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Wal-Mart Vs. The Blogosphere

From Business Week:

Last week, Wal-Mart took a hit when bloggers on the Internet attacked the behemoth’s effort to burnish its image via its own bloggers, who were receiving compensation from the retailer for their efforts. The episode may turn out to be an even bigger public relations disaster for Edelman, the retailer’s PR firm. It culminated on Oct. 16, with a mea culpa from CEO Richard Edelman on his blog.

It all started last month, when a folksy blog called Wal-Marting Across America was set up. The site featured the musings of a couple known only as Jim and Laura as they drove cross country in an RV, and included regular interviews with Wal-Mart workers, who were dependably happy about the company and their working conditions. BusinessWeek.com wrote the first exposé about the blog. The story shot down speculation that Jim and Laura weren’t real people, identifying the woman as Laura St. Claire, a freelance writer and an employee at the U.S. Treasury department. But it also disclosed that Wal-Mart was paying plenty for the couple’s support, including money for renting the RV, gas, and fees for writing the blog (see BusinessWeek.com, 10/9/06, “Wal-Mart’s Jim and Laura: The Real Story").

Once bloggers heard that Jim and Laura had undisclosed benefactors, they were furious. Shortly after the story was published, it was revealed that the other half of the couple was Jim Thresher, a staff photographer at The Washington Post (WPO). The Post’s executive editor quickly made it clear that Thresher’s involvement violated internal ethics guidelines, and Thresher had to pay back any money received for the trip and remove his photographs from the blog. “Today, there’s nowhere to run and nowhere to hide,” says Paul Rand, a partner at Ketchum public relations. “The moment you hide something, you will end up being exposed and picked apart.”

CLEARING THE GROUND RULES

The Edelman firm may end up suffering even more than Wal-Mart from the mess. The firm says it’s solely responsible for organizing the RV trip via a group called Working Families for Wal-Mart, which is funded by Wal-Mart. The retailer declined comment. “We won’t comment on the RV tour, since it was a Working Families for Wal-Mart initiative and we didn’t have anything to do with it,” says Wal-Mart spokesman David Tovar.

As CEO Edelman says on his blog, his firm helped write the rulebook for companies trying to tap into the blogosphere. But his firm didn’t follow its own rules for transparency with the Jim and Laura blog. The first of six key guidelines, as spelled out by the trade group called the Word of Mouth Marketing Assn., is that “Consumer protection and respect are paramount.” The second: “Honesty of Relationship, Opinion, and Identity.” Outsiders marvel that the firm could go so far off track. “They certainly weren’t doing what they preached,” says Kevin O’Keefe, a lawyer-turned-blogger who founded LexBlog and helps law firms set up their own blogs.

The question in the blogosphere is: How could Edelman have tried to pull something like this over on us? After all, Richard Edelman has lectured blog writers, America’s largest companies, and even politicians on how to use this new medium. In February, the company hired Steve Rubel, a recognized blogging expert, to help it devise strategy on how to use blogs most effectively.

SILENT PARTNERS

In terms of PR strategies, Rubel last year told BusinessWeek that the first job for companies is to monitor the blogs to see what people are saying about them. The next step is to think of damage-control strategies. And when blogs attack, he says companies have to learn to track what blogs are talking about, pinpoint influential bloggers, and figure out how to buttonhole them, privately and publicly (see BusinessWeek.com, 5/2/05, “Blogs Will Change Your Business"). Edelman’s Web site states that, as senior vice-president in Edelman’s me2revolution practice, “Rubel is widely viewed as an expert on conversational marketing.”

Yet Edelman and Rubel stayed silent, even as the blogosphere called on them to speak out. Some calls were civil. Blogger Duncan Riley wrote an open letter to Rubel: “Your employer, Edelman, is embroiled in a pretty shady astroturfing scandal. A fake blog promoting Wal-Mart… I’d really like to read your take on this.” Others were more shrill. Shel Holtz, a fellow corporate communications expert, wrote on Oct. 13: “So where is Edelman in this particular conversation? Missing in action.” O’Keefe of LexBlog says: “On the worst day, you crawl into your shell and wait until the Internet stops.”

How the public relations firm handled its own PR quickly became the biggest story on the Internet. Both Rubel and Edelman write widely read blogs. On Oct. 16, Edelman finally wrote: “I want to acknowledge our error in failing to be transparent about the identity of the two bloggers from the outset. This is 100% our responsibility and our error; not the client’s.” And Rubel says: “Our firm failed to be completely transparent. I am sorry I could not speak about this sooner. I had no personal role in this project.” When contacted for comment, an Edelman spokesman said that neither of them would be available for an interview.

Posted by Laura Jack on Wednesday, October 18, 2006

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COMMENTS

Everyone’s sorry but no one had a “personal role in this project”. lol

When the Beast of Bentonville stumbles it crushes friends and foes alike.

Ken V in Texas
Wednesday, October 18 at 08:54 AM

This sounds like a new game of “Clue” . Whodunit? lol

Michelle in
Wednesday, October 18 at 07:54 PM

“For worse? A blog praising Wal-Mart called “Wal-Marting Across America,” ostensibly created by a man and a woman traveling the country in an RV and staying in Wal-Mart parking lots, turned out to be underwritten by Working Families for Wal-Mart, a company-sponsored group organized by the Edelman public relations firm. Not cool.”

How come it is COOL for a blog praising a bus campaign ostensibly created by WakeUpWalMart traveling the country and turned out to be underwritten by the UFCW union, but, it is NOT COOL, if Wal-Mart does much the same thing?

Bob in
Thursday, October 19 at 09:39 AM

......because Wal-Mart has a poor reputation to start with?

JM in USA
Thursday, October 19 at 03:11 PM

FWIW Bob this is an open to anyone out there blog--drawing in those pro and those anti. Anyone can pretty much come on spew out whatever is on their mind--more or less pertaining to the subject. It’s not a lets make up a bunch of stories and propagate some spin blog--which is reminiscent of the present day administration putting phony reporters at their press briefings.

larry in elmira, n.y.
Thursday, October 19 at 05:09 PM

A little off the topic here, but do you, or ever have you seen, a General Motors Watch? There’s a reason for that!

POWER TO THE PEOPLE!!! in Muncie,IN
Thursday, October 19 at 09:48 PM

larry in elmira,

“It’s not a lets make up a bunch of stories and propagate some spin blog-”

What are you talking about? Who’s making up a bunch of stories?

Bob in
Thursday, October 19 at 10:00 PM

“A little off the topic here, but do you, or ever have you seen, a General Motors Watch? There’s a reason for that! “

What’s the reason POWER?

-Richard K

Richard K in
Friday, October 20 at 07:08 AM

Richard K.

The reason there is no GMwatch is that GM is already unionized.

Another Bob in
Friday, October 20 at 08:54 AM

That’s right. It is unionized so the company has to listen to the workers concerns unlike poorly run companies like Walmart. You don’t see Toyota Watch (non union) because Toyota pays well and treats their workers fairly.
Walmartwatch exists because of Walmart upper management.

Remember Jonquiere. Home of Walmart workers abuse.

Alex in Ontario, Canada
Friday, October 20 at 01:39 PM

“It is unionized so the company has to listen to the workers concerns”

Close, Alex. GM is unionized, so they have to LAY OFF workers. By the 10s of thousands.

Mags in
Friday, October 20 at 02:00 PM

Mags,

I wonder, if a UAW union worker loses their job at GM or FORD, and doesn’t pay dues anymore, how long can they still call themselves a union worker? Don’t they become a non union worker at some point in time?

Bob in
Friday, October 20 at 11:27 PM

So Mags, since GM, Ford and Chrysler workers are union, and therefore must be making too much money compared to non-union (like Toyota), how much difference is there between an American/Canadian made big 3 vs. American/Canadian made Toyota cars which are non-union?

Alex in Ontario, Canada
Saturday, October 21 at 08:51 PM

Richard K - Wal-Mart is the only reason that there is a Wal-Mart Watch. If they took some “personal responsibility”, they won’t see blogs like this!

POWER TO THE PEOPLE!!! in Muncie,IN
Sunday, October 22 at 01:06 PM

POWER,

“Wal-Mart is the only reason that there is a Wal-Mart Watch. If they took some “personal responsibility”, they won’t see blogs like this!”

So, you are saying that the only reason this blog exists, is because Wal-Mart doesn’t take ‘personal responsibility’, right? In NO way, could it be that the union hasn’t been able to unionize Wal-Mart, so trying to get Wal-Mart employees to vote in a union, and that is the real reason for this blog? The dues from 1.5 million workers could not be reason enough for this blog to exist, right?

Bob in
Sunday, October 22 at 09:35 PM

“So Mags, since GM, Ford and Chrysler workers are union, and therefore must be making too much money compared to non-union (like Toyota),”

The differences are GM’s OPEB,(post employment benefits) which most people agree will force GM into bankruptcy. The sooner the better, I say. They other differences are the union contracts which specify that GM must run certain plants at 80% capacity regardless of profitablility, which keeps them from making rational business decisions. Taking the unions as a “partner” has screwed them royally. Want to talk about evaporated market capitalization, Ken V? (How can this be? They are a union company! They should be a huge success, right?)

The only way GM can survive is by getting rid of the freeloader retirees (hopefully in bankruptcy), and by closing down entire lines of cars in order to save on redundant SG and A that buys them no more business.

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