Monday, 7 July 2008

Bloggers and anti-bloggers

Last month Business Week published an interesting article on the corporate war against disgruntled bloggers. This article shows the power of the blog and forums to cause corporate embarrassment and to hit profits and why the corporations are fighting back.

Inside the War Against China's Blogs [Business Week]


Daqi is one of a new breed of company that helps multinationals navigate China's perilous Web. Nike, (NKE) PepsiCo (PEP), McDonald's (MCD), French cosmetics maker L'Oréal (LRLCY), and others have hired the likes of Daqi, fellow Beijing outfit Chinese Web Union, and Shanghai-based CIC. These companies charge $500-$25,000 monthly to monitor postings and squelch negative information or to create positive buzz.

This year has brought the Net monitors plenty of opportunities to win clients as hot-tempered bloggers have attacked global companies for perceived slights to Chinese culture. Coca-Cola (KO) and French retailer Carrefour were lambasted for what was seen as support for Tibetan independence. McDonald's, KFC (YUM), and Nokia (NOK) have been tarred for allegedly being stingy with relief money after the Sichuan earthquake. And Citroën had to apologize for an ad featuring a scowling image of Chairman Mao. "If it touches on nationalism, or if the client clearly made a mistake and disrespected a customer, that's dangerous," says Sam Flemming, CIC's founder.

Paying a company to "seed" good vibes about a company appears to be rather underhand but clearly it goes on. When reading forums it is therefore essential to take the history and reputation of the poster into account and whether they are regulars.

The companies also can help clients win sympathy. Metersbonwe Group, a domestic apparel retailer, faced eviction from its flagship outlet in Shanghai last year when the local government wanted to replace Chinese-owned brands with big names such as Nike and Adidas (ADDDF). Daqi seeded the Net with opinions linking the issue to a simultaneous controversy over Starbucks' (SBUX) presence in Beijing's Forbidden City. While Metersbonwe ended up losing the space, Daqi says the pressure helped the retailer win a lease for a larger store. "In Internet forums we said: A Chinese brand is being pushed out while a foreign brand is still located in the Forbidden City,'" says Daqi's Zhou. "We got intense and rapid response. People were very angry." Metersbonwe confirmed that Daqi helped with the Shanghai case but declined to comment further.

So how much does it cost? A lot less than you would think. This is a cheap way to advertise and create goodwill unless, that is, it backfires when a company is found to be using these low paid bloggers to attack rivals.

Plenty of companies are willing to pay for positive spin. PR outfits hire students to write postings that boost certain brands and criticize the competition, says a staffer at a Western PR firm in Beijing. The job description of one online help-wanted ad reads: "Publicize and popularize [products] via online forums and blogs. Send at least 50 propaganda posts per day." Workers are offered 1.5 cents per post.



Sam Flemming said...

My name is Sam Flemming, CEO of CIC, one of the companies mentioned in this article. For an alternative view on the "online PR" situation in China, see my response to this Business Week article here:

Economist said...

Thanks for the comment - I will post your link as a blog post.

I agree in the main with your arguments.