I have been a bit remiss in writing up my China FOO camp experience from November 9-10. FOO Camps are organized by the O'Reilly group to bring together people from a variety of backgrounds who may not ordinarily meet to discuss and explore innovation. Tim O'Reilly is the one who coined the term "Web 2.0" and FOO stands for "Friends of O'Reilly." This event in Beijing was sponsored by IBM, among others.

Others have done a good job summarizing the overall experience, including Tim O'Reilly himself, Tangos , Rebecca MacKinnon, and Marc van der Chijs. Marc has pics here and Keso has pics here.

Among the highlights for me was participating in the discussion of social network in China. It was led by Michael Wong from Cootek, who has a real passion and interest in the topic and who did a great job moderating this "unconference." During the discussion, I had a chance to meet Wang Xing, founder of Xiao Nei as well as its new competitor, Hainei (see Tangos write up here). This discussion alone really made the whole trip worthwhile. It was great to hear thoughts from other people like Wang Xing who really have "hands on" experience instead of the typical foreign agency blabber you hear at foreigner focused events (I condemn myself in this statement as well). The discussion has been ringing in my ears all week and put into perspective much of my thoughts about the relationship/role of social networking in the Chinese net culture so dominated by BBS. More thoughts on this soon.

After this, I attended a talk on gaming and gaming culture led by Frank Yu from Microsoft, a very knowledgeable guy in the space. Discussions confirmed my belief that the Internet in China is an information medium, an entertainment medium as well as a social medium--in the end it is THE medium of life for those who use it, especially in Tier 1 and Tier 2 cities. Frank made the interesting observation that just as my generation of Americans remember watching the Brady Bunch on TV, the current generation will remember WOW, Freestyle etc.

At the event, I also had opportunities to meet some great people from IBM. It is clear in sponsoring this event and in the massive turnout they had that they are really supporting innovation and everything "web 2.0" in China.

All in all, good fun and good learning.

Paul Denlinger has a nice, provocative post on his blog called Wanted: A New Kind of Ad Agent Warrior

In it, he suggests that the "agency" industry is going through dramatic changes and requires a new kind of "warrior" savvy in the tools and the culture of the Internet:

That whole business model has been blown apart with the Internet, and ad agencies are adjusting to the changes. These changes are just starting, and will ripple out to affect other services as well.

Check it out, definitely interesting reading. I commented on it as did Kaiser, who republished it on Ogilvy Digital Watch.

Also worth reading: IBM's prediction of the massive changes in advertising.

As Michael Stipe sang back in 1987, it's the end of the (advertising) world as we know it...and I feel fine.

According to our Auto IWOM whitepaper findings, Ford Focus was mentioned in 3.5% of all auto BBS messages mentioning manufacturer brands or models during Q2. This comes out to almost 150,000 messages. Why should Ford care?

Here are some ideas that come to mind:

IWOM influences purchase decisions:

In an Automotive News China newsletter , AC Nielsen said that:

Shoppers make chat rooms their final stop before making a purchase decision. Philippe Coquelle, head of automotive research for Nielsen in China, calls it "a sort of disaster check.

A recent report released by TNS China suggests that(emphasis added by me):

China’s car buyers rely heavily on Internet content as a source of purchasing information, with more than 40% ranking the Internet as “extremely important” or “very important” in making a decision. The Internet is making the process of car purchasing increasingly transparent for China’s consumers -- in the same way it has done for car buyers in more developed car markets. Chinese consumers use the Internet extensively for pre-purchase information, and actively browse auto websites, read up on news about brands, compare prices or join web-based discussions.

From a very recent report released by i-merge and Sinomonitor, (see more here), 49% of respondents rate the Internet as the biggest influence when it comes to purchase decisions.

An even more recent report released by Netpop covering Chinese "broadband users" found that:

User-generated content (consumer reviews/rating sites, forum/discussion boards, blogs, etc.) influences 58% of all purchase decisions in China, compared with 19% in the US.

In case you are unconvinced that Chinese netizens are active in contributing to and spreading IWOM, Netpop also found that

47% of Chinese broadband users post comments to a blog, chat room, listserv or forum, compared with just 28% of American broadband users.

Unfortunately, there is very little detail about Netpop methodology or even company background, so as much as I do like these stats, I would take them with a grain of salt.

Netizens go to forums for post-purchase support

Again referring to the i-merge report, "91% of respondents listed the Internet as the preferred medium to stay informed post-purchase."

We see two angles around "staying informed"

First, there is "customer service" IWOM. Instead of only calling customer support or going to the official customer support website, netizens will seek out answers to problems/questions they have around products on BBS forums. Within 3rd party BBS sites, consumers can find brand specific forums where passionate fans of the product will help answer questions. We talked in great detail about these "answer people" staffing the unofficial "help desk" here.

Another angle to staying informed is social networking with other product owners. This is especially relevant for automobiles. We previously discussed "FB" phenomena here where car owners will organize offline gatherings online.

These tight knit groups do more than just socialize, however. They will keep each other informed of the latest news about the model. As we discuss in the white paper, IWOM culture "breeds" media of sharing detailed information with such phenomena as "homework" (see below).

(click image to enlarge it)

They will also notify each other of bad things, well before the manufacturer gets around to officially notifying them.

For example, in 2006, we found consumers talking about Focus oil pump problems months before Ford issued the official recall on October 17, 2006.(see below). These auto forums have some of the most informed, connected and passionate owners who will actively spread all the news about models (both good and bad).

The article below is taken from my first column post on the newly launched iMedia Connection Asia. Would love to hear your thoughts.

Many marketers tend to think of internet word of mouth (IWOM) on blogs and BBS (online message boards) in China as scary stuff. They may recall the Dell Processor Gate incident where consumers complained on BBS that Dell had shipped a different processor than what was advertised. This eventually led to a class action lawsuit for false advertising. Marketers may also think of the CCTV9 blogger Rui Chenggang's open letter to Starbucks, requesting the removal of one of its stores from the Forbidden City, which was later picked up by the Chinese media and even The Wall Street Journal. (Starbucks is out of the Forbidden City, by the way). While these examples demonstrate IWOM's power to make a big splash, it would be a mistake to relegate IWOM exclusively to reputation management.

IWOM is the window to a vibrant, dynamic net culture that is increasingly shaping and driving the Chinese popular culture that is essential for companies to understand if they are to understand consumers.

But where is a marketer to begin to understand? Well, there are numerous examples of "culture" online, but three of the most compelling and obvious ones are net stars, net language and net literature.

Net stars
Examples of these are the shameless Sister Lotus (a.k.a. Fu Rong Jie Jie) and the effervescent Back Dorm Boys, which first came onto the scene in 2005. Even up to today, they continue to be a part of the net culture. In fact, Sister Lotus has pretty much remained in China's leading search engine company Baidu's top 10 most searched people until recently.

More and more brands are taking notice of net stars and building relationships with them to get closer to netizens. Last year, Sony Ericsson picked up Sister Lotus' sweeter opposite, Sister Angel, as a poster girl for their Simple Happiness series of phones. Earlier this year, Acer tapped video blogger dodolook to host an online campaign emphasising built-in cameras in its notebook computers. Most recently, the Pepsi Creative Challenge II campaign buzz leapt when Sky, the famous e-athlete, became a top candidate in a contest to appear on Pepsi's new can.

Net language
In addition to celebrity, net culture has its own net language. Just as there are terms in English such as LOL for "laugh out loud," in Chinese, you have PMP for "pai mai pi" or kiss ass. Net language also extends to specific industries. For example, Motorola's E2 is called Little Rabbit, ("two" in English has a similar pronunciation as rabbit in Chinese. Estee Lauder's Illusionist mascara, which is packaged in a little, fat container, is called Little Fatty. These terms of endearment give brands a personality that is not easily bought and definitely memorable.

Moreover, nicknames can also have practical implications. In our analysis of automobile net language, for example, we found that over 50 percent of all references to Ford Focus refer not to its official name, but to its net language nicknames which include FKS and FCS. Search on Google or Baidu for FKS and you will find almost no brand sites in the top 10. Most results come from BBS and blog messages. This is clearly a missed SEM opportunity.

Net literature
If you check out Baidu's most searched books, you will find almost all are net literature, meaning, they are only published online. In fact, net literature has long been a mainstay of the online world and quite a few pieces have been turned into movies or TV dramas. In fact, the net novel "The First Intimate Meet" defined the genre when it became hot in the late 90s, and in 2000, it was turned into a movie. Other net fiction that has gone on to mainstream success include "Two Sided Tape", which was turned into a TV show in 2007 and most recently, "Ghost Blows the Light Out", to be released by New Line Cinema in 2008.

What we are seeing with the "net native" generation in China is that the internet has not only become a centre of information, it has become a centre of entertainment, with the net natives in charge of the programming. It's no secret that traditional entertainment channels in China are not very entertaining, so the net natives download Taiwanese and Korean dramas as well as American shows such as "Heroes", "Lost" or "Prison Break" (a.k.a. "PB" in China) onto their hard drives.

Walk into any Chinese homes in Tier two and Tier two cities and you will find that in many of them, the parents and grandparents will be watching TV programmes on TV, while the net natives will be watching TV from other countries on their computers. These same net natives are the ones creating their own media, including their own literature, their own language and even their own stars, which are all becoming a part of not just net culture, but Chinese popular culture. If marketers are able to tap into this world, they will be able to find pathways to learn from and about netizens. This not only allows them to gain consumers' attention but also become a meaningful part of their sphere.

A peasant hotel owner’s blogging turns his once struggling business into a profitable one. A PC expert who also sells PC’s offers real, practical advice to buyers on his blog and on community sites and now his business is booming. Alibaba launches a record IPO making it the 2nd most valuable Internet company in China.

What do all of these stories have in common? Social commerce. Social commerce is the process of buyers and sellers establishing credibility and relationships through online communication.

In China, the relationships that fuel commerce in so many ways are moving online. It’s a lesson that Alibaba’s Taobao leverages for its users in its massively active BBS forums filled with buyers seeking advice from sellers. Post Bar and Zhidao have brought similar traffic and trust to the Baidu platform. eBay unfortunately did not learn the power of community in China soon enough before it exited the market. Google, with its investment in Tianya and launch of Laiba may be a faster learner. There are surely lessons for Facebook and Myspace here as well.

Summary
In March, a 40 years old farmer used a blog (integrated with mini SNS and video post) to promote his hotel. In about 6 months, around 3,000 tourists went to his hotel (not a small number for this small hotel). This turned the several years' unprofitable situation to a 200,000RMB income. Now the hotel has its own website and the hostess plans to build more rooms for more tourists.

Sample Quote (link)
我们已经去过两次了,只因为好!真是一言难尽,我说什么都不管用,只要你体验了你就知道了!
We have been there twice only because it’s wonderful. Words cannot express. Only after you experience that, you will know.
我是9月去的您那!您合理的收费!热情的服务!合口的饭菜!还有让人挑话眼的娱乐项目!真是太好了!我庆幸自己去过!我更谢谢您们!
I went there in September. Your reasonable charges, warmhearted service, delicious food and nice entertainment are really very good! I’m happy that I have been there! Thank you very much!

Same as the hotel hostess, an offline PC seller built up a blog called “Lao Gao’s DIY Paradise”. He uses the blog and online community to share his professional information with others and sell PC related products. The professional information attracts many visitors to his blog. In less than 5 months, the total visits reached more than 160,000 and about 160 people registered on his website.

CIC View
More and more both consumers and individual sellers are realizing the importance and influence of IWOM. The success of these two common people largely rely on their good usage of IWOM and social media to promote their business and bring them lots of visitors. Therefore, while IWOM is offering more challenges, it also brings more commercial benefits.
If a company can use the social media and the IWOM carried out by their staffs or consumers properly, the promotion of its brand would be quicker and more efficient than any other traditional campaigns.

Below is a screen shot of the index for the full IWOM watch report

(click image to enlarge)

Other CIC IWOM Watch related posts that may be of interest:
CIC Watch Half-Year Review released (download the full report)
CIC watch: "You" - Time's Person of the Year - also lives in China (download the full report)

Here are a few random snippets related to IWOM I came across this week:

I like this pic from the Economist article discussing Facebook's announcement of its new internet word of mouth advertising program (I am cooking up ideas about this; will share soon). Nice title: "Word of Mouse" and nice pic of "conversational marketing."

Forbes has a nice article here showing Comcast, GSK and Toyota's approach to engaging with social media (in the US).

Blognation has a nice post outlining key issues around BBS forum culture here. See our post on net language here. Our Chinese blog has many more such posts (see links in first paragraph).

Finally, Netpop has some interesting stats about Chinese broadband users as reported by Marketing Charts:

*User-generated content (consumer reviews/rating sites, forum/discussion boards, blogs, etc.) influences 58% of all purchase decisions in China, compared with 19% in the US.

*47% of Chinese broadband users post comments to a blog, chat room, listserv or forum, compared with just 28% of American broadband users.

I will be speaking at the upcoming Nurturing & Commercializing Online Communities Forum.

Not surprisingly, I will speaking about IWOM, in particular, Understanding IWOM as a Strategic Element of Marketing Communications. Topics I will cover include:
- Community Conversations as Consumer Insight for Market Research
- Community Relationship and Participation as an Extension of Public Relations
- Community Engagement/Activation as Marketing

Drop me a mail on sam (at) cicdata.com if you are going and would like to meet up. Looks like a good line up of speakers.

I am happy to announce that we released our white paper on automobile IWOM in China today. We think this provides some very interesting data and perspectives that demonstrate why auto manufacturers should be listening and understanding IWOM.

Here are some of the highlights:

• Auto IWOM is massive: for Q2 period, we tracked 15,618,268 automobile related messages found on online message boards (BBS) written by 468,430 unique user names

• Chinese manufacturers dominate the buzz: Chery is the most talked about manufacturer by far and 7 out of the top 10 manufacturers are pure Chinese (not JV) manufacturers. See below for some of the things driving Chery buzz

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• Focus leads model buzz: For the 430 models tracked for this study, Ford Focus is the most talked. 3.5% of all messages mentioning models mention Focus

• Looks, power and price drive the buzz: Appearance, power system and price are the 3 most discussed attributes for all models

• Show and tell culture: Net culture within online communities encourages consumers to express their opinions and demonstrate their experience through “fubai” (腐败) and “homework” (作业)

• Gotta talk the talk: Net language is an essential part of online communities; over 50% of Focus mentions reference net nicknames like FKS instead of Focus’ official name. See previous article on auto net language and culture here.

See the the press release here.

You can download the paper here.

And my colleague James has published his wonderful posts of “You time”(here, here and here), we’d like to share you some concepts and glossaries that CIC we established or collected. Those have become part of CIC's language in work. If you are interested and new in IWOM research, hope those basic glossaries can help you get a start.

WOM: Abbreviation of “word of mouth”. Passing of information by verbal means, especially recommendations, but also general information, in an informal, person-to-person manner, rather than by mass media, advertising, organized publication, or traditional marketing. Word of mouth is typically considered as spoken communication, although web dialogue, such as blogs, BBS and emails are often now included in the definition.

IWOM: Abbreviation of “Internet Word of Mouth”. It stands for text and multimedia content related to companies, products or services shared by netizens, including brands and consumers, via online community platforms such as BBS (online message boards), blogs and video sites.

Buzz: Online discussion via online channels is considered as buzz. The word originates from the "sound" of lots of people talking (also, the sound that a bee makes)

Efluencer: All the consumers who are discussing brands, produces or services by posting content via online platforms like BBS, Blog and Video Sharing sites.

Online Opinion Leader: The most active efluencers who create, influence and participate.

E-community: E-community contains three key elements: platform, topics and members. platforms indicate the communicating platforms such as BBS, comments, blog, Wikipedia, Instant Messaging and so on. Community topics are the messages which can meet the special needs of the community members or arose their common interests so as to join the community activities. Community members are those who gather and live in the community. All these elements form the real culture and environment of E-community.

L-K-P™: Stand for Listen-Know-Participate framework. It is the model that CIC offers to clients while doing IWOM research. “Listen” means listening to netizens' feedback and advice . “Know” means understanding the communities and cultures. Participate means to participate in consumers' online conversation.

p.s. See the post content in Chinese at here.

We recently released our IWOM watch for October 1-15. I have started to write an intro to each report; you can see my first shot at this below.

At CIC, we often say that IWOM offers an opportunity to build relationships. We find plenty of support for this in this IWOM issue. For example, in its most recent campaign, SVW recognizes that different communities like QQ and MSN Live have different cultures with different types of relationships which ultimately require different approaches.

And as brands deepen their understanding of IWOM, we believe the opportunity to build relationships with consumers and stake holders will become more and more evident as well as a means to deepen these relationships.

(click image to enlarge)

Summary

SVW recently launched a campaign called “POLohas”, setting up official spaces on three Chinese famous community platforms MSN, MOP and QQ to connect with communities and spread the message. Based on different platforms’ features and unique community attributes, SVW uses different themes to match the core users’ taste. For example, the theme on MSN Live Space is targeting white-collar workers, while the theme on QQ focuses on a younger lifestyle. Space visitors can join in the campaign through submitting various types of contributions such as blog, picture, audio and video.

CIC View

Though it is still too early to tell if the campaign is successful, the campaign’s online media partner strategy is a good move since:
- Different online communities have different cultures and user bases, it is therefore necessary to adjust communication approaches so they are relevant to the users there (i.e. there is no "one size fits all" strategy for community marketing).
- It can be very buzz-helpful to form a partnership with various hot channels to spread the campaign message. These popular partners could serve as the “fuel” for brands’ messages in order to obtain greater online buzz coverage resulting in larger campaign impact.

Below is a screen shot of the index for the full IWOM watch report

(click image to enlarge)

Other CIC IWOM Watch related posts that may be of interest:
CIC Watch Half-Year Review released (download the full report)
CIC watch: "You" - Time's Person of the Year - also lives in China (download the full report)