Fallout from the retailer's "astroturf" blog scandal may end up hitting PR firm Edelman the hardest
Last week, Wal-Mart (WMT) 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."
Retail giantWal-Martsaid that it has parted ways with a public relations firm whose employee was found to have posed as a reporter at an event staged byWal-Martcritics.
Wal-Martspokesman Steven Restivo said in a statement Friday that his company and Mercury Public Affairs had mutually decided to end their "business relationship." Mercury had received $60,000 to lobby officials at Los Angeles City Hall over a proposed Wal-Mart grocery in Chinatown, according to city records.
"We take this matter seriously and have taken the appropriate steps to ensure this type of activity is not repeated," Restivo said.
The announcement came one week after the employee group Warehouse Workers United revealed that Mercury senior associate Stephanie Harnett had shown up at one of its news conferences and posed as a USC student journalist. During that event, she recorded an interview with a worker, according to the group.