Flogging Sony

There's a bit of outrage emanating across the blogosphere. Apparently, Sony (NYSE:SNE) has been caught in the act of creating a fake blog -- "flog" is the term that is catching on for this sort of thing -- to entice consumers to purchase its PSP devices. The site may have been pulled, but the controversy lives on.

This isn't the first time that something of this nature has happened. Wal-Mart (NYSE:WMT) faced similar controversy this past March, when certain pro-Wal-Mart bloggers didn't disclose that they were being fed information from the retailer's PR firm, Edelman. Apparently no lessons were learned last year, since a similar problem emerged again this past October, when Edelman promoted Wal-Mart with a fake travel blog.

This also isn't the first time that something of this nature has happened at Sony. In August 2005, Sony settled a $1.1 million class action lawsuit related to its 2001 fabrication of a fake film critic heaping praise on its movies A Knight's Tale, The Animal, and Hollow Man.

Many believe traditional marketing is losing its effectiveness, and the way companies advertise is changing dramatically these days. I have absolutely no problem with the idea that companies can use the blogosphere (consider Google's (NASDAQ:GOOG) corporate blog) or sites such as News Corp.'s (NYSE:NWS) MySpace to increase awareness of their products -- as long as they are aboveboard about it. The problem here is transparency.

Basically, according to various sites such as MediaPost and iMedia Connection (TheNew York Times touched upon the news in an article yesterday, too, pointing out that the term "flog" was coined by MediaPost's Tom Siebert), Sony's "flog" purported to be a blog called "alliwantforxmasisapsp.com." The premise was that it was created by a guy who has a PSP as well as a friend who wants a PSP. It was actually created for Sony by Zipatoni, a PR firm that specializes in the type of viral marketing that is popular these days. Once the fact that it was a "flog" was revealed by the site's commenters, Sony admitted the blog was an advertising vehicle, and it has now been removed. (Mediabistro has pointed out that someone has saved the removed page for posterity -- including many outraged comments from Sony haters "spreading the word," not to mention their outrage, about the bogus site.)

An FTC staff opinion has recently said that companies using word-of-mouth marketing need to exercise full disclosure. It's really too bad that they needed to be told things that should be common sense. When I wrote about Wal-Mart's blogging blunder last year, I pointed out that such situations make companies look sneaky and underhanded. Plus, they're playing with fire anyway -- when they are found out, blogosphere outrage is about as good a distribution of bad PR as you can get, speaking of the viral spread of information. As I have said in the past, honesty makes for good ethics and good business, and it seems Sony's attempt to sneak -- and I mean sneak -- into the heads and hearts of its target market truly backfired with this ill-advised campaign.

Further viral Foolishness:

• Wal-Mart's Blogging Blunder
• Fabricated Film Critic Haunts Sony
• Death of a Salesman

Wal-Mart is a Motley Fool Inside Value recommendation. To find out which other companies Philip Durell believes are great bargains, you can take a free 30-day trial.

Alyce Lomax does not own shares of any of the companies mentioned. The Fool has a disclosure policy.