Silicon Hutong

Advertising 2009: The Flight to Value

In the Hutong

Dreaming of a White Chanukah

1554 hrs.

The advertising business is no less worried about 2009 than any other industry, and the malaise pouring out of Madison Avenue has found its way to Beijing and Shanghai. I think the gloomy prognostications of "blood on the walls" and an industry that craters rather than dips are all a bit overdone.

The other meme that has found its way into the minds of the industry here in China is that the economic downturn will compel advertising agencies, clients, and media buyers to become more disciplined about where the ad spend goes, looking for greater returns on the advertising dollar invested than before. Many think this will mean a shift to digital.

Ian McGuinn, who heads up sector research at JLM Pacific Epoch, notes that Matt Roberts at About.com China agrees. Matt believes that 2009 will not see a flight to digital per se, but a flight to value across all media.

I agree with Matt, and not just because (full disclosure) he's a client. It starts with the fact that different clients in China understand value in significantly different ways. I explain why in a post here.

Speak, Baidu, Speak.

High School Library, ISB

Misspending my virtual youth

0928 hrs.

Lonnie Hodge, who I would fairly say is something of a fan of Baidu, takes the search company's CEO Robin Li to task over his failure to show up to do his keynote at last month's ad:tech confab in Shanghai, ostensibly for a "sore throat." Most of the attendees to whom I spoke shared varying degrees of pique that Li didn't show up, and Hodge in particular sees this as emblematic of Baidu's disdain for Cluetrain-style engagement:

Baidu, or any company, would do well to join the party (not that one...) and join in on the many conversations, those that honor AND those that harangue, which can only make us better business people, more responsible netizens, and decent global citizens.

The Credibility Problem

Baidu has had its share of problems of late, extending from allegations about driving traffic through - and cashing in on - illegal music downloads to growing questions about the validity of its organic search results (given Baidu's apparent willingness to hawk those results to the highest bidder.)

These problems are not purely academic or legal. There is a small but growing negative buzz about Baidu among Chinese users and in the local media, some of it focusing on non-issues, but a growing amount questioning the value of a search engine that compromises its organic search results by prioritizing paid listings.

The Search Problem

That's not going to help things with advertisers. I am starting to hear from companies who have until now devoted their search advertising budgets to Baidu that Google has made huge strides in its search algorithms, and that search ad results on Google were improving quickly. One advertiser I spoke to said that at the end of 2007 Baidu had 100% of their search ad budget. They now have 90%, and that will drop precipitously in 2009.

None of that would be too worrisome if we could believe that Baidu was totally focused on improving its core product. Unfortunately, Baidu has chosen this moment to focus time, attention, and resources on becoming a diversified online conglomerate, venturing into e-commerce, e-payments, and other resource-intensive business in an effort to keep users on its site once they land there.

Leave aside the fact that they are creating enemies where they could be creating partners - or friendly acquisition targets. To diversify into businesses that are so far from your core, that are less brand extensions than leaps into completely new industries, all when you are facing fundamental issues running your core business looks less like wisdom than hubris.

(Unless, of course, this is the first phase of an effort for Baidu to abandon search over the long term. Hmm.

But we digress.)

Unless Baidu can demonstrate to advertisers that it is improving its search product faster that Google is, that it continues to deliver better and more meaningful search results, and that the company can do all of this while pursuing credible efforts in online TV, e-commerce, and whatever else it wants to do, the advertising cash from the big spenders is going to start to leak away.

The Communication Problem

What this all comes down to is a failure to communicate.

Whether comfortable admitting it or not, Baidu has always been seen as "Google with Chinese Characteristics." What Baidu needs to recognize is that China's characteristics - and specifically her Internet users - are evolving.

More of the nation's online populace is turning to online search as a pathway to seek truth from facts, not find stealth ads from snake-oil salesmen hidden among - or above - genuinely helpful information. Wall Street may be pushing for monetization, but the demand from Chinese consumers is for credibility, trust, and results they can believe in. Sincere testaments of devotion to such ideals and a few sackings are a good start, but it will not be enough: Baidu has to do more to balance the disparate demands of investors, advertisers, and users.

The history of the Internet is littered with the corpses of great search engines that were popular, then failed, and with dominant players that were challenged by Google and then imploded.

Baidu has had a dominant position in China, but to this observer it is starting to look like all Baidu has is its dominant position. It does not appear credible, it does not appear focused, and it does not look like a particularly good partner for for other online companies and a partner of declining value for advertisers.

Yet I give Baidu the benefit of the doubt. I assume it is a good company, just slightly unguided. As such, they need to prove they are on track.

• They need to engage with advertisers and their agencies at every opportunity, both collectively and individually.

• They need to focus on search, and if they want to get into e-commerce, for heaven's sakes go out and buy something, don't try to build it.

• And finally, they need to remember that consumer loyalty in China is ephemeral, and that if they do not engage, their user base can evaporate as quickly as it was built.

I have to believe that this is what their PR agency is telling them. But I also suspect that the lawyers are saying something else.

The lawyers are wrong. This is one of those times when silence is not golden, it is poison.

UPDATE: Check Paul Denlinger's excellent post on the matter at China Vortex. Paul looks at the BIDU's problems from an ad sales perspective. Not pretty.

Tremble, you giants from Above-The-Line.

In the Hutong

Sneaking looks at CNBC

2148 hrs.

Sam Flemming at See-I-See hosts an Alex Geertz post on the New Media panel at the Fifth Economist China Branding Roundtable, the annual marketing confab held this year in Beijing.

Before we get going, a side note. The question posed to the panel and that served as the session's title, "New Media: Can Brands Afford to Stay Out?" was, to me at least, so painfully obvious as to be rhetorical. Are there actually companies and communications craftspeople in China who do not see new media making up at least part of their marketing mix?

No surprise, the panel was unanimous in the affirmative, the sole qualification being that you need to do it well. I don't blame the panelists for this, just the organizers, who could have come up with a more imaginative question/title like "How much of your mix should be new media?" or "How do you do new media well?" or "New Media: Shouldn't we just stop buying television time altogether?"

But we digress.

The panel included Vinay Dixit from McKinsey presenting their recent research that suggests word-of-mouth and Internet word-of-mouth are the two most credible communications media in China. Granting that for a lot of us these conclusions are old news, it is always nice to have them confirmed by McKinsey, or Bain, Accenture, or Boston Consulting Group.

What make both Vinay and Sam credible is that they stopped short of making specific recommendations on how to go about engaging in word-of-mouth marketing. Strategies, tactics, and the campaigns that link the two have to be company- and situation-specific. As is the case with most below-the-line communications channels, the further you get away from set formulas, the more successful you're likely to be.

Somewhat less credible - at least as far as I can read into the post - is Dan Wong from Nokia explaining how the company has acquired the tools to adapt to social media, and suggesting how Nokia's move into software is somehow an adaptation. Those are all good starts.

But Nokia is a long way from figuring out how to elegantly integrate mobile handsets with social media - one reason that Apple, Garmin, Google, Samsung, and Motorola all see social media integration as an opportunity. In fact, it is one of several areas (along with entertainment, location-based services, and Nokia's belief that it is the handheld computer business) where Nokia is more vulnerable than it wants to let on - or even knows.

Hint to Nokians: integration is not about buying everything you see. It's about creating an experience that lets us integrate what we want the way we want it into our phones, whether you own it or not.

Free Books of the Week: Core marketing texts

In the Hutong

Counting Books

1606 hrs.

If you have an historic point-of-view on your chosen occupation or profession, chances are pretty good that you can point to one book - or several books - that laid out the need for and underlying assumptions of your craft.

For the marketing and communications professions, two of these texts are available for your perusal at no charge. Both were written during a period in which the behavioral sciences - including psychoanalytic theory - were just beginning to have an influence on the way companies communicated.

The first is Propaganda, the most important work of Edward L. Bernays, a man usually grouped with Harold Burson as one of the creators of the public relations craft. Bernays, a nephew of psychoanalysis pioneer Sigmund Freud, did much to incorporate his uncle's theories into a means of influencing public opinion. Bernays was unabashed in his advocacy of the manipulation of publication as a means of governing in a democracy.

Before his ideas could get much public airing, however, they were adopted in significant part by the National Socialists in Germany, and as a result the word "propaganda" leaves a sour taste on the Western tongue.

Bernays' ideas remain provocative, however, and they are worth a review in a day when the marketing craft seems to be going more quantitative and less human.

The other book on the Hutong Free Shelf this week is Claude C. Hopkins' book Scientific Advertising. As wary as I am of overly-quantitative approaches to what is fundamentally a qualitative craft, Hopkins reminds us that we cannot leave it all up to our guts. Hopkins' work was fundamental in the formation of some of the giants of the advertising business, including David Ogilvy.

If you work in or with the marketing side of your business, these two short books should be on your reading pile.

Seinfeld Won't Travel. Pity, that.

Starbucks Guomao 1

Coffee shakes are not ice-cream drinks

1134 hrs.

In all of the attention given to Microsoft's selection of an aging comedian to be its voice to a wider computer and software market whose tastes skew quite young, very little attention is given to a larger question:

Even if Jerry Seinfeld retains relevance and power within the United States, how is this $300 million campaign going to help the company outside of the English-speaking world, in places like China, Brazil, India, and Russia that will decide the future of the company? As Wilson Ng at SunStar Cebu points out, there are more Windows users in the world than there are English speakers.

The Global Windows Appeal

Jerry is a nice guy, after all, but he is not exactly a global icon. Microsoft needs help around the world with the challenges it faces, and that goes beyond dealing with Apple. Granting for the sake of argument that Microsoft will succeed to an extent with its Seinfeld effort in the U.S., the company needs a global consumer campaign designed to win back (or just "win") the support of consumers around the world. And the company cannot wait for the next version of either Windows or the XBoX to do it.

Naturally, the focus of the campaign will be different, because of the severity of threats Microsoft faces worldwide, and especially here in China:

• Piracy, or the sale and use of unlicensed or under-licensed copies of Windows. (By under-licensed, I mean the retail re-sale of software meant to be sold only with a new computer, so-called OEM packages);

• Free and Open Source Software (FOSS) (i.e., Linux, Firefox, etc.), and

• Localized policy efforts fighting the Microsoft monopoly and what is perceived as monopolistic-rent type costs for necessary upgrades.

In China, Microsoft has focused most of its efforts to date on working with its OEM partners (i.e, computer manufacturers) to get them to purchase genuine OEM packages to install on the computers they sell, and on large organizations to end workplace piracy in massive enterprises and government organizations. They've made appreciable progress there, a testament (in my opinion) to the locally-savvy efforts orchestrated by Microsoft China's Genuine Software czar David Ben Kay and a highly supportive Tim Chen - both of whom have now left Microsoft to pursue other passions.

The Coming Global Consumer Campaign

The efforts David and Tim started will continue, but the gaping hole in Microsoft's efforts remains with the consumer. But I suspect this is about to end, and the corporate support for the Seinfeld campaign is going to give Microsoft's marketers around the world the chance to tackle a long-overdue consumer campaign. I'd bet we see something not long after the New Year, possibly even in time for Chinese New Year holiday season.

The cost will not be insignificant. A back-of-the-paper-napkin guesstimate would put the cost of a global Microsoft feel-good campaign at between three and five times the planned spend on the Seinfeld campaign, with probably 20% of that going to greater China. Microsoft has the cash, so the cost really is not the problem.

The problem is connection. If Microsoft turns the Seinfeld campaign into a win, it will be because the company's decision-makers - the guys with their finger on the budget button - have a superior grasp of consumer marketing and retain something of a psychic connection to the people who use Windows in the U.S. and the other anglophone markets where Jerry might have an impact.

Whether Microsoft has or can build that psychic connection in China and markets around the world, and whether the executives in each of Microsoft's respective "subs" possess strong consumer marketing skills will determine whether such a campaign has a shot at success.

The Seinfeld campaign is a signal. Whatever needs to happen at Microsoft to get the software development machine back on track will only be the beginning of what they need to accomplish. The other part is turning Microsoft into a genuine consumer marketing organization.

Because the global standard in the technology and innovative industries now lies at the nexus of superior products and powerful communications.

Twitter Branding?

In the Hutong

They shoot artists, don't they?

1614 hrs.

You can understand why many people in the corporate communications gig are still coming to grips with what many people call "Web 2.0," that collective set of online applications that depend on you, me, and other users to create the content. (I prefer calling it "people-generated media," but one buzzphrase is as good as another.) This is, after all, confusing stuff for a marketing craft formed in the comfy crucible of television, radio, newspapers, and magazines.

Sarah Milstein makes a good start in The New York Times, giving some good ideas about how Twitter can be used imaginatively in business. She explains some basics that apply to everyone (share ideas, share knowledge, and show respect), gives several that are imaginative (let executivess and employees Twitter as employees to make the company look with it, run contests, solicit feedback, respond to complaints, advise on status, thank customers.)

My biggest complaint about Sarah's approach is the Screwdriver-Nail Conundrum. Just because you CAN do something with Twitter doesn't mean that it is always the best tool to use (a truism that applies to any communications or marketing tool.)

Experience (and Sarah's article) suggest that there is no set formula for what Web 2.0 tools you should use in business, or how you should use them. Such decisions are not formulaic - they have more to do with your company, its business, its people, and the individuals and entities you need to interact with than the tools itself.

The best advice I can give to anyone about using Twitter (or blogs, or Facebook, or whatever) in your business is to actually go and try it out for yourself. Play with it for a while, get to know it, and then if you need go find somebody to help you figure out if and how it makes sense to use it in your business.

This is especially true when you wander beyond the the U.S. and Canada. Very few new media agencies or advisors in North America come packaged with regional experience or focus (Christine Lu is one of the very few.) The way to use these tools in China requires a more nuanced approach than in the U.S.

In the meantime, Joel Postman over at Socialized (which Sarah links) suggests some basic but excellent and principles-based best practices for using Twitter, but he keeps them basic and principles-based.

Olympics: What was it like on the Green?

In the Hutong

Watching the press-laden planes climb into the sky

2102 hrs.

Okay, last Olympic post.

Media Asia did a fun behind-the-scenes review of how the various sponsor pavilions on the Olympic Green came across.

A hint to sponsors for Vancouver and London: think experience, something that will really knock people's socks off. Media correspondent Dominic Fitzsimmons found some expected winners (Coca Cola) and some surprises (Johnson & Johnson, GE) among the winners.

Olympics: Li Ning's Spanish Inquisition

In the Hutong

The kid's last day of summer

2005 hrs.

Racism is always a sensitive topic, especially when it rears its head at the Olympics, and the people who appear to be delivering derisive commentary about another race live in a country with a controversial past.

The Spanish basketball team's taste-free caricature of Chinese faces was an excellent example of how political correctness has yet to reach some quarters of the world.

My post on the topic - and what I think team sponsor Li-Ning ought to do about it as a Chinese company - garnered some interesting responses. Some people were totally offended, and one guy accused me of being unable to appreciate how offensive it was because I'm not Asian.

What the team did - and what their other, Spanish sponsor condoned - was stupid, infantile, and reprehensible. The question of how to react to it as a business is another matter, however.

Check the post out here.

Olympics: Let the Ambush Games Begin

In the Hutong

Trying to grow some thicker skin

1900 hrs.

My article on ambush marketing at the Olympics in AdAge.

When I first started covering marketing around the Beijing Olympics, I began with the belief that ambush marketing was a bad thing.

Now I'm not so sure.

The more I think about it, the more I feel that effective ambush marketing means a sponsor someplace is not doing a complete job.

Sponsorships buy you an opportunity, not an entitlement.

Ex Post Mortem Olympicus

Pacific Century Starbucks, Beijing

Nursing my share of the collective Olympian hangover

1331 hrs.

Had a good talk with Chistine Liu on The China Business Show last week, talking about Olympic sponsorships, the prospects of Phelpsomania in China, and the virtues of ambush marketing.

Listen to - or download - the podcast here.

Olympics: The Real Issues are Not Pollution and Censorship

In the Hutong

I really need a fridge in this office

0939 hrs.

The folks at Advertising Age have asked me to contribute to their Olympic blog over the next couple of weeks, and my first post dove into an issue that I've been looking at for six months, namely whether Beijing may mark the end of what I have come to call the "Uberroth-Samaranch Model" of Olympic finance built largely on the pillars of private sponsorships and the sale of broadcast rights.

In the piece, I lay out five questions that will probably not be answered when the Olympic torch is finally extinguished on the 24th, and that together suggest it is time for the IOC to reexamine the way it does business, much as it did in the wake of the financially disastrous XXI Olympiad in Montreal in 1976.

Travel mogul Peter Uberroth, who took the reins of the Los Angeles Olympic Organizing Committee (LAOOC) in 1979, was given one major goal: help Los Angeles avoid Montreal's debacle. The fact that Los Angeles already boasted a host of sports venues helped, but Uberroth was the first to systematize sponsorships and to price television rights to their market value. Since the Los Angeles Games (which turned a $250 million profit), those two revenue streams have done much to sustain the Olympics.

Much has happened since, not just in the Olympics movement, but in the marketing business and the television industry. Uberroth's model may be past its prime.

Check out the article on AdAge.

Olympics: Beijing is Better without Billboards

In the Hutong

Popping Strepsils like candy

0921 hrs.

CORRECTION: Media's Live from Beijing Blog has posted my take on Beijing's "draconian" removal of thousands of outdoor billboards. You can find the article here.

Full Disclosure

Futong East Road, Wangjing

Dodging oncoming traffic

1547 hrs.

As someone with business interests in many (but not all) of the industries I cover, I have occasionally struggled with the issue of disclosure. Having never taken a journalism course or done much research on the topic, I've been a bit oblivious about the rules. As I've become more regular about posting and my readership has begun to rise, I felt it was time to come clean. But I haven't known how.

Recently, however, I stumbled upon a site called DisclosurePolicy.org. The site uses a simple tool to help you design a disclosure policy that is appropriate for you and your blog. Check it out. In the meantime, here is ours, which will be posted as a separate page attached to the blog:

This policy is valid from 17 July 2008

This blog is a personal blog written and edited by me. For questions about this blog, please contact David Wolf (siliconhotong at mac dot com).

This blog does not accept any form of advertising, sponsorship, or paid insertions. We write for our own purposes. However, we may be influenced by our background, occupation, religion, political affiliation or experience.

This blog abides by word of mouth marketing standards. We believe in honesty of relationship, opinion and identity. The compensation received may influence the advertising content, topics or posts made in this blog. That content, advertising space or post will be clearly identified as paid or sponsored content.

The owner(s) of this blog is compensated to provide opinion on products, services, websites and various other topics. Even though the owner(s) of this blog receives compensation for our posts or advertisements, we always give our honest opinions, findings, beliefs, or experiences on those topics or products. The views and opinions expressed on this blog are purely the bloggers' own. Any product claim, statistic, quote or other representation about a product or service should be verified with the manufacturer, provider or party in question.

This blog does contain content which might present a conflict of interest. This content will always be identified.

To get your own policy, go to http://www.disclosurepolicy.org

Quoted: The sign of the times is no signs

In the Hutong

Wondering how gross the weather can get

1724 hrs.

In part to prevent ambush advertising around the Olympics, and in part to tone down the level of in-your-face advertising in Beijing before the Games, the city's government has taken down over 30,000 outdoor advertisements in Beijing, including some of the most high-value billboards in the country. Normandy Madden gives a good rundown in the July 7 AdvertisingAge.

George Gallate, the Asia-Pacific CEO of Euro RSCG, is not happy.

"I'm quite surprised by the amount of control they are able to do [sic]. But this degree of control is one step too far in one of the most important aspects of an open economy, the right to advertise."

Leaving aside the fact that my most recent check of political science texts fails to turn up a mention of a "right to advertise," Mr. Gallate and his fellows in the ad business are understandably tweaked: some of those billboards list out at over US$50,000 a month, which would mean just under $9,000 in agency commissions at standard rates for a single billboard.

The ban doesn't stop at billboards - it includes the light-boxes along Beijing's main thoroughfares, bus shelters, and even the ads on buses and subways. Either the ads are being sold to Olympic sponsors at highly preferential rates, or they're being held back.

Chinese whispers and the art of corporate philanthropy

In the Hutong

Starbucks lemon tea is a diuretic

1752 hrs.

Moments of national emotional outpouring can be times of great peril for foreign companies in China. Foreign companies are easy targets (just ask Carrefour), and the high profile that served you so well yesterday becomes an instant liability. The best response in these situations is often to lay low and ride out the storm. 

But there are moments when standing to one side in the face of national tragedy is unconscionable. One of those moments came in the wake of the Great Sichuan Earthquake of May 12, 2008. 

J’accuse!

To their credit, the foreigners stepped up.

In rapid succession, one foreign company after another stepped forward to offer assistance, giving in kind if what they produced could help, giving in cash if in-kind was inappropriate, and in many cases doing both. Some companies dug into their corporate treasuries, others also organized employee donations. Many gave something, some gave a lot. 

But it was not long after the news began reporting episodes of selfless corporate gift-giving that SMS messages and blog posts began to circulate, criticizing a host of companies - many of which had in fact given quite a lot, but had refrained from publicizing their gifts - for stinginess in the face of human tragedy, accusing them of either giving nothing or not enough.

Dance of the eThugs

Many here in the Hutong, including the Party Secretary, expressed their disgust at these lynch-mob tactics. At best, these were righteous outbursts of people hurt by what they believed to be the failure of foreign companies to live up to their end of China’s implicit social contract.

At worst, though, there was some less-than-charitable activity taking place. As I mentioned in a recent post on Internet-word-of-mouth in China, there are companies and agencies who are not above hiding behind false identities or anonymity and spreading disinformation about rivals.  

It would be foolish for anyone to levy a blanket indictment on China’s netizens for this eruption of ill-founded bile. At the same time, it would be foolish to ignore what it implies. 

Charitable values and the value of charity 

The Judeo-Christian-Islamic (JCI) tradition is quite specific about the ways charity should be given. Rabbi Sir Jonathan Sacks, in his thought-provoking ethical treatise To Heal a Fractured World, notes that the Jewish sages identified eight different levels of charitable giving. One relevant passage:

"What matters is not how much you give, but how you do so. Anonymity in the giving of aid is essential to dignity. The poor must not be embarrassed. The rich must not be allowed to feel superior."

Even though frequently observed in the breech, the importance of giving anonymously is hard-coded into JCI tradition. The greater the earthly reward the giver takes for his gift, the lesser its ultimate value as a genuine act of giving. (Even the U.S. Internal Revenue Service has addressed this concept in the way it values donations to philanthropic causes.)

In China, the reality is quite different. While there are many people in China whose views accord more closely to the JCI approach, There is among many Chinese almost an expectation that a giver would take credit for a gift. Why ever not? After all, wasn’t the credit the main point of the gift in the first place?

From you much is expected

It is this implicit expectation among parts of the audience that makes philanthropy in China so complex. In the U.S., a company or individual may choose to give openly or anonymously. Nobody asks. In China, however, while many people approve of anonymous giving, many people will assume that if you don’t talk about it, you haven’t given.

There is an unspoken rule for companies doing business in China. If you come here to make money, the rule goes, you are expected to give something back. The rule applies to both foreign and local firms, but the implicit belief is that somehow the foreigners owe more. 

As a rule, corporate giving during “normal” times does not fall under much scrutiny (although this will  change in the not-too-distant future.) In moments of national crisis, however, there are people keeping score. Some of them are impartial. But some of them are working for the other team.

No modesty please. We’re Chinese

Put simply, companies and prominent individuals need to be prepared to give in times of disaster, and they need to be prepared to talk about it.

The complex audience in China - some preferring anonymous giving, some keeping score, and lots of people in the middle - changes the way you will need to give. Transparency demands that not only will you need to err on the generous side of caution, you must be prepared to up the gift soon afterward. 

Communicating about it, however, is more of an art form than a science. What you say about your gift, how you say it, and how you pass the word are situational. What comes across as discreet communications in one situation may come across as crass and uncaring in another. 

When I suggested the importance of talking about your giving on Twitter, somebody actually asked the question - at what point does all of this talk devolve into disgusting self-promotion? (I think he was being rhetorical, but I digress.)

My answer was that there is no clear line between discreetly publicizing the good works you have done and sounding like you are turning disaster into corporate opportunity. It comes down to good instincts.  

The Imagethief gave an even better answer - it is like the line between pornography and erotica: I cannot define the former, but I know it when I see it. 

Talk, but listen first

This is another one of those places where having a really good gut feel for the the market and your audiences is critical. 

Even more important, especially for those of us not born and raised in China, is having smart people around you who can instinctively tell where the winds of zeitgeist are blowing. Take their counsel and listen to what they have to say. 

Not only will you protect your reputation, you will also set in motion a constructive cycle in your company where everybody sees the value of corporate and personal giving, and where you will be more likely to give (and give well) the next time. 

And that’s a very good thing. 

China's war for the soul of online corporate communications

In the Hutong

It's a wet wet wet wet wet wet world

1913 hrs.

Last week BusinessWeek ran an article on the way some companies and their agencies try to deal with bloggers and BBS posters in China, a piece that was unfortunately titled "Inside the War Against China's Blogs."

This is not a war

The article itself, and specifically the way it associates by proximity the thoughtful and highly ethical work of Sam Flemming's CIC with the rather seedier efforts at online manipulation practiced by some other agencies, underscores how complex the topic is. It can be quite difficult for even the most intelligent and dedicated business journalists to miss the critical nuances separating different tactics and techniques that are emerging to help companies conduct marketing and communications on the Wild, Wild Web, all the more so for company executives who spend far less time looking at the matter.

For his part, Sam has written an intelligent, measured clarification in his blog. In addition to a reasoned defense of the more wholesome parts of the online word-of-mouth business, he takes powerful exception to the use of the "war" metaphor in the title (likely the work of some hard-pressed editor.)

Failing the smell test

Paul Delinger on his excellent The China Vortex explores the particulars of one company mentioned in the article, and notes in his conclusion:

"I find the whole practice of hiring Chinese and paying them to post favorable comments on a per-posting basis to be an unethical PR practice. According to the BW article, this is common practice."

Imagethief notes in his post about the article that:

"Imagethief has been doing PR in China long enough to know that the ethics of Chinese media, including online media and therefore of the PR industry that surrounds it are still pretty grey. But that's not the whole picture..."

There are some morally questionable things happening out there, to be sure. But not everyone does them.

What concerns me is that well-intentioned executives of respectable companies, desperate to address some of the unsavory (and therefore viral) things that are being said about them online, may fall prey to the contention of their agencies that "hey, everybody does this in China, and if you don't, you are going to have real problems here."

A warning to corporate executives of all flavors. When your agency says that, begin questioning immediately.

Often, such contentions are born of a lack of sophistication that can rear its head in an agency populated by account managers with less experience than time in a classroom. Possibly they are born of institutional laziness, a desire to do things in a certain way because that is the kind of service they are set up to deliver. At worst, such bold statements come from agencies who have a vested interest in getting the client to think that way.

Trust your instincts. If something sounds like it is wrong and feels like it is wrong, it probably is. Ask hard questions, and do not settle for pat answers.

Zubin Mehta, meet Charlie Parker

Next to newspaper editors, there is probably no group of people on the planet more confounded by the explosion of blogs, social networks, and (in China) bulletin-board systems (BBSs) that public relations folks.

Clients come to us desperate for answers. Some of us counsel patience, principles, and parley. Not all clients are happy with those answers - they are type-A, take charge folks who demand "solutions." This opens the door for agencies who feel the need (or see the opportunity) to respond with something that looks like a concrete solution, even though it is really meringue.

But the ugly truth is that we as marketing communicators are all still figuring this out.

We don't have a toolkit of time-honored techniques and practices to address what is going on in the way we do for advertising, direct marketing, media relations, crisis management, government affairs, or any of the dozen or more sub-crafts in the industry. All of this is as new to us as it is to everyone else, and while some agencies are further along in finding answers than others, it is all still experimentation right now.

Agency folks don't want to admit that - they are used to selling something clear, definable, and proven. It is kind of like getting a great symphony conductor comfortable with the improvisation of jazz. It is hard. It demands rewiring the very way you think.

So the best agencies, the really smart ones, start with a set of principles that guide them in the process. (The World of Mouth Marketing Association - WOMMA - has come up with some good ones.) They look at the specific challenges a client faces, they listen to the audience and start improvising. And that is what happens. Great online PR - indeed any great PR in an age where participation increasingly trumps Big Media - is like jazz, not a symphony.

Beyond just wrong

Unfortunately, not everybody gets this. As the BusinessWeek article points out, there are agencies who are far more, um, utilitarian in their approach. Principles are for suckers, they think. The client wants solutions, we have got a solution here that will make their problem go away, and they are willing to pay for it. What is wrong with that?

What is wrong, they ask, with a company paying an agency not only to pose online as fictitious people who love the client and their products, or pose as someone who hates their competition and their product, but also to arrange to delete negative comments already posted?

(And how dare anyone attempt to impose their foreign/western/judeo-christian-islamic values on the people of China!)

If the contention that such behavior is evil, wrong, and contrary to the unwritten rules that govern the Internet is not convincing, here is why, in enlightened self-interest, you should perhaps consider that it is in your enlightened self interest to steer clear.

First, and most important, the audiences companies are trying to reach in China via online word-of-mouth value one thing above all else: credibility. If a company wants to build credibility and support among China's netizens, it is essential to come across as a company that understands - and lives by - their values. Creating fictitious personas or paying to delete their comments betrays their values and runs the risk of undermining if not permanently damaging a company's reputation with this valuable audience.

Second, engaging in such tactics suggests to China's online population that the only way anyone is going to say something positive about the company in question is to pay them to say it. That is hardly the way to build confidence in a brand.

Third, if a company gets caught doing this in China, anyone who does say positive things online about that company will be instantly suspected of doing so only for the payola. In short, a company impugns by association the credibility of its best evangelists, and betrays their trust, ultimately eroding their support.

Fourth, as the BusinessWeek article demonstrates, there is global interest in this topic. If a company's actions on this score were to be made public, there is the risk of global online backlash against the company.

Fifth, as proven by codes like those promulgated by WOMMA, the International Public Relations Association, and the International Association of Business Communicators, engaging in this type of deceptive behavior defies public and government expectations that companies abide by generally accepted industry standards. At worst, this leaves you open for investigation. At best, it gives your competition an opportunity to look cleaner than you.

If the above is not enough reason for you to avoid this kind of behavior, good luck and zai gezunt.

No excuse

There will be those who protest that I know not of what I speak.

Some will say "you don't understand. You are a foreigner. This is China, and China is different."

Even granting everything else suggested in those remarks, China is different, but it is not so different that company behavior that does not hold up under the light of exposure somehow becomes right. If the public, or even a large part of it, would be outraged at a corporate practice, it is unsafe (if not pernicious, dangerous, or downright evil) to continue or countenance, . As such, it is our ethical duty as advisors to our clients - or as corporate executives - to steer clear of such practices.

Others will suggest that "everybody else is doing it," so they have to as well.

With respect, that line hasn't held water with the public since the Nuremberg trials. All it does is prove that those following the herd lack the imagination and creativity to come up with a better way to defend a company's reputation.

So often in China I am reminded of H.L. Mencken's words: "For every problem there is a solution that is simple, workable, and wrong."

Doing the right thing here is often difficult and fraught with complexity. But as experience continues to prove, it is the only course that truly pays off.

New Word-of-Mouth manual...for free

In the Hutong

Prepping for a photo shoot

0928 hrs.

Dave Balter, creator of Boston-based marketing firm BzzAgent, co-founder of the Word of Mouth Marketing Association, and author of The Grapevine, has just released a new book called The Word of Mouth Manual: Volume II. 

For those of us in the business of actually getting people to notice, desire, buy, and talk about cool products, or even those of us who want to figure out how to build our own brands - especially in Asian cultures where word-of-mouth is so intrinsically powerful - this book is a must read.

What makes it better is that the book is a quick, easy read.

What makes it a no-brainer is that Dave is giving away PDF copies of the book to anyone inclined to click here.

Download it and give it a read - for those of us in China it is a heck of a lot easier than ordering from Amazon, paying the freight, and waiting two weeks. 

America's latest tool of public diplomacy

In the Hutong

I feel an iTunes jag coming on

1908 hrs.

In the global battle for hearts and minds, countries employ a growing arsenal of weapons in their efforts to build support among citizens of other countries. Leaflets, airborne radio stations, satellite news channels, and even celebrities contribute to the efforts of their home countries to build influence and soft power.

The ever-innovative U.S. Navy has decided to employ a culturally appropriate device in its effort to head off potential protests as it plans to base its first nuclear aircraft carrier in Japan:

Manga.

That's right, America's latest tool of public diplomacy is the graphic novel, targeted at Japanese adults and delivered in your choice of English or Japanese. 

Whenever I think my job as a business communicator is tough, I think about the men and women engaged in the thankless task of making their countries more attractive to people around the world. Most of them are poorly paid (relative to their skills), put up with a ton of bureaucracy, and have to fight to get any remotely creative idea approved. 

Whoever got this little device approved deserves an industry award for excellence public affairs.

Check it out - unfortunately, I can't, given the U.S. Department of Defense is a little prickly about allowing access to their sites from URLs in China. Wonder why?

McDonald's Mary Dillon on Olympic Sponsorship

In the Hutong
Stressing about my physical
2119 hrs.

AdAge interviews McDonald's Chief Marketing Officer Mary Dillon on Mickey D's plans for the big event this summer, including bringing 200 kids from around the world to Beijing.

The Darfur question comes up of course, and it's pretty clear that McD's is not going to be walking away from the Olympics.

Pretty clear though, that nobody is yet asking the big question: does Olympics sponsorship deliver return-on-investment?

McDonald's Mary Dillon on Olympic Sponsorship

In the Hutong
Stressing about my physical
2119 hrs.

AdAge interviews McDonald's Chief Marketing Officer Mary Dillon on Mickey D's plans for the big event this summer, including bringing 200 kids from around the world to Beijing.

The Darfur question comes up of course, and it's pretty clear that McD's is not going to be walking away from the Olympics.

Pretty clear though, that nobody is yet asking the big question: does Olympics sponsorship deliver return-on-investment?