October 15th, 2006

Edelman, Wal-Mart and the Loss of Control in Media

by

It’s inevitable that a PR firm like Edelman would create a phony blog for one of its clients (in this case Wal-Mart — see Shel Holtz for a great analysis). For all of the hype over “conversation” as the new media paradigm, no one has yet figured out how to use conversation to reliably achieve any business objectives. So Edelman naturally fell back on the approach that has worked for decades — control the conversation by manufacturing it, because if you can’t control the conversation, then you can’t make it do what you want. Edelman wanted to make consumers think that Wal-Mart is a hip place that you’d want to use as the anchor point for a roadtrip. The problem is it’s not. And because blogging is not a conrol-based medium, Edelman couldn’t make Wal-Mart appear to be something it’s not. It rang false, and they got caught.

The control infrastructure of media is beginning to unwind. Copyright holders can’t control the distribution of their content. Brands can’t control their images through mass advertising. So, gripped by fear, brands and media companies are embracing the new paradigm of ceding control and engaging in a conversation. The problem is that no one has figured out how to make money in all instances by letting people run off with their content and brands, as wonderfully liberating as it all seems.

If you have a great established brand like Apple, or a great new product, like an iPod, then sure, let people run away with your brand, because most people will say good things about it and encourage other people to use it. But if you have a problematic brand like Wal-Mart or GM, where a lot of people think your product/service is socially irresponsible, for example, then letting people control your brand is going to perpetuate your image problem. The only real solution is to improve your product or service — which is a lot harder than vague notions of “conversation.”

As for ceding control of your content, look at what happened to the music industry. Illegal file sharing crippled music sales, and the only saving grace has been the iTune platform, which functions by rigidly controlling distribution.

Media companies cutting deals to distribute video content will profit IF the “free” distribution is only a promotional channel and most people still consume that content on channels that those media companies control. But if distributed platforms like YouTube become the preferred channel for video content, then those media companies will lose the control mechanism that enables them to profit — and they’ll be left with whatever revenue Google, with its ultimate control over information pathways and distribution, chooses to “share” with them.

  • Mary

    I happened to attend a conference on Web 2.0--The Future of PR in NYC last week. Steve was one of the presenters. They all talked on and on about how to harness the power of the internet through "engaging customers in authentic conversations"...lots of PR Speak, but not much substance or "how-to's.". Personally, I felt the only interesting information centered on whether PR/Marketing folks will try and infiltrate the "authenticity" of the internet "conversation." I pointed out that the internet is so powerful to consumers because at the tips of their fingers they can get real, unbiased, helpful information on most anything--including brands and products. But as soon as it becomes obvious that you can't trust if the info is real or manufactured (which I pointed out is often quite apparent), than the internet will no longer be a powerful (trusted) tool for consumers. They will reject the blogs as suspect and/or they will shun the brands and products who are trying to manipulate the internet. Either way this PR ploy will fail if it is not genuine. I believe marketing on the internet can be done. Endorsements have worked in traditional marketing and I'm sure brands can be upfront about asking for customers to share their positive experiences on their websites. This may not be slick or clever, but it beats false advertising anyday!

  • PJ

    Walmart stores stink.

  • I find the actions of Edelman no more egregious than the typical CBS, ABC, CNN, or NPR diatribe spewed out daily. To say these organizations are objective is laughable. We no longer have objective news, just opinion and 30 second sound bites.

    Walmart is at war with UFCW, (United Food and Commercial Workers Union). Why is no one reporting on the thousands of bogus complaints by the Walmart haters? The UFCW has a large playbook and will stop at nothing to keep on discrediting Walmart. Edelman has to come up with creative ways to combat this vicious attack by UFCW that no one is reporting on. This is simply an example of another "in-the-trenches" Walmart is having to do to try and counter the UFCW onslaught.

    You aren't finding many places condoning what Edelman did but I want to make damn sure that everyone recognizes the tactics of the unions agianst Walmart. This comment may be only 1 in 5,000 places you'll be seeing this, certainly not in the newspapers or the television news.

  • I’m sure Edelman and Wal-Mart thought they were just “experimenting” — there’s a lot of shareholder value to be destroyed with failed experiments.

    Yes, and there's a lot to be gained, too. I'd have thought Edelman would know better, though, given the things I've heard and read from Rubel.

    so much of the hype around “conversation” and ceding control makes it sound easy, when in fact doing it in a way that achieves business objectives is actually really hard.

    I agree, which is why it's important to keep trying new things. The question is whether the new things you're trying are reasonably smart... or not.

  • Mario

    Just more evidence that that "Micropersuasion" guy has absolutely no clue what he's talking about.

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