | CONTACT