:: as I think most of you know, I’m a strategist at Edelman Digital Asia Pacific. As such, I just wanted to share some news.

Together with our partner Brandtology, we launched the Asia-Pacific Digital Brand Index (DBI), a regional study of online conversations about big tech brands covering 10 markets (Japan, Korea, Mainland China, Hong Kong, Taiwan, Malaysia, Indonesia, Singapore, India, and Australia). The study captures and distills 800,000 mentions of 233 major technology and telco brands on over 4,000 sites.

For more details and market-by-market data / fact sheet downloads, link here. [Google was #1 and Dell was #10, link here to found out the rest of the top 10.]

The study’s analysis and insights are quite telling.

One of the key take-aways for me (something John Kerr, Edelman Digital Asia Pacific head discusses more here) is that while having a consistently aligned social media strategy across Asia markets on a macro objectives level is crucial, tactic execution needs to be locally contextualized to ensure success. The nuts and bolts of brand engagement simply won’t work uniformly across such diverse social media environments.

The study also puts forth an interesting series of indices that help local and regional marketers find measurement benchmarks around important areas like Internet word of mouth conversation volume, engagement (or mentions per unique voice), channel volume / breadth, etc. All very much worth checking out.

To learn more, feel free to get in touch:

Also, see below for a video of John Kerr giving a quick overview of the study. To better understand the study’s methodology, link here.  // AjS

[Full disclosure: Edelman and Edelman Digital represent technology brands around the world, many of which are included in the Edelman Digital Brand Index.]

:: in China, discussion of online Internet word of mouth (IWOM) PR crises always seem to be focused on foreign companies, but this is a bit misleading because local Chinese companies get it too. Online crises in China comes in many forms. Sometimes they are brought on by circumstances outside of a brand’s control – a freak accident that explodes into a storm of online controversy, or changes in government policy that throw a benign long-term practice into the worst possible light. Other crises are unfortunately engineered by the brands themselves, through carelessness or malice. The five examples below of Chinese brands in crises online in China show that in many cases, rather than the details of the problem itself, what’s important is how a brand responds to the initial crisis that makes a lasting impression on Chinese netizens. A swift, engaging, well-targeted response can make all the difference between a satisfied group of online consumers / stakeholders, and a devastating rumor that will continue to harm a brand’s image and reputation for years to come.

BYD’s “five-star” scandal ::
BYD is a domestic Chinese auto manufacturer that aspires to be an international brand. Although it has attracted considerable attention this year for its electric models, more recent news reports have focused on a safety scandal involving a traditional model. In July, a BYD F0 car rear-ended a mini van. Although BYD has boasted about the car’s superior safety rating (BYD claims “five-star” passage of the C-NCAP collision test) none of the F0’s air bags inflated when the collision occurred. The owner of the car took BYD to court for misleading customers with false test results. Shortly afterward, the China Consumer Association, the quality supervisor, issued a warning that the collision test results for the F0 are not due to be released until September, so the “five star” test results cannot not true. This statement brought the incident to the attention of the national media, and from there it spread to online forums where netizens blasted the company’s dirty dealing. In the aftermath, BYD responded by releasing an open “letter of gratitude” implying that the lawsuit was an effort by its competitors, referred to as “foreign brands and co-brands,” to fight the pressure of BYD’s climbing sales figures. An article entitled “BYD incident exposed an unspoken rule; the collision test gates is all bullshit” was published in the print media and widely republished on the major portals and auto websites. On a more grassroots level, an online post entitled “Protest! F0 was bullied. Let’s comment and tell the truth” emerged on a BYD sponsored forum and has been reposted elsewhere. Although these articles have currently diverted attention from BYD’s misleading advertising to focus on the company’s victimization at the hands of big brands who feel threatened, the cycle of the scandal is probably not finished yet. It remains to be seen whether BYD’s appeal to nationalism will ultimately work out to its benefit on the Chinese Internet, or if it will eventually have to speak directly .

Mengniu’s OMP Scandal ::
Milk Deluxe (特仑苏), a premium brand of milk from Chinese dairy heavyweight brand Mengniu, was marketed to wealthy consumers as an especially healthy beverage choice. The packaging and advertising heavily emphasized the presence of “osteoblast milk protein” (OMP), an additive that Mengniu claimed would help the absorbtion of calcium to promote bone growth. With consumers and the Chinese government wary of any and all additives to pure milk in the wake of 2008’s melamine scandal, the attention of Chinese netizens and the local mainstream media turned to OMP. A government quality investigation of Mengniu’s OMP practices hit the media in February, 2009, and sparked intense online debate (“Who’s messing around? It’s Mengniu! Is someone afraid of chaos? Are we just supposed to sit and drink poisoned milk in silence so the world will be at peace?!”). Because the product was aimed at a relatively limited consumer group, Mengniu’s difficulties were not directly related to the additive itself. Instead, it was its ambivalent response to the crisis that got it into the most trouble online from Chinese netizens who are highly sensitive to perceived hypocrisy. Initially, Mengniu claimed that OMP contained IGF-1, but when news came out that IGF-1 could be carcinogenic in large doses, it changed its tune and said that OMP was essentially Milk Basic Protein, an accepted food additive. Fatigued consumers didn’t care much at this point (“Experts say milk with OMP isn’t harmful to your health.” “Then let the experts drink it first“). However, when third-party tests were released showing that OMP did not have nearly the extent of health benefits that Mengniu claimed, the company was hit again. A posting on the influential popular science community blog Squirrel Society concluded “To make such claims about efficacy based on such preliminary research, it’s quite an understatement to say they merely ‘exaggerated the effects’.” The additive was eventually banned, and Mengniu, which had emerged relatively unscathed from the melamine scandal, ended up with a black eye.

Wang Laoji’s additive scandal ::
Wang Laoji (王老吉凉茶) is a “herbal tea” drink that rivals Coca-Cola in popularity in China, but is preferred by many because it’s a Chinese product rather than an international or American brand. It also plays up the health qualities of its formula, which is based on the use of traditional Chinese medicinal ingredients. This practice got the brand into trouble earlier this year. In May 2009, Ye Zhengchao (叶征潮) accused Wang Laoji of giving him gastric ulcers because it contained prunella vulgaris (夏枯草), an ingredient usually associated with Chinese medicine. The Ministry of Health had once claimed that adding prunella vulgaris to food and drink violated the Food Safety Law. The charges were heavily reported in the media and became a popular conversation topic on BBS discussion forums (“Wang Laoji is poison that’ll hurt your liver!”). Web portals, such as the Influential Brands website has a whole channel devoted to Wang Laoji and the case. The case even acquired its own “gate” : Additive Gate (添加门). [Chinese netizens are in the habit of adding "gates" to the ends of catch phrases representing particular online scandals.] Anti-fraudster and TCM-buster Fang Zhouzi weighed in with a blog post about implications of drinking herbal teas drinks, further polarizing the issue: now Wang Laoji’s defenders were sticking up for the entirety of traditional Chinese medicine. The popular nationalist-leaning Tiexue BBS hosted many threads related to Wang Laoji, both positive and negative. Defenses were widespread based on Wang Laoji’s previous reputation: for example, a post dated May 11 details the first time that netizens noticed the brand, which was during the Sichuan earthquake in 2008: “Wang Laoji donated 100 million yuan instantly, and is far superior to the wealthier Coca-Cola and Pepsi,” and said that the Ministry of Health should take care of Coca-Cola first if it wanted to clean up Wang Laoji. Elsewhere, netizens were not entirely negative about the additive itself: a Baidu Knowledge answer talks about the widespread notion that people in Guangzhou use prunella vulgaris to brew medicinal soups, and that it’s not bad for the body at all. The company made no response: when China Newsweek tried to interview a company spokesperson about the case, they were rebuffed as were other Chinese media outlets. On May 12 the Guangdong Food Profession Union (广东省食品行业协会) declared that prunella vulgaris had been listed in the Ministry of Health’s list of legal food additives in 2005 and that it is not known to cause gastric ulcers. So the takeaway seems to be that if you’re a well-regarded national brand known for philanthropy and that’s connected to a point of national pride, you may be able to ride out a health crisis by simply relying on the government and the patriotic public. Wang Laoji  may have avoided a crippling scandal this time round, but the poison allegations will continue to circulate online, and when they are brought up in the future, there will be no company response to rebut them.

China Post’s EMS handling scandal ::
Around August 24, a several minute clip appeared online that showed postal workers unloading EMS (China Post’s Express Mail Service) packages from the back of a mail truck. Rather than handling them carefully, as customers might imagine, the workers rolled or threw the packages onto the ground, where they landed with audible “thumps.” One of the comments on the post read, “This is a serious infringement on consumer rights….it must be strictly investigated, and management must be overhauled. Otherwise, our countrymen will have no choice but to choose Fedex, UPS, or DHL.” The video quickly spread to other hosts, like 56, and sparked animated discussion among netizens. On the Xitek forums, the netizen who started the thread said “Don’t use EMS from now on,” and similar sentiments echoed across the Chinese Internet. However, netizens confessed that many times they are in a bind: in urban areas there are lots of choices of delivery services, but China Post is practically the only option in smaller towns across the country. The response so far from China Post has been entirely media-driven. Although the mail truck’s plates placed it in Panzhihua, Sichuan, it was the Hangzhou-based Qianjiang Evening News that picked up the story in the interest of its readership, which would be particularly concerned because the city is home to the headquarters of online auction house Taobao and many small online retailers. The newspaper reported a mealy-mouthed statement from the Panzhihua Post Office: “The truck in the video isn’t likely to be ours because our mail trucks are mostly Chang’an vans. From the scene, we are not able to confirm the registration number at the moment,” which also suggested that the clip could be a malicious hoax. The paper also spoke to a Hangzhou postal official, who said that such mishandling never occurred in his city. Netizens who commented on QQ’s repost of that news item were dubious, with most seeing the official’s statement as a purely cover-your-ass action.

Google.CN’s porn scandal ::
In June, Google China was the subject of CCTV news reports that accused it of violating social morality. As part of a national campaign against pornography and other corrupting online influences in easy reach of the country’s youth, CCTV revealed that Google.CN would suggest filthy phrases and sentences to innocent netizens searching for completely ordinary, benign terms. The accusations blanketed the national media both online and off, and although netizens were generally sympathetic to Google because of previous prejudices toward CCTV’s hatchet-jobs in the service of government propaganda campaigns, it is still instructive to see how Google responded to the crisis. Unlike the dodgy medical ad crisis last December, during which Google China’s protestations made it appear like a defiant outsider attempting an end-run around China’s advertising law, its attitude all along was one of active cooperation. Its fast response drew a favorable reaction from many Chinese netizens. Initially it worked to remove the search suggestion tool that had gotten it into trouble, and thereafter made periodic statements that it was cooperating with the authorities to ensure that its search results were acceptable. At least in the context of Internet word-of-mouth, what started out as a slam on Google’s online reputation turned into a credibility hit for CCTV. Google declined to comment, preferring to let netizens draw their own conclusions about the Google.CN vs. CCTV “PK” matchup. Some netizens even suggested that Baidu, which had been blasted by CCTV for accepting paid ads for medical products it knew were of questionable legality, had made up with the network and had called in the hit on its international search rival. And when Chinese netizens discovered that CCTV had interviewed its own intern for a man-on-the-street response, and when they unearthed evidence that CCTV had essentially to create the pornographic sentences, Google China continued to cooperate the authorities and let the IWOM play out on its own.

// AjS

[Friday 5 is the product of my work for Edelman Digital (China). Link here for the full Friday 5 archive. If you'd like to be added to the bilingual (English & Chinese) Friday 5 email distribution list, please send me an email at: adam DOT schokora AT edelman DOT com.]

:: Sam Flemming is the co-founder and CEO of CIC (blog), the first and leading Internet Word of Mouth (IWOM) research and consulting firm in China. His company is at the forefront of exploring Chinese digital culture and helping companies and brands understand how Chinese Internet Word of Mouth is impacting and can be used to inform marketing communications, customer relationships, and research and development.

56minus1: Why is IWOM relevant for companies / brands in China? We all know about the crisis side of things online in China, with nationalistic “fenqing,” etc., but what kind of opportunities does the world of Chinese IWOM present companies / brands in China?

Sam Flemming: Ultimately, we see IWOM as INTELLIGENCE that enables brands to understand and take part in the way IWOM is redefining the relationship between institutions (like brands) and consumers. This is the theme of our recently released white paper series, see part 4 here; I also wrote about this here. IWOM is an essential part (among many) of the marketing communications mix: it’s part of crisis / reputation monitoring, marketing effectiveness measurement, market research, marketing (i.e. online community marketing), competitive intelligence, and creative inspiration. IWOM is, in essence, reshaping each of these different marketing communications disciplines.

What are some of the biggest mistakes you and your team see companies / brands / agencies making online in China regarding IWOM (or digital marketing / PR / interactive work)? Why are they mistakes?

Sam Flemming: One big mistake is thinking they can control IWOM by posting fake messages or getting negative messages deleted (see great example here; the whole Sanlu Milk powder case is also worthy of mention). IWOM is made up of the hundreds of millions of voices of the Internet community and to assume that as a single institution the brand can control IWOM is a fantasy at best.

Without naming names or pointing fingers, tell us a little bit about the darker side of the Chinese Internet (i.e. astroturfing, portals’ manipulation of scandalous brand crises for page views, its overly commercial nature, sketchy forum administers working with astroturfers, privacy issues, etc.)

Sam Flemming: Here’s my quick take on some of the “hot button” issues:

1. The biggest difference of IWOM in the West and in China is that Chinese IWOM is hosted on very commercial platforms like portals, whereas in the US, for example, blogs are not. When platforms are commercial, the incentives for the platforms to do most anything to drive page views, including courting controversy, is very strong.
2. Astroturfing is relatively cheap due to lower labor costs in China and it offers a very tangible solution for agencies or managers to appear to “do” something “web 2.0″ even if it doesn’t have much effect (other than alienating and harming the community). You and I both shared thoughts on this here.
3. Some forum administrators will work with astroturfing agencies to post messages for a fee, this is true; this actually points to the larger trend that IWOM platforms are commercial and need to generate revenue for the value that they provide (i.e. connecting brands to consumers). Charging brands to connect / participate “in the conversation” within a community that takes time / effort / money to build and maintain is not inherently wrong, especially when it can provide distinct value. Why shouldn’t Twitter charge brands for commercial accounts when companies like Dell have reportedly generated US$1 million in 1.5 years (in the West, not in China). However, such processes / policies should be transparent, and they most often not in China.
4. Monitoring and removal of content is largely done by the commercial IWOM platforms themselves; it is in their best interest to not have content that is offensive or breaks any law.

56minus1: What are some of the smartest / most-effective campaigns you and your team see companies / brands / agencies executing online in China regarding IWOM (or digital marketing / PR / interactive)? Why are they smart / effective?

Sam Flemming: I outline our view of “IWOM centered marketing” here where I talk about how Johnson Baby has done great things with its Mom Ambassador program and how Intel used a simple but powerful approach to generate buzz within the Intel (aka “I-fan”) community.

56minus1: Can u share a few examples of CIC clients using CIC insights to inform their digital marketing / PR / interactive strategies or campaigns?

Sam Flemming: I can’t get into too many specifics, but our insights about sports communities regularly feed into the creative for Nike digital and media. We track campaign effectiveness of several other clients by tracking various elements of IWOM buzz (see here for example measurements) and combine these findings with other digital and market research agencies to put together comprehensive reports that provide a detailed understanding of campaign performance from all important angles. We also work with R&D departments to assist in their product development and with PR departments for reputation monitoring. You can see plenty of case studies of how brands use IWOM intelligence to help drive their communications in our recent “The Internet is THE Community” white papers, especially part one and part four.

56minus1: Who “gets” IWOM and the “digital imperative” best in China? PR firms, advertising agencies, interactive / digital agencies, etc.? Or, are they all hopeless? Who gets its the least (or is the most hopeless)? Why? What brands really get it?

Sam Flemming: Digital agencies seem to do better, in general, since they are more familiar with the overall digital environment. PR and advertising still view social media as a last minute add on. These are generalizations, and there are always exceptions. Of course the agencies and clients who get IWOM the best are the ones who work with companies like us.  ;-)

56minus1: What are three (or more if you have more) IWOM (or digital marketing / PR / interactive) trends in China to keep a look for in the near future?

Sam Flemming:

1. SNS audiences prove finicky: SNS will continue to grow, but the key challenge will be for the SNS players to garner loyalty. Xiaonei was 2007 / 2008. Kaixin is 2008 / 2009. What’s next? I am not sure there is much loyalty with Chinese netizens.
2. Development of vertical SNS: I predicted last year that vertical SNS like Babytree would become more popular. I still think this will happen as there are already so many BBS verticals with powerful communities (i.e. Xcar and HoopChina), that it seems like a no brainer for existing BBS communities to leverage SNS functions or new SNS verticals to develop within popular topic areas.
3. Refinement of communications strategies based on different roles of blogs, BBS, and SNS: Blogs are driven by self expression (i.e. content driven by “me’”), BBS are driven by information / topics (i.e. content driven by “topics”), and SNS are driven by netizen relationships. Like any good conversationalist or community member, brands need to shape their communication approach based on understanding the motivations and purpose of each communication space. This was a topic that came out in our IWOM summit meetings with 17 of our clients late last year. I also wrote about it in detail here.

56minus1: What’s special or unique about Chinese netizens and local Internet culture? Interesting examples?

Sam Flemming: I would say the sheer force of the Internet as a primary and mainstream media which both influences and serves as a channel for consumers, especially in top tier cities, is unmatched by any other market, at least in the West (Korea could make some claims here). We continually document examples in our white papers (see especially our IWOM watch half year reviews like this one and special IWOM watch on the Sichuan earthquake here) and on our blogs www.seeisee.com/sam (English) and www.seeisee.com (Chinese). Another unique element is that, as I mentioned above, the hottest social media platforms are largely commercial which can lend to a different dynamic than the West (i.e. there may be a certain tendency to highlight controversy).

56minus1: Does CIC have plans to move from a research / consulting firm to an agency that executes digital / interactive campaigns? Considering CIC’s insight and understanding of the space in China, seems like a logical step. Why haven’t you done it already?

Sam Flemming: We believe it important to serve as 3rd party, credible, and objective partner in providing research and consulting to our clients. If we execute, then we lose that unique positioning. We don’t think the market needs more agencies; we think agencies need to better learn to appreciate how IWOM can inform their strategy and execution.

56minus1: Talk about your business. When did the company start? How have you grown over the years? Practices? Products? Offices, staff numbers, company culture, plans for the future, hiring, etc.

Sam Flemming: Founded in 2004, CIC has always focused exclusively on IWOM research and consulting. We have developed our own proprietary text mining technology for the unique Chinese social media landscape and have a dedicated team of analysts who understand IWOM, communications and vertical industries in China (esp. auto, mobile phone, consumer electronics, cosmetics, baby, sports, and beverage). I do think we have a unique company culture as an independent agency which is “out of the box” as part of its very DNA.

56minus1: Thanks Sam.

// AjS

:: public relations, marketing, and advertising blogs form a closely-linked community online in China. See below for a few noteworthy examples. The first four items are well-known in their respective fields and show up in each other’s blogrolls with heavy interlinking. The fifth item is a ringer that serves to show how traditional PR in China is taking advantage of blogs and online communities.

1. Flyu
Flyu (飞扬新锐) says it “focuses on social media marketing and community word of mouth.” It’s a blog written by Yang Lei, former marketing director for the Yupoo photo site and founder of a number of online ventures including Weyii.com. Topics covered on Flyu include branding, social networking site (SNS)-related marketing, and Internet word of mouth (IWOM). Recent posts have followed the repositioning of Weyii.com from a cosmetics rating portal to a vertical SNS for women.

2. New Marketing Observer
Written by (孙志峰), this blog on digital marketing in the context of the Internet and SNS communities shows up on a lot of blogrolls. The author, a marketing professional in Shanghai, presents case studies of online marketing efforts and analyzes their performance, such as Starbucks’ experiment with SNS and Mengniu’s search engine optimization / marketing efforts.

3. General Web2.0 topics
IT Focus is kept by Liu Huafang (柳华芳), a well-known IT columnist. Liu analyzes a wide variety of Web2.0-related topics including marketing and serves up IT job placements on another section of his site. The Moonlight Blog is kept by William Long. Its articles, which cover topics ranging from hosting issues and software, are widely-cited by other tech blogs. The author closely follows developments in the search industry and also reports on new trends in Web2.0 technologies. A large proportion of the posts on both of these blogs is directly applicable to digital marketing and IWOM-related topics.

4. Corporate Sites
CIC, an Internet word-of-mouth research and consulting firm, keeps a Chinese-language blog which comments on memes, developments in Internet word-of-mouth marketing, and other online trends relevant to the communications industries. From time to time it also publishes research results (in English). The blog is closely followed by people in the Web2.0 / digital marketing business and is on the blogroll of a lot of other IWOM bloggers. China Focus Interactive is a company engaged in Web2.0-oriented marketing and has a blog, Sonia’s Buzz, that discusses IWOM and Web2.0-related topics.

5. Aggregators and portals
China PR Blog is an aggregator of blogs written about the PR industry and by PR industry professionals. It’s run under the authorization of the China International Public Relations Association, which also publishes the industry trade, PR Magazine. 17 PR, founded in 2004, is China’s earliest PR portal. It aggregates news, educational materials, expert articles, and other information as part of a Web1.0-style website (yuck!), and it also features blogging and forums as web2.0-style tools (yay!) for information exchange. It’s currently home to the widely-read PR blogger Gao Peng. iResearch.cn has a Web2.0 section that features in-house columnists as well as other news and analysis concerning blogs, SNS, online communities, and e-magazines.

// AjS

:: CIC has published an insightful four-part white paper series on Internet word of mouth (IWOM) development in China, series topics include:

1. The Chinese IWOM Landscape – An overview of the development, the architecture and the impact of Chinese IWOM. (EN / CH)
2. Alternative Ways to Measure Internet Community Dynamics – An introduction to some examples of community measurement indexes to display the dynamics of the Internet environment. This introduction will help brands and community owners systematically understand the impact and importance of community and IWOM from a third party perspective. (EN / CH)
3. The Diversity of Chinese Net Language – A look at the importance and uniqueness of Chinese net language and how it has become an integral part of netizens’ life online. (EN / CH, or on 56minus1 here)
4. Reshaping the Relationship between Brands and Consumers – Exploration of the power of the community and how the Internet Community is redefining the relationship between brands and consumers by leveling the playing field. (EN / CH)

Stay tuned, 56minus1 will be highlighting content from these papers with upcoming posts.

To learn more about CIC, link to its homepage here, its English blog here, or its Chinese blog here.

// AjS