COLUMBUS, Ohio (AdAge.com) -- It's ironic that Edelman Worldwide helped to write the Word of Mouth Marketing Association's code of ethics, which states: "Honesty of identity: You never obscure your identity."

Ironic, of course, because the independent firm was publicly slapped -- and publicly apologized -- for being the force behind the Wal-Marting Across America blog that was unmasked as a fake created and paid for by Edelman.

"This was definitely an avoidable mistake," said Paul Rand, who leads the communications committee for WOMMA and is a partner at Ketchum public-relations firm, a division of Omnicom Group. "One of the challenges of being a pioneer is you are the first in line to catch the arrows. The only way companies are going to learn what not to do is by someone else making the mistake first."

'Failing to be transparent'
In a rare mea culpa, principal Richard Edelman apologized publicly for the "error in failing to be transparent about the identity of the two bloggers from the outset. This is 100% our responsibility and our error, not the client's." The bloggers were freelance writer Laura St. Claire and Washington Post photographer Jim Thresher, as first reported in a BusinessWeek story.

The Wal-Mart blog started as a travelogue by "Jim and Laura," who were traveling in an RV across country and stopping each night in a Wal-Mart parking lot, often posting lengthy and positive entries about the retailer following conversations with Wal-Mart employees. The bloggers were later revealed to be Ms. St. Claire and Mr. Thresher.

With many marketing practitioners quaking at the prospect of consumer-generated content, Edelman stood apart as a firm with at least some definitive answers. There were roundtable discussions such as "Why Blogging Can't be Ignored," and a series of articles with titles such as "Public RelationSHIPS: Communications in the Age of Personal Media" were created in partnership with Technorati, a blog buzz-tracking service. Even Mr. Edelman got into the game, writing his own blog, dubbed 6 A.M.

Now, however, Edelman is being aligned with a newly coined word for its present crisis: flog, a play on words to demarcate the fuzzy line between the fake (paid-for) and real posts out there in the unruly blogosphere. In fact, the Wal-Mart/Edelman blog fiasco could end up as the case study on how not to navigate the blogosphere, said Nielsen Buzzmetrics Chief Marketing Officer Pete Blackshaw.

"Everyone wanted to co-opt the conversation," Mr. Blackshaw said. "[The industry] wanted to make it a marketing vehicle and not a listening vehicle. I hope the marketers internalize what this means for best practices."

PR damage
To recover from the PR damage, Mr. Blackshaw said, Edelman must "shape a much clearer definition of transparency." He added: "On the surface, they are contrite, apologetic and embarrassed, as anyone in the PR business is going to be embarrassed by their own PR crisis. The question is: To what extent is this incident going to help them take positive steps toward change?"

Edelman's Steve Rubel, a senior VP who launched the firm's much-lauded Me2Revolution practice and also writes for Advertising Age's Digital, has distanced himself from the Wal-Mart blog, noting: "I had no personal role in this project." Both he and Mr. Edelman also reiterated their support for the WOMMA guidelines on transparency.

The site walmartingacrossamerica.com has been purged of earlier blog entries by Ms. St. Claire and Mr. Thresher, and is now essentially closed, but for a lengthy "final word" from Ms. St. Claire, which at one point notes: "Thanks to an organized Wal-Mart opposition group, the whole world now knows who Jim and I are. ... We didn't disclose all that stuff in the beginning, of course, for a couple of reasons. We kept our last names and personal lives out of it because of concerns about our privacy."

Despite the contrite apology from Mr. Edelman, the criticism continues to fly in the blogosphere, with many picking apart the apology as well. "And so, what, we're supposed to say, 'Okay, Richard, all is good in Edelman-land again?' If you were newbies just getting your proverbial feet wet in the blogosphere, that'd be one thing, but for your agency, one that prides itself on being plugged in to the Web 2.0/social-media world, to have made this sort of crass mistake is a bit shocking," wrote blogger and author Steve Taylor. His was one of many comments in a lengthy thread responding to Mr. Edelman's apology, posted Monday.

Engaged in the conversation
Notably, Mr. Edelman has actively engaged in the conversation and expanded on his apology numerous times in additional posts throughout the week. It's clear from these responses he still hopes to tie his firm's reputation to its leadership on the social-media front.

"I hope Edelman uses this case to become a stronger company and a better leader for social media," one poster said, to which Mr. Edelman responded: "We will try like heck to make that happen."

In another post, Mr. Edelman gave a laundry list of actions he is taking, including sending the "Me2Revolution gang ... on the road to all of our office[s] to explain our standard for transparency. We are making this a core part of Edelman University. We are going to have a central clearinghouse for social-media programs. We will walk the talk!"

Despite harsh responses from bloggers, some of whom called for Mr. Edelman to resign and for WOMMA to expel the firm as a member, many have leapt to Edelman's defense, including WOMMA itself.

Global training program
"[Edelman] has committed itself to a global training program to ensure that all of its employees and subcontractors fully adhere to the WOMMA Ethics Code, and to establishing mechanisms to assure compliance. ... We are assured by Edelman management's public actions to accept full responsibility [and] pledge to make certain that the error will not be repeated," read a statement on the organization's website.

When asked why WOMMA did not take any action against Edelman, the organization's CEO, Andy Sernovitz, said: "We aren't the police. Associations don't punish. And look, PRSA didn't even say a word, and they are the PR association." He added: "We are all in uncharted waters. Mistakes will be made. The complexity of all this social media is that it doesn't have the controls of traditional marketing."

In explaining how such a mistake could happen, Mr. Rand of Ketchum noted that in recent interviews with candidates for Ketchum's new media public-relations practice, many "are boastful about how they go into blogs and post anonymously and have great success. These are thoughtful, smart people, but they thought this was OK."