Flog-funding Edelman PR Firm and Sheep Offer Chump Change in Bogus Contest

by Urizenus Sklar on 18/11/06 at 3:26 am

If You Lie Down With Dogs You Wake up with Fleas. But What Happens if Sheep Lie Down with Dogs?

The SL Blogosphere has been all a twitter about the joint initiative between the Electronic Sheep Corporation and the Edelman PR firm. Part of this initiative is a prize with a value of $2500 for the person who comes up with the best SL Business Plan. 3.D’s Mark Wallace says he “absolutely love[s] this idea”, the never-vigilent SL Blingsider offers that “Edelman is entering the world of Second Life without any overt marketing agenda” and “cautiously applauds” the plans. Even the usually wary Tony Walsh passes along the contest news without comment (but at least worries about Edelman’s involvement in the Grid Review news broadcasting idea). Below the fold we’ll get into why this offer of chump change is just a gimmick, but first, doesn’t anyone know who these guys are? No? Let tell you who the Sheep are in bed with. Here are some factoids about the Sheep’s business partner Edelman.

Dateline March 7: the NY Times reported that Edelman was engaged in contacting bloggers behind the scenes, feeding them pro-Walmart stories to be published without revealing Walmart as the source.

Dateline Oct. 8: Business Week reported that these guys concocted the idea of funding the Walmart Across America trip by two “ordinary Joes” but, um, forgetting to point out that Walmart was paying for the trip.

But wait, there’s more. Much more…

Caught red-handed, Edelman apologized on Oct. 16, and then (Oct. 20) they concocted a lovely band-aid solution in which they required employees to take a course on “ethics in social media” to be held at…wait for it…Edelman University “before the end of the week”. Must have been one of those “learn ethics on a Friday afternoon courses.”

Well at least they admitted their mistakes, right? Wrong. Edelman’s apology neglected to mention two other fake blogs (flogs) that came to light a week later. One of the was “Working Families for Walmart”, where posts were paid for by Edelman, and the other, irony of ironies, was a flog called “Paid Critics of Wallmart” in which they paid people to criticize allegely paid critics of Wallmart. (For now we’ll remain neutral on the additional allegations that Edelman offered some sort of unspecified incentive to the Consumerist if they would stop publishing negative blog posts about Wallmart).

Fortunately, there is an organization that polices this sort of thing for the PR biz, called the Word of Mouth Marketing Association (WOMMA), and they are pretty clear this sort of behavior is a no no. In particular WOMMA’s self-described mission is to “set standards;” and “protect consumers and the industry with strong ethical guidelines” and WOMMA’s Code of Ethics echoes the FTC regulations “when there exists a connection between the endorser and the seller of the advertised product which might materially affect the weight or credibility of the endorsement (i.e., the connection is not reasonably expected by the audience) such connection must be fully disclosed.” So Edelman must have been busted by WOMMA, right? Well…

This is where things hit a bump in the road. It seems that *initially* WOMMA gave Edelman a pass, citing their plans to clean up their act and the ethics course and all (remember? The one at Edelman University?) but then it was revealed that something was amiss: People observed that the Treasurer of WOMMA was Rick Murray — the freaking president of Edelman’s Me2Revolution practice – you know, the outfit that handles the social media PR for Edelman. Oh, did I forget to mention that he is also the guy that was brought in world for a panel with the Sheep just yesterday!!!!?????

This is how Amanda Chapel described the sordid little affair involving l’affaire Walmart and our new resident of second life:

Do you know that this elaborate soft-shoe dance at the Word-of-Mouth Marketing Association did regarding the recent Edelman/Wal-Mart blog fraud, was all because Edelman PR is a major funder of the organization? Rick Murray, WOMMA’s Treasurer and member of their Governing Board, also heads the “Me2Revolution,” the very Edelman practice responsible for social media.

Hmmmm. Here, let me put it more plainly: thief secretly pays off judge; judge gives thief a pass; judge makes broad public announcement of thief’s commitment to ethics; public fooled; judge then assists with the cover up by then frustrating media inquires.

Even the anti-strupette, B.L. Ochman called from Edelman to be thrown out of WOMMA: “It’s time for the Word of Mouth Marketing Association (WOMMA) to throw Edelman PR out. Edelman clearly violated WOMMA’s ethics code, not once, not twice, but for four times. Or doesn’t the code mean anything?”

Indeed, as I write, Edelman has finally been censured by WOMMA, is under a 90 day review, and may well be thrown out of the organization, according to Crayonista Joseph Jaffe’s latest podcast (#63).

Adding insult to embarrassment in all of this is the paltry sum of money Edelman and the Sheep have offered up to the prize winner. The 350,000 Lindens in prize money is currently less than $1300, so even if you add in the cost of a sim, which at current prices is less than $200/month, we are talking about a total value of $2,500. Are we supposed to be impressed by this amount? According to Strumpette’s Amanda Chapel (personal communication) this is chump change for Edelman:

$2,500 to create and launch a business for 6 months… I mean c’mon. In RL, Edelman would likely charge 10 to 20 times that the first month… for account prep!! Edelman VP [Steve] Rubel has got to be billing $400/hr. So it’s the equivalent of maybe one day of his time to launch a business. It’s beyond ludicrous; it’s insulting.

And you know, it’s really even much worse than this. In a recent blog post cseven csven has pointed out that these guys have made no promise to actively protect your intellectual property the way the agreement is drawn up:

if someone enters this competition, they had better do their due diligence to ensure their Intellectual Property is at least somewhat protected, because neither Edelman nor ESC is likely to protect someone’s potentially-patentable business idea. People will have to get the patent on their own… and pay for it by themselves. That’s no trivial expenditure.

But as cseven csven also points out, given the time deadline on the contest there would be no time to apply for a patent, and worse, partipants retain no control over the disclosure of information in the interim. Note this passage from the contest rules.

by entering each entrant grants Sponsor the right to use the Business Plan and entrant’s Second Life avatar name and likeness in all forms of media now known or hereinafter developed in connection with promotions surrounding the contest and future similar contests, and to publicize a high-level description (one paragraph or less) of each submitted Business Plan, in the event that this business plan is selected as a winner or runner-up in the contest. Sponsor agrees not to prematurely share Business Plan concepts in such a way that could threaten the success of the proposed business, at discretion of Sponsor.

I especially like the “at discretion of Sponsor” line. These guys are good at what they do, give them that.

Well what are we to say about this? One thing is damn sure: we all have to start being more vigilant about these links with real world corporations. Second Life corporations are babes in the woods and I genuinely feel they are going to get jobbed by some of the seedier real life corporations they are so eagerly jumping in bed with.

And of course one doesn’t have to be Prokofy Neva to worry about the kind of PR advice that Edelman might be giving to the Sheep on the side, nor even what kinds of scams Edelman might cook up to pollute out little corner of the blogosphere. Especially if they control the SL media outlet the Grid Review. Wake up, everyone!

31 Responses to “Flog-funding Edelman PR Firm and Sheep Offer Chump Change in Bogus Contest”

  1. Eloise

    Nov 18th, 2006

    In a former job, comfortably but not well paid, I wrote applications for grants to continue my work as well as teaching. A business plan for the next 6 to 36 months was a routine part of that process. Of course, it got faster, because there was an ongoing business and activities to write about, and the earlier plans. Trying to remember that first one… I’m thinking somewhere between 50 and 100 hours work to get the research done and get it written. That was with a good business concept to hand. The last one was about 20 hours work. Writing a new one from scratch, I’d guess around 40-60 hours work.

    Is the chance of $2500 worth it? Your choice I guess…

  2. bluesaphire

    Nov 18th, 2006

    Quick Quick! lets do a PR stunt – we’ve messed up on the copybot thing!

  3. Satchmo Prototype

    Nov 18th, 2006

    I love the high moral ground taken by a publication that constantly makes baseless accusations against The Electric Sheep Company, sometimes complete with editor’s notes reminding the reader what they are reading is a lie. But oh wait this is the respected Uri…

      “And of course one doesn’t have to be Prokofy Neva to worry about the kind of PR advice that Edelman might be giving to the Sheep on the side”

    Congratulations Uri… you’ve just hit Prokofy level of conspiracy theory. Like our other clients, Text100 and GSD&M, Edelman is not our PR company and does not give us “advice on the side”.

    But what’s most disappointing about this article is that you misspelled CSVEN’s name. Have a little respect for one of the great thinkers in this space.

    [you misspelled our name too... but then again you guys don't even attempt to get facts regarding ESC right.]

  4. Urizenus

    Nov 18th, 2006

    Satch, there are a lot of facts in the above article. It’s funny that the only error you can locate is the misspelling of Cvens’s name [sorry Cven, I'll fix it]. I do agree that he’s an SL great thinker, by the way, so at least we are on the same page about that. Oh and in addition to the spelling point you have the old “you guys post articles by Prok” objection. Sorry, but that doesn’t refute a single claim made above either.

  5. Urizenus

    Nov 18th, 2006

    fark, I mean *csven!*

  6. Satchmo Prototype

    Nov 18th, 2006

    I don’t think this is the forum to debate our projects or our clients. This Edelman stuff is old news, everyone go around the blogosphere, dig up all the posts and make your own decisions. I recommend you start here.

  7. Giff / Forseti

    Nov 18th, 2006

    Uri, the Edelman-Walmart thing is old news and I’ll let them address it if they want. I think the me2revolution team is a group of genuine and smart folks, and I do not think it is fair to define them by the walmart debacle.

    Regarding the business plan competition — this is not a new concept, and we tried to keep this one pretty simple. I need to read Csven’s blog carefully to understand where he has good points we can try incorporate. This is an experiment — we would like to turn this into more of an ongoing venture capital fund if it works well but one step at a time.

    Eloise, I don’t expect someone who wasn’t already desiring to do a Second Life business to participate. The best entrepreneurs don’t need someone else to motivate them. A short (and we want short) business plan is actually a really useful exercise for any entrepreneur.

    However, I do think that there are plenty of people out there in Second Life who have cool ideas, but can’t afford to hire that scripter to complete a necessary part, or can’t afford that builder to make it look great. Is this meant to *pay* for someone’s business? No, it is helpful seed capital, advice, publicity, and virtual land to help an SL entrepreneur make their SL goals a reality.

    I find it hard to find the horror in that.

  8. Urizenus

    Nov 18th, 2006

    Satch, it’s not old news. The scandal broke over the last couple months and is still unfolding. We are still waiting to hear if your client is going to be kicked out of WOMMA for unethical behavior. That isn’t old, that is under review right now! And I have to say, while it may be old news to *you*, it certainly wasn’t old news to me until it was brought to my attention by some of the PR firms in SL, and I seriously doubt that it is old news to any of the bloggers in the SL infosphere. If it *was* old news to them then I have to ask why they didn’t note this fact when posting about the contest.

  9. Urizenus

    Nov 18th, 2006

    btw, I understand that the Sheep can’t comment on their client. Hey here’s an idea! Maybe Edelman can pay some people to defend them here.

  10. Amanda Chapel

    Nov 18th, 2006

    This is just Edelman’s modus operandi. They paid off WOMMA; they pretty much bought Micro Persuasion; they threw some cash in front of Technorati to form a “strategic partnership.” Now it’s SL. The only difference I see is that they apparently respected the others.

    - Amanda Chapel
    Managing Editor

    PS It’s Amanda Vale in SL.

  11. Giff / Forseti

    Nov 18th, 2006

    Wow Amanda, that’s a charming post.

    I was the one who came up with the prize amount, for those who are wondering. If you want to whine and blame anyone’s judgement for the prize amount, blame mine.

    In my opinion, for a new Second Life business, a full island for 6 months, L$350,000, and free professional advice/help is NOT chump change. It’s a prudent level from an investors point of view and a useful amount for a new SL business. In SL, startup costs are relatively low — in the past, unless you were trying to move large scale into the land business, costs have primarily been in the form of creativity and time.

    Also: business plan competitions are not VC rounds. Harvard Business School has a competition every year for a $60K prize — and these are businesses which will probably need to raise millions and have huge potential target market. In SL, the total market size is still fairly small, and business models are still being proven out.

    If what you wanted was just to make a big PR splash, yes maybe you should just dump a ton of money on a prize and just write it off. But actually, we wanted to try something real that could be tested and then done in a bigger way.

  12. Sativa Prototype

    Nov 18th, 2006

    In the “For what it’s worth department.”

    I love the Sheep’s work, they have brought many good things to SL.

    Edelman is a PR firm that has a known shady history.

    Does this change the value of the Sheep’s work? No, I still know if the Sheep are behind a project it will be done well. Does it effect my views of the decision makers at the ES, yes, you knowingly bedded down with fakes and frauds and it will cause everyone to have a new view of you, no matter how much he said she said they said bullshite is thrown back and forth.

  13. Hamlet Au

    Nov 18th, 2006

    Uri is depicting Edelman like some kind of sleazy, fly-by-night PR operator, but in fact the company is one of the largest in the business. Among their clients: Microsoft. In fact, Edelman handles all of MS’s game division stuff, Xbox and PC:


    On that score alone (if none other), it’s a smart move to partner with them on an SL project.

  14. Eric Maelstrom

    Nov 18th, 2006

    Hamlet, is it really a “smart move” to partner with a company who has continually demonstrated a lack of ethics? I guess so if money is the most important thing.

  15. bluesapphire

    Nov 18th, 2006

    You’re asking Hamlet about PR ethics, I suppose its a great place to start? Although, when do we consider journalism a form of PR? I thought Hamlet was the PR-bitch for LL, well that was until they ‘asked him to leave’.

    Also, how can we be so blind here? ESC have been rumbled, so they bring in the FIC line backers to apply the pressure.

    Copybot and unethical PR firms, not too mention odd competitions.

    nice going!

  16. Hamlet Au

    Nov 18th, 2006

    > is it really a “smart move” to partner with a company
    > who has continually demonstrated a lack of ethics?

    “Continually” is a highly debateable statement– but in any case, you could direct that same question to Microsoft. Walmart controversy or specific SL project aside, yes, it’s a smart move for ESC to partner with a PR firm that has the most powerful technology company on the planet in its client roster.

  17. Sativa Prototype

    Nov 18th, 2006

    “Walmart controversy or specific SL project aside, yes, it’s a smart move for ESC to partner with a PR firm that has the most powerful technology company on the planet in its client roster.”

    Why is it a smart move to bring real world tactics and shady business practices into a system that does not, has not, and will not need them in the future? Why is it ok for the vast majority of us who view SL as a enjoyable experience to sit back and take it from the select few who have decided that their views and financial projections are what is best for me? Why is it ok to bring the real world now common practice of “mindless” sheep advertising, PR and spin into a system for the benefit of a select few? Why is it ok to use real world tactics to drag people into a world lead by lies only to find that what they found was not what was promised, sorry no refunds but hey thanks for boosting our numbers, 2 mil here we come! Why is it ok to push aside the cries of the people who have been asking for the same basic things for so long so that you can court the investors?

    I could continue this for some time, but I digress

  18. Eric Maelstrom

    Nov 18th, 2006

    I don’t want to put words in your mouth, Hamlet, but it seems what you are saying in summary is “might makes right.” Sorry, I don’t buy it. A lot of things in history have been “smart moves” for the people with deep pockets but a disaster for everyone else.

  19. Prokofy Neva

    Nov 18th, 2006

    Good work, Uri. See how they are? They will talk their way out of any corner.

  20. Fiend Ludwig

    Nov 18th, 2006

    As reported by Uri above, just over one month ago Edelman admitted that it paid its employees to lie about their identity and engage in activities designed to put more money in the pockets of the 17th to 21st most wealthy individuals on the planet (http://www.forbes.com/lists/2006/10/Rank_1.html). That fact makes their involvement with the world’s richest man seem all the more chilling.

    Ethics for sale…ethics for sale…

  21. Cocoanut Koala

    Nov 18th, 2006

    I don’t think I want any “strategic guidance” from Edelman and Electric Sheep Company.

    That seems like more of a penalty than a prize to me.


  22. Hamlet Au

    Nov 19th, 2006

    > I don’t want to put words in your mouth, Hamlet, but it
    > seems what you are saying in summary is “might makes right.”

    Nope, not at all, I have no opinion on what Edelman and ESC are doing in SL. Just trying to bring a fuller picture to a post that begins, “[D]oesn’t anyone know who these guys are?”– because I’d think Edelman’s relationship with Microsoft is pretty important to actually knowing who these guys are. How that influences your opinion of their SL project is up to you, but it’s definitely a point worth factoring in.

  23. Urizenus

    Nov 19th, 2006

    Why on earth should “they work for Microsoft” influence our opnion on this matter? They work for Microsoft therefore they are ethical? Crimey James (‘James’ is what I call Hammie when I’m peeved at him), they have been censured by their own professional organization for their repeated ethical lapses and Joseph Jaffe has speculated that they may well get kicked out.

  24. csven

    Nov 19th, 2006

    I’m a little surprised that everyone is so worked up about Edelman’s ethics. Is this behavior a surprise to anyone here? Do people here believe this is isolated to them? And is the SL community really any better? After all, the reason CopyBot was such a perceived threat wasn’t because of the tool, but because of what the community expected other residents to *do* with the tool.

    And then there’s the whole “we hate RL corporations coming to SL”. Why? They were in SL long before they even *knew* of SL – courtesy of the residents who stole their identities and sold product bearing their trademark and textured using copyrighted images stolen from company websites. Residents defended these identity thieves. And some of the one’s defending their unethical behavior even lied about their reasons for doing what they did.

    I’d say we have a problem with hypocrisy.

    The only real problem I have with this competition is that it’s no different than most every other competition I’ve come across. Not as bad as the international watchmaker who claimed the IP of every submission for their own use (and gave out one prize: $1000 and a job), and not as offensive as the Doctorow-endorsed Neuros competition which targets a well-meaning community, and which set a ridiculously low “bounty” on a very specific set of features intended to raise the value of their product and potentially increase sales. This doesn’t approach either of them.

    I don’t blame ESC any more than I blame Peugeot or any other standardized competition out there. I only think they should have broken the old mold and set a new, more equitable standard. Not just for SL or virtual worlds, but for other competitions.

  25. Urizenus

    Nov 19th, 2006

    >I’m a little surprised that everyone is so worked up about Edelman’s ethics. Is this behavior a surprise to anyone here? Do people here believe this is isolated to them?

    OK, I’ll bite: what other PR firms in SL are currently censured by WOMMA? This “they all do it” defense of Edelman is an insult to all the other corporations and PR firms in the game who haven’t pulled stunts like nontransparent pay-for-post marketing strategies.

    And no, I don’t think anyone here is opposed to corporations in SL. *I* certainly don’t object to their being here; I just get frustrated by their sometimes idiotic behavior (false claims of first, etc). In this particular case I think that people should be informed of the track record of the Sheep’s partner in this contest, and that the SL blogosphere should do better than drop to their knees and start fluffing the minute people announce one of these deals. Edelman comes with baggage, the contest has limitations, and these facts need to be introduced. People can draw their own conclusions about the contest and whether they want to enter under the circumstances. I don’t care if people enter, I just want them to be fully informed when they do.

    Another way to put this: Always look a gift horse in the mouth.

  26. Urizenus

    Nov 19th, 2006

    I don’t deny that there are other corrupt outfits out there paying people for fake blog posts, but I don’t know who they are. My view is that when firms *do* get caught red-handed they need a good jaw-rocking, if only to make it clear that there *is* a penalty if you do this and get caught. Otherwise, why should there be an incentive for people to stop the unethical practice?

  27. csven

    Nov 19th, 2006

    This “they all do it” defense of Edelman is an insult to all the other corporations and PR firms in the game who haven’t pulled stunts like nontransparent pay-for-post marketing strategies.

    I don’t defend anybody, including myself. I’m talking in general. Just because we don’t know about anyone else’s questionable activities doesn’t mean they’re clean. Edelman got caught. Does that mean I think they’re the only ones? No. And I’d be willing to bet neither do you. All I’m doing is recognizing today’s pathetic reality: we should all know that we need to protect our own interests. Not just from the one’s that get caught, but most especially from the ones that seem the most ethical and trustworthy; they’re potentially the most dangerous imo.

    So people should always do their homework. If they don’t, they should expect to be burned. I don’t like it and it’s not nice, but then neither is a community so full of distrust for each other that they have to worry about rampant virtual theft.

    As to the rest of your comment, I believe we’re in agreement.

  28. Hamlet Au

    Nov 19th, 2006

    > In this particular case I think that people should be informed
    > of the track record of the Sheep’s partner in this contest

    That’s only fair, Uri. But by that same standard, isn’t also fair to acknowledge upfront that Edelman is, questionable Walmart imbroglio aside, still one of the largest and most respected PR firms in the world, with Microsoft its leading tech client?

  29. Urizenus

    Nov 19th, 2006

    I think it *is* the largest. Now by ‘respected’ I’m not sure what you mean? Are they respected if they have been censured by WOMMA and may well be kicked out of the organization? That isn’t a judgment that comes some anti-PR activists. That is coming from an organization of PR and marketing agencies.

    Of course if you mean only that *someone* respects them I’m sure that’s true. I’m sure that some people respect them just because they make lots of money and have Microsoft as a client. But then I think I think it’s fair to say that those people and I respect different things.

  30. Urizenus

    Nov 19th, 2006

    What am I saying; they are more like 5th largest.

  31. Sativa Prototype

    Nov 19th, 2006

    So how about we meet in the middle and say,

    “Edelman, the PR firm currently under investigation for its business practices with corporate giant Wal-Mart which resulted in its removal from WOMMA (Word of Mouth Marketing Association) for administrative review is now working with the Electronic Sheep Corporation. Edelman boasts software giant Microsoft as a client and even in their own “Edelman Trust Barometer” show Microsoft as the Most Trusted Global Company. One can only imagine what wonders they will bring to Second Life.”

    How does that sounds, covers all the key points I feel. I was really amazed at the Edelman Trust Barometer, but the Sativa Protoype Trust Barometer just broke.

    Edelman did do an amazing thing with I Love Bee’s, but they were only following a trend, The Beast was the father in terms of large scale ARG’s. This contest in SL makes me wonder more about who actually was behind the idea of ILB, what contest were they in and how many copies of Halo 2 they got as a prize.

    I have nothing against ESC, nor Edelman, one has done some great things for SL, the other will do things to SL, therein I see the catch. I see no value in bringing droves of people into a system that cannot handle it. Who wins in this situation, certainly not us, the embedded players who will watch something we enjoy grind to a halt under the strain. The hype wagon is almost full and its soon to burst, how long can people stand behind something when the something is eating itself?

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