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.

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