For many corporations and individuals, common sense dictates the practice of astroturfing (see Wikipedia’s definition if you’re unfamiliar) is something to be avoided, since it’s unethical and chances are it will backfire. It’s also against the law thanks to new FTC guidelines.

So if you’re the world’s largest public corporation by revenue, and stockholders, journalists, bloggers and pretty much everyone under the sun is watching what you’re up to, astroturfing is a disaster waiting to happen – especially if you were caught doing something similar back in 2006.

But that didn’t stop Wal-Mart from setting up a fake community group to drum up support in Chicago, where the company is gunning for a second store within city limits.

When the Chicagoist blog received a series of pro-Wal-Mart comments from unknown screen names in response to various posts, blogger Kevin Robinson decided to investigate. He discovered that, with the help of PR firm Serafin & Associates and the Chicagoland Chamber of Commerce, Wal-Mart is behind the phony advocacy group, “Our Community. Our Choice,” which was linked to the blog comments.

Wal-Mart and its associates have every right to plea the corporation’s case to the people of Chicago. And the citizens do, too, if they’re legitimate. But establishing a fake community group that professes to stand for residents and their interests is undoubtedly devious and a tactic no PR firm or brand should use.

I was invited to attend Sidoti & Company’s (Wall Street’s largest independent small-cap equity research boutique) Second Annual Business Services Conference on February 2. Hosted by one of their senior equity analysts, David Gold, the day was filled with presentations on topics ranging from litigation trends to the outlook for commercial real estate.

Among the presenters was Patrick Carroll, Securities & Commodities Fraud Supervisory Special Agent for the Federal Bureau of Investigation’s (FBI) New York office. He gave an inside (as inside as the FBI will go) look into how the agency tackles securities fraud in our nation. The crimes they pursue include corporate fraud, Ponzi schemes, market manipulation, insider trading and wire/mail fraud. He’s currently working on the Madoff case, for example.

Interestingly, he talked several times about the role a company’s brand – and media coverage in particular – plays in preventing or prosecuting fraud. The FBI relies on a number of information sources to uncover new cases. High on Agent Carroll’s list was what he called “open sources.” He noted that journalists were very good at uncovering fraud and that broadcast and print coverage often lead to investigations. He also joked that he watches both Fox News and CNN to ensure unbiased research.

Some of the recent trends the FBI is seeing are tied to the subprime crisis, bail-out schemes and alternative investments, such as hedge funds and private equity. He urged attendees (who were largely analysts and investors) to “scrub down” the source of funds before getting involved even if they’ve done business with the individual or company in the past. He suggested they ask themselves, “Is the risk worth the impact on my brand?” One other area of concern is “con men” that target hedge funds and private equity firms. He said they often get away with their schemes because they assume their victims won’t turn them in to authorities. Most organizations don’t want to admit they bought into a con man’s pitch, let alone see their naiveté played out in the media.

Call it a “scrub-down” or call it due diligence, the message was clear: The impact of an investment to your brand should be considered alongside its financial return.

What happens when one of the world’s biggest – and arguably best – brand marketers loses control?

I recently read a fascinating case of a product launch gone wrong. Or rather, more accurately, not gone at all. Here’s the story:

According to P&G, the new Dry Max diapers represent the most substantial product improvement for Pampers — the consumer packaged goods giant’s biggest global brand — in 25 years. Company executives thought Dry Max would be lauded as the iPod (or should I now say iPad?) of baby care due to its improved performance, thinner profile, and reduced environmental impact, among other attributes. Instead, the diapers got slammed by a group of critics who treated it more like the new Coke.

What happened?

Due to the complexities of roll-out logistics, the company put the new Dry Max diapers into the old diaper packaging in some markets over the summer without alerting customers to the change. This was two months before the Dry Max launch, which was slated to be P&G’s biggest marketing campaign EVER. Consumers in the early markets who felt blindsided by the change reacted strongly – complaining the new version felt stiff, papery and cheaper, and caused more leaks and rash – and they spread the negative word online to markets that had yet to receive the diapers. There were hundreds of posts on both pampersvillage.com and on diapers.com, among other places. As a communications exec and a mother-to-be, I have both a professional and a personal understanding of the sway online consumer opinion can have, especially when it comes to kids’ products. Parents trust other mothers and fathers and make buying decisions accordingly.

Some of the Dry Max critics were incredibly active. For example, one dad posted on 75 sites and wrote more than 50 posts on pampersvillage.com alone. Pampers proceeded to remove the reviews on its site as it switched to new ratings system. Predictably this caused a significant outcry, so they reinstated the posts and P&G is now addressing consumers who’ve complained on an individual basis.

A woman who started a “Bring Back the Old Cruisers” fan page on Facebook said, “We could move on and just buy the Target [Up & Up] diaper [which she said is now better]. But the principle is that they’ve slipped this inferior diaper into the existing packaging without notifying the consumer.” Several consumers who hadn’t even tried the diapers joined the Facebook page because they felt P&G was being deceptive by making the change without announcing it.

The communications and marketing lessons here all come down to a simple truth: It’s a new world. Evangelists can morph into detractors overnight if they’re not properly educated and nurtured. If you don’t actively engage in conversation, the consumer can and will take control and you might not be so happy with the outcome. We’ll never know how the marketplace would have responded to the innovation if P&G had actually educated consumers about the changes and their many benefits before slipping the new product into old packaging.

P&G believes the tone of the discussion will change when it turns on marketing support starting this month, and it very well may, but there’s no question that they’re starting with an unnecessary deficit. article

Yesterday, I attended a Public Relations Society of America (PRSA) seminar titled, “Regulatory Scrutiny of Social Media.” The speakers were attorney Michael Lasky of Davis & Gilbert LLP and Tricia Geoghegan, who oversees several social media initiatives for Johnson & Johnson.

Lasky provided a quick overview of the recently enacted Federal Trade Commission guidelines on testimonials and endorsements. The harsh reality is that marketers (including their agencies) can now be held liable for a blogger’s unsubstantiated or misleading claims. A blogger can be defined as anyone posting information on a social media channel. Geoghegan noted that brands considering their social media strategies should factor in both the marketing opportunity and their responsibility to community. While this is particularly true for a consumer healthcare company, I think all businesses can benefit by thinking in those terms.

Lasky offered tips to the audience to avoid a run-in with the law. Here’s my condensed version:

1. Encourage bloggers to disclose any material connections (including the acceptance of free products!).
2. Monitor blogs to ensure statements about your products/services aren’t misleading.
3. If you’re posting about your own company (or your client’s), be transparent about your connection.
4. “Street team” members and celebrity endorsers should also make their relationship to the marketer clear.
5. Develop written policies and procedures for employees who participate in social media.
6. Add the subject of disclosure to your media training process.
7. Ask yourself if your social media practices are likely to deceive the average consumer.
8. Seek legal counsel on new initiatives (can’t blame the guy for including a plug!).

I am not alone. The end of a year compels many people to reflect on the passage of time and consider or even predict what will happen in the coming 12 months. It goes without saying, but I’ll say it anyway: 2009 presented a number of challenges for our industry as it did elsewhere.

Not only did we face the worst economic crisis in recent history, but journalism — the very profession upon which so much of what we do depends — continued its downward spiral. According to a story earlier this week in the Los Angeles Times, the presses stopped at nearly 150 newspapers this year alone. But, as the cliché goes, challenges are opportunities in disguise. We believe the field of public relations is well positioned in this new era of anyone-can-influence, authentic, two-way, direct-to-customer communication. Those principles have guided those in our profession since its inception.

To that end, we have lots of ideas about what’s coming in 2010. Our three top PR predictions for 2010:

1) Testing, testing: Media executives will stop talking about the downside of making most Web content free and analyzing the few paid subscription models that work (WSJ.com, ConsumerReports.org, et al.), and start testing new business models to see if and how much they can charge. Consumers will begin to face the reality that they either have to pay for content or consume the advertising that supports it. Publishers and advertisers will get smarter about how to reach consumers in a way the target audience won’t immediately reject. When real solutions are explored and not just discussed, we can get to the task of preserving quality journalism.

2) Taming the social media beast: The Wild, Wild West will become less wild as social media sites, professional organizations and corporations create rules and ethical guidelines. Facebook has already developed new, relatively restrictive rules about fan page promotions. The Word of Mouth Marketing Association (WOMMA) plans to publish a new Guide to Social Media Disclosurein early 2010. It reflects new regulations created by the Federal Trade Commission that require any online influencer to reveal if they received sponsorship money or free products from companies about which they write. (Disclosure: We’re card-carrying members of WOMMA.) Expect several more social media blunders (ala Domino’s and Motrin) as all this gets sorted out.

3) Keeping it real: American consumers will continue to live a more grounded existence as a result of the recession. This coupled with the green movement creates the perfect storm for consumer change. Reusing is not only good for the bottom line; it’s better for the environment. Handmade gifts, home-cooked meals and swap meets will remain popular. And brands will work hard to stay relevant in this context while also attempting to preserve their margins. At the beginning of the decade, the casual dining concept took off because people wanted the convenience of eating out without the guilt of fast food. Just this week, Kraft announced it’s introducing a line of restaurant-inspired foods because people now want to create the dining-out experience at home. Stay tuned for more product introductions and marketing campaigns like Kraft’s.

We’d love to hear your predictions. Best wishes for a joyous, prosperous 2010!

Considering a promotion to drive fan traffic on Facebook? Not so fast. Facebook recently updated its promotion guidelines and it’s not as straight-forward as you might think.

Thousands of brands, celebrities, sports teams, musicians and other entities have launched fan pages on Facebook. And Facebook is wisely doing everything it can to monetize fan page traffic (for example, last week it announced advertisers can target friends of their fans) and protect itself against any liabilities from the promotions fan pages are hosting.

Most of the guidelines are intuitive – like you can’t offer prizes to people who are under 18 or require a purchase to enter. Section 3/Administering a Promotion through the Facebook Platform, though, was more than a tad surprising. If you are planning a promotion through Facebook, you must receive written approval from Facebook to do so. And, you must administer the promotion through an application (i.e. not via status updates).

Facebook has been a boon for small and mid-size businesses looking for cost effective ways to engage their customers. I haven’t tried to reach a Facebook representative to get approval for a promotion yet. But something tells me these kinds of restrictions are going to make it difficult for the vast majority of organizations that don’t have endless resources to optimize their presence on Facebook.

Fortunately these rules don’t apply if you’re promoting a contest you’re administering outside of Facebook. When we hosted a Twitter scavenger hunt earlier this week for the Radio City Rockettes, we posted these rules on the company website and only used Facebook status updates to alert fans to the opportunity.

Stay tuned as the rules are likely to change again. In the words of Section 6/Facebook Rights, “We may modify these Promotion Guidelines at any time without notice to you. You will subject to the most current version of these Promotion Guidelines then in effect.”

We recently returned from an expert workshop on the topic of healthy community design that we handled for the Centers for Disease Control and Prevention. Planning started in February and we were responsible for everything from selecting the participants to setting the agenda. The objective of the event was to engage thought leaders from those professions responsible for creating the built environment (developers, architects, planners, etc.) to discuss how we can encourage the consideration of public health factors (walkability, respiratory health, access to healthy foods, etc.) when communities are being designed. In attendance were representatives from the United States Green Building Council, American Institute of Architects, Environmental Protection Agency, National Association of Home Builders, Department of Housing and Urban Development and American Planning Association, among others. We also secured Architectural Record’s Editor in Chief Bob Ivy as our moderator.

The meeting was a success. The dialogue was inspired and dynamic. And our careful planning paid off – in fact, Bob Ivy, who has moderated many similar meetings, said he’d never seen an event more meticulously organized. We’re now working on a report that summarizes the outcomes and planning a media initiative to continue building on the momentum of the meeting.

We held a meeting similar to this one in 2001 – it was a roundtable of Chief Marketing Officers from multinational and international companies (United Airlines, IBM, P&G, et al). We didn’t face any difficulties securing attendees for either meeting. The subject matter and agenda were enough of a draw. What was different this time was how challenging the communication became leading up to this year’s meeting. It seemed two factors were at play: 1) people are so overwhelmed with information that they can only focus on so much at any given time; 2) very few people have assistants these days to help them manage their logistics.

Prior to the meeting, we distributed a handful of emails that included all the event details. We were selective in what we included because we didn’t want to overwhelm our guests. Sure enough, some people would respond by answering only one of our requests (e.g. Please send us your bio; or, Are you a United States citizen?). In the days leading up to the event, people finally started to focus and that’s when the questions started to surface. In droves. Several people failed to see that we had booked ground transportation for them in Atlanta. Others needed the name and address of the hotel. There were also a lot of questions about the three-minute case study they were asked to prepare. I was constantly tethered to my BlackBerry for the final 48 hours leading up to the event.

When the dust settled, I called the agent who handled all of the travel arrangements. She had also booked our 2001 meeting. We agreed that it was much more difficult to communicate with people in advance of the meeting this time around. The degree of overload is only going to increase as we tap into new channels of information with new devices. Maybe next time we should try carrier pigeons.

Recently we were asked to include social media best practices in a proposal. To follow is our list. As Peter Shankman and Sarah Evans wrote on their blog post, very few people can call themselves social media experts. To that end and given the dynamic nature of the practice, any suggested changes, contributions are welcomed!

1. Social networking channels, such as MySpace, Facebook and Twitter, require a degree of authenticity and transparency not always evident in traditional forms of marketing
2. Organizations that create a presence on social media channels must be willing to engage in a two-way dialogue with their target audiences and recognize it’s about human-to-human contact
3. It is critical to determine the role(s) – customer service, informer, reputation management – an organization wants to play before setting up a social media account
4. An organization should only share information via social networks that is easy (and desirable!) for others to share
5. A mix of social media channels can optimize an organization’s ability to participate in social media, as each tends to offer its own unique attribute and/or audience
6. The real-time nature of social media combined with its virtually unregulated content makes it imperative to monitor — and respond where appropriate – on a very frequent basis
7. Organizations should develop and utilize social media guidelines for their employees that outline how individuals characterize their affiliation

As the Federal Trade Commission drafts new rules on bloggers’ disclosure of sponsored content, BlogHer, the community of thousands of influential female bloggers, is in the midst of its fifth annual convention in Chicago.

We attended BlogHer in 2006 on behalf of our client WeightWatchers.com. The debate about the precarious relationship between trusted information sources and marketers with dollars aimed at garnering positive product reviews was percolating then and it’s raging now. (Incidentally, WeightWatchers.com was paying to attend the conference and exhibit, but they weren’t paying bloggers for posts.)

Days before this year’s conference kicked off, Elissa Camahort Page, the community’s co-founder, told AdAge that disclosure alone is insufficient. Her network is advocating that bloggers create a separate section of their blogs for reviews based on freebies, perks or outright compensation.

We’re members of the Word of Mouth Marketing Association and we’ve always been proponents of transparency. Camahort Page’s new proposal’s an interesting one. Ultimately though, which of the many proposals on the table is adopted doesn’t matter as much as continuing the lively dialogue. It’s important that there’s real forward movement on the establishment of best practices and policies – something both bloggers and marketers desperately need – especially since this world is evolving so quickly (next frontier: sponsored tweets).

Publishers, like mommy bloggers, have a right to monetize their work – how else will they survive and thrive? But they also need to retain their credibility and authenticity. We’re hopeful that as the industry moves towards consensus on these issues we’ll strike a satisfactory balance.

Campus CEO book cover

With what may be the biggest political corruption scandal in New Jersey history unfolding, I am likely the only person writing about its gubernatorial race. But yesterday it was big news when Randal Pinkett, entrepreneur and winner of The Apprentice 4, held a press conference to announce that he’s still interested in running as incumbent Jon Corzine’s lieutenant governor – if the governor will have him.

There has been a great deal of media coverage about Mr. Pinkett’s readiness for the role since Governor Corzine announced he was on the short list. Numerous articles, blog posts and editorials have essentially laughed at the notion of a winner of The Apprentice running the state should something happen to the governor. These days, it seems anything associated with Donald Trump generates at minimum a chortle, if not a heavy dose of skepticism. It’s a shame, because we know Randal and his time on The Apprentice is a blip on the continuum of his accolades and accomplishments.

I am not interested in recapping his resume; other pieces have done that. Instead I’d like to shed light on Randal, the person. Rose Communications represented the publisher of Randal’s book, “Campus CEO: The Student Entrepreneur’s Guide to Launching a Multi-Million Dollar Business.” We worked directly with Randal for several months leading up to the launch of the book as well as in the weeks that followed it. He is at once intelligent, charming and approachable. He definitely had a point of view about his book and how it should be introduced. But he was also impressively collaborative, bringing in his own public relations counsel as well as the firm that handled The Apprentice. He is as passionate about helping people as he is about achieving success. Randal was always accessible to us, listened to our perspective and expressed his gratitude for our work.

Of course, I have no say as to whom Governor Corzine selects as his running mate and I’ll do my own due diligence when that choice is made. But what I know now is that Randal is the victim of media outlets that took the easy route by focusing almost singularly on his time on The Apprentice. It was deplorable how they placed the focus on his handling of individual tasks on the show without making mention of all the things he’d achieved before and after that short season on television. Randal seemed to stay out of the fray, which is the smart thing for a potential running mate to do until he’s officially named. But he wisely took control of the message yesterday when he offered his perspective to the media.

Governor Corzine supposedly has until Monday to make his decision. Whether Randal’s time is next week or in the future, I hope voters take the time to get to know him beyond what they or someone they know saw on “reality” television.