Editor’s Note:
Phil Rubin is Founder, Grey Space Matters and a well-recognized and respected voice in the loyalty marketing industry. He pioneered discussions of stakeholder capitalism and first wrote about loyalty and media in early 2017, when Axios launched. That piece is relevant today, both for Axios’ success and for the latest issues at The Washington Post.
This is a timely post that highlights important considerations for any brand that seeks to be customer centric. The post is timely and illustrates key points with activity in the US news cycle. It is not meant to be a political post or to endorse any candidate in the upcoming election. It is intended to be a wake-up call for business leaders who seek to serve their customers while they face a stream of occurrences that can distract from that lofty objective.
Jeff Bezos, founder of Amazon and one of the richest people in the world, owes his fortune to marrying customer obsession and data. In 2013, that fortune allowed Bezos to purchase The Washington Post, one of three major national newspapers in the US.
Last Friday, the Post announced a decision to end a nearly half century tradition of endorsing presidential candidates.
As a result, within just a few days of the announcement, The Washington Post has lost 10% of its subscribers, so far a total of 250,000. It will lose more, as 50,000 of these losses came less than a day after Bezos published his own piece defending the decision.
Bezos asserted that there was “no connection” between his decision and Blue Origin’s CEO meeting earlier that day with former President Trump. Rather, he suggested that he and the Post were “complexifiers” for each other, apparently referring to the potential for conflicts of interest between his other businesses and the role and responsibilities of an “independent” institution like WaPo.
Clearly, Bezos put himself ahead of customers, data, and his employees, acknowledging that he is “not an ideal owner of The Post”.
These are all significant factors when it comes to customer loyalty, not to mention stakeholder loyalty. Reinforcing this point is that one of the editorial board resignations was that of Mili Mitra, its director of audience. Mitra undoubtedly knows how wrong the Bezos decision was for the Post’s subscribers.
The subscribers see the decision as putting democracy at risk and Bezos showing deference, if not fear, towards former President Trump.
Presidential endorsements at The Post began in 1976, after Nixon’s resignation from the Watergate scandal. The Watergate story itself was first reported by Bob Woodward and Carl Bernstein. 1976 was the first election post-Watergate. It’s worth noting that The Post has won more Pulitzer Prizes in journalism than any other newspaper besides The New York Times.
More recently, the Post has been a leader in its political coverage of the current and previous administrations, adopting the brand positioning and tagline “Democracy Dies in Darkness.” Indeed, this positioning and tagline were skewered in a cartoon on WaPo’s editorial page the evening of the announcement. Given the Bezos decision, the Post’s humor columnist, Alexandra Petri, did her own endorsement.
It’s essential to note that media companies rely on subscriber data for the success, both as subscriptions providing recurring revenue and to substantiate its “rate cards” for advertisers. It’s too soon to see what the advertising fallout from this will be other than advertisers paying less for a smaller reader base, inevitable with 25% subscriber losses. The Post has been dealing with financial losses and Bezos has yet to indicate he will further invest in the business.
The ultimate challenge for Bezos and his paper is the damage this decision has caused to its brand and the trust of its readers, reporters, advertisers and even its journalistic sources. Marty Baron, who was executive editor at WaPo until retiring in 2021, said that “this is not a way to instill trust, to stop endorsing presidential candidates less than two weeks before the election.”
While we live in polarized times, we also live in a time where stakeholder capitalism and brand purpose matter, at least to some. While many companies have retreated from such commitments, things go in cycles.
Bezos and The Washington Post should be thankful for this, as changes, including the potential for a new owner at WaPo, could regain that trust, and perhaps some of the lost subscribers.