RSC Partners, Inc.

Eitaro Itoyama is a blogger. He also happens to be a billionaire who owns a 4% stake in Japan Airlines. This proved to be a lethal combination for senior JAL management, especially for soon-to-be-former JAL President Toshiuki Shinmachi.

Last month, Itoyama launched a series of scathing attacks against JAL management for its failiure to reverse hundreds of millions of dollars in annual losses, and he specifcally called for Shinmachi’s ouster.

The media picked up the scent and the story spread like wildfire. As a result, Shinmachi will relinquish his duties as President in June and assume the largely ceremonial position of Chairman.

Writing in Forbes, Tim Kelly notes:

“His succesor, Haruka Nishimatsu, who will take over in June if shareholders approve, better beware, because the blogger is on a roll. In a posting, Itoyama referred to the new president as “Nishimatsu Who?” and called on him to reinstate dividend payments.”

Skeptics will argue that given Itoyama’s 4% stake in Japan’s largest airline, he probably could have achieved his objective by simply calling a press conference. But as Forbes’s Mr. Harris points out, Carl Ichan called more than his fair share of press conferences in his recent bid to shake up Time Warner and got nowhere.

Blogs are a powerful new tool in shareholder activism because they give a constant, unfiltered voice to dissident shareholders who wish to critique, complain and to advance an alternative agenda. Corporate executives ignore them a their peril.

Memo to Icahn: Try a Blog [Forbes]

Yes, it’s true. As Kevin Roderick writes on his blog, L.A. Observed–perhaps the most influential media website in Southern California–Ryan and I are Republicans, and we’re working for a Democrat (gasp!).

Although some people might find the very thought to be offensive, to us it is really quite simple–what makes a blog a good blog is the same regardless of whether you’re Republican or Democrat, or writing about entertainment, sports, politics or your cat.

Barry Gordon has his weblog, Barry Talk, to go along with his radio show on a Southern California Air America outlet. He wanted to know if and how he could leverage the power of the Internet to grow his audience both for the radio show and the weblog.

The idea isn’t so far in left field. In fact, it’s because of his embrace of bloggers that Hugh Hewitt became a household name among bloggers.

So, among the many things we’re doing for Barry is helping him make Barry Talk a better blog–from content to presentation to being “linky” and becoming “sticky.” The basic theory is that in blogging Link = Traffic = Happy.

The same rules apply whatever letter you have after your name, and at RSC Partners, we’re working with our clients and successful bloggers to make a formula that works.

Painful as it may be for many to admit, Wal-Mart “gets it”.

Michael Barbaro writes in today’s New York Times that the planet’s largest retailer is conducting an aggressive public relations campaign that focuses exclusively on the blogosphere:

“Under assault as never before, Wal-Mart is increasingly looking beyond the mainstream media and working directly with bloggers, feeding them exclusive nuggets of news, suggesting topics for postings and even inviting them to visit its corporate headquarters.”

To Wal-Mart’s credit, the company has embraced two unimpeachable truths: (1) Bloggers are journalists with reach, credibility, and influence; and (2) The blogosphere is so vast that there are many bloggers out there who agree with the company’s point of view.

BLOGGERS ARE JOURNALISTS

Unbelievably, the majority of companies and many in the mainstream media, still dismiss bloggers as fringe players in today’s media hierarchy. This is a grave miscalculation that creates enormous opportunities for those in the enlightened minority, like Wal-Mart.

Because most bloggers lack the resources of a large news organization, they are typically receptive to tips, story ideas, and access to newsmakers (just don’t “spin,” “spam,” or pander to them because bloggers have the best BS detectors in the business).

In Wal-Mart’s case, the company simply offered legitimate, credible ideas for content to appropriate bloggers who cover specific issues. That the New York Times finds this unseemly belies a certain anxiety about the blogosphere at the “Old Gray Lady” that is not only justified, but in our opinion, long overdue.

IDENTIFY YOUR ALLIES

The folks in Bentonville, AR and their PR firm deserve credit for accepting that the company would never get a fair shake in the mainstream media which, for the most part, views private enterprise with suspicion and, often, with outright contempt.

They were smart enough to realize that, in a universe of 18 million blogs, there were bound to be lots of online journalists who see things their way.

We would advise other companies to take notice. Regardless of your issue, you most likely have an ally in the blogosphere. Reach out to them as you would to any journalist.

The New York Times tries to paint the practice of pitching stories to bloggers as somehow “ethically questionable”:

“But the strategy raises questions about what bloggers, who pride themselves on independence, should disclose to readers.”

We think this argument falls utterly flat. Pitching a story to a blogger is no different than pitching a story to a print reporter. In fact, the only way a blog-focused PR campaign differs from a traditional one, is that it is often more efficient and effective.

In our opinion, Wal-Mart’s efforts could and should become the template for future public relations campaigns.

Wal-Mart Enlists Bloggers In PR Campaign [New York Times]

More on Bloggers And PR [Instapundit]

New York Times Piece Is Up [Iowa Voice]

More on Wal-Mart, Bloggers and the New York Times [Marquette Warrior]

The New York Times, Wal-Mart & Me [PunditGuy]

As Seen In The New York Times [Crazy Politico's Rantings]

The New York Times writes a highly critical but silly piece today on bloggers who have taken information from WalMart’s PR agency and posted the information on their sites.

Under assault as never before, Wal-Mart is increasingly looking beyond the mainstream media and working directly with bloggers, feeding them exclusive nuggets of news, suggesting topics for postings and even inviting them to visit its corporate headquarters.

But the strategy raises questions about what bloggers, who pride themselves on independence, should disclose to readers. Wal-Mart, the nation’s largest private employer, has been forthright with bloggers about the origins of its communications, and the company and its public relations firm, Edelman, say they do not compensate the bloggers.

But some bloggers have posted information from Wal-Mart, at times word for word, without revealing where it came from.

Glenn Reynolds, the founder of Instapundit.com, one of the oldest blogs on the Web, said that even in the blogosphere, which is renowned for its lack of rules, a basic tenet applies: “If I reprint something, I say where it came from. A blog is about your voice, it seems to me, not somebody else’s.”

At the heart of the story is criticism of IowaVoice blogger Brian Pickrell. Apparently he had cut-and-pasted copy from an email sent by P.R. firm about WalMart. I understand why as an ethical consideration, plagiarism is bad. As a blogger, if I am quoting someone else, you’ll see it in “blockquotes” even if it comes from an email they sent. Yet, as someone who has sent out press releases for years, I have seen smaller newspapers and magazines (with circulation similar to a medium-sized blog readership) reprint press releases word-for-word and call them articles. Does that make the cut-and-paste practice excusable? No. But I have to wonder when the New York Times will run a front page story on the local fish-wrapper!

Likewise, the Times makes itself look silly by implying that bloggers ought to be revealing the origin of their information—such as who sent them the sources or story ideas they link to. Hogwash. When was the last time you read the Times or any mainstream paper tell you that they were contacted by the MWW Group, Fleishmann Hillard or Hill and Knowlton?

To cast aspersions on the blogosphere or mainstream media as a whole because of these cases would be a mistake.

As blogs get taken more seriously, businesses, politicians and others will start taking notice. As they do, there will be a new market for public relations firms to facilitate the conversation between them. At RSC Partners, we believe that time has come.

Now brand managers and marketing executives are jumping on the New Media bandwagon.  According to the Washington Post:

For companies like ConAgra, the individual opinions blasted out in cyberspace are becoming an increasingly powerful force. Together, they form the fabric of online word of mouth that can determine the hottest new product, make or break a TV show, or set off a customer revolt. Eager to tap into the buzz, a growing number of companies are turning to sophisticated new technologies that track what’s said on Internet social networks, blogs, message boards, product review sites, “listservs” — wherever people congregate publicly online.

For years, companies have spent ridiculous amounts of money on opinion research like polls and focus groups.  Now, everything they need to spot a consumer trend, gain feedback on a product, or evaluate market opportunities is just a few clicks away.

At RSC Partners, we encourage our clients to embrace this “reactive” component of the New Media as a complement to their efforts to promote, publicize and advocate through blogs and other online media.  

One of the first things we did after opening the doors was to design a comprehensive online monitoring program that can track what is being said in the blogosphere about our clients and their issues and products.  (Just as importantly, we can also track what people are saying about their competitors and their products.)

The Post article notes that all of the blog chatter before and during the Olympics could have– and should have–tipped off NBC to its impending ratings disaster in time for the network to make key changes to its programming:

Even NBC’s weak Olympics ratings were partly foreshadowed by chatter in the blogosphere. A sweep of postings shows that conversations about the Olympics peaked around the time of the opening ceremonies then fell off precipitously to just above the low hum weeks before the Games began, according to an analysis prepared for The Washington Post by BuzzMetrics. The survey, which measured the quantity — not the tone of the statements — also found that bloggers posted their thoughts about the hugely popular Fox TV show “American Idol” with just about as much frequency as they did about the Olympics.  Sifting through the economic carnage after the Winter Olympics, this is no doubt a painful and expensive lesson for executives at NBC, but it is one they won’t soon forget.

Blog Buzz Helps Companies Catch Trends In The Making [Washington Post]

Writing in the March 6, 2006 issue of Fortune, Devin Leonard argues that the pending sale of Knight Ridder, the fourth largest newspaper company in the U.S., will be the clearest indication yet of just how much ground newspapers have lost to New Media.

Leonard notes:

“Circulation continues to erode as readers turn to the Internet to keep up with current events. Craigslist is siphoning away help-wanted classifieds. Analysts fear that classified real estate and automobile ads may follow.”

The best estimate is that Knight Ridder will be sold at a 10x EBITDA (operating cash flow) multiple, which is significantly lower than the 13x multiple Pullitzer, Inc. (publisher of the St. Louis Post Dispatch) fetched just last year.

Perhaps the most revealing observation comes from William Dean Singleton, CEO of the privately held Media News Group (publisher of, among other papers, the Los Angeles Daily News) which is the odds-on favorite to buy Knight Ridder:

“We think we can hold on to the print business for some time, but we are hoping that by 2012 we will get 50% of our EBITDA on the Internet.”

It’s clear that newspaper CEO’s and Wall Street Analysts are starting to come around to inescapable reality that New Media is no longer the “wave of the future”– it’s here, in a big way.

What Price Knight Ridder? [Fortune]

In a lengthy cover story in the February 20, 2006 issue of New York magazine, Clive Thompson looks at blogging almost exclusively through a business prism and we think that is a mistake.

His fundamental premise is that the blogosphere is an oligarchy, with serious barriers to entry. He argues that large “corporate” blogs with huge financial backers are destroying the grass-roots nature of the blogosphere, and he denigrates the influence and credibility of what he calls “C list” blogs.

Thompson muses:

“Yet the rapid rise of the Huffington Post represents a sort of death knell for the traditional blogger…”

He asks the rhetorical question:

“Will professionalization turn blogging into media-as-usual? Or will the idiosyncratic voice of the lone blogger prevail?”

Our point is simple: while we find nothing inherently objectionable about “blogging as a business,” we think there will always be room for the “idiosyncratic voice of the lone blogger.”

Sure, only a handful of sites generate big bucks and command the stratospheric traffic of a boing boing or daily kos (and they actually raise the profile of smaller blogs by linking to them occasionally), but those are not the only criteria by which a blog should be judged.

At the end of the day, all bloggers want more traffic, but one must not forget that, for the most part, bloggers blog because they are passionate about a given topic, and often, a blog’s quality trumps its quantity (traffic).

Two sites that can make or break an issue here in Los Angeles– LA Observed and Mayor Sam– have only a fraction of the traffic of Gawker, for example, but they can shape public opinion in ways Gawker could never imagine.

The blogosphere is the voice of the grassroots, and it is a voice that is growing louder every day. The “corporate” blogs so admired by Thompson will continue to sell their ads, make their money, and they could ultimately morph into the same kind of media gatekeeper the blogosphere was created to circumvent.

But “C list” blogs so readily dismissed by Thompson, will continue to empower the grass roots and they will continue to offer news makers a direct channel to news consumers.

Blogs To Riches [New York Magazine]

Writing in The Wall Street Journal earlier this month, Rebecca Buckman noted how a Spanish Internet start-up, Fon Technology SL, broke the news about new funding it secured from Google and Skype in the blogosphere, rather than in the traditional business press. Buckman’s piece highlights the growing influence blogs have in the high-tech sector, creating buzz and driving stock prices.

The avalanche of blogging about FON, much of it from people now tied to the four-month-old company, highlights the rising influence of blogs in shaping opinions about tech start-ups, particularly in Silicon Valley.

Although Buckman’s primary concern was about the disclosure obligations of bloggers, the point she makes most effectively is the power of the Internet in supplementing traditional media campaigns.

Blog Buzz on High-Tech Start-Ups Causes Some Static [WSJ]

We have done a lot of work on legislative, regulatory and community issues, but perhaps the best example of the power of the blogosphere in a public affairs campaign involves a California company that hired us when it saw its primary rival try to poach a large number of its customers with a controversial new development.

Company managers needed a way to give a voice to local community opposition to the project. Working with a local resident who was passionately opposed to the project, we helped her create a Weblog that chronicled her activism in the community.

The activist, “Pat,” blogged about her experiences attending City Council meetings and speaking to her neighbors. Whenever she wrote a letter to an elected official, she’d post it online with a promise to post the elected official’s response (or to remind her readers when the electeds didn’t respond).

Pat also created an online peition and posted news stories and letters to the editor. Pretty soon, City Councilmen and County Supervisors starting turning up some interesting results when they Googled themselves– they found Pat’s site, and knew they had to respond.

One public official took note of Pat’s blog traffic and sprang into action, threatening a lawsuit to block the proposed development. Shortly thereafter, the proposal was withdrawn and we had a very happy client.

The moral of this story: In any public affairs campaign, blogs can be the most cost-efficient, effective way to organize and amplify grassroots causes into an effective voice for political action.

When we first came up with the idea for “RSC Partners,” we asked ourselves the very simple question, “What is this company all about?” Our mission is pretty simple and straightfoward: “To develp New Media solutions to support strategic communications objectives.”

We’re not PR flacks, but we do see value in public relations. Our role is as a complement to– not a replacement for– a traditional PR campaign.

In order to accomlish our mission, we think we need to do two things well:

1. Serve as a bridge between newsmakers– companies, high-profile individuals, etc.– and the people who are passionate enough to challenge the status quo and write about the news on their own initiative.

2. Fill the gap that is left by PR firms that have just awakened to the fact that there is this thing called “the Internet” out there and that have no idea how to respond other than to print a glossy brochure and claim expertise in this area. (To be fair, not all PR firms fit this description, but a frighteningly large number do!)

But we’re not trying to compete with the PR industry. On the contrary, we want to work with PR pros who are just beginning to recognize the power of blogs as a communcations medium.

We understand that using traditional PR tools like spamming press releases and “smiling and dialing” journalists is a recipe for disaster in the blogosphere. Rather our approach is to tailor and target outreach to appropriate bloggers to help them create original content and increase their traffic, while simultaneously helping newsmakers who want to take blogs seriously and to communicate through this valuable new medium.