Guest post from Alex Geertz, who attended the Fifth China Branding Roundtable in Beijing on September 18 and 19.

Friday’s conference closed with a panel on new media and addressed the question of whether or not brands can “afford to stay out.” CIC’s Sam Flemming presented alongside McKinsey and Nokia, exploring the question of what new media really means for brands in China. Vinay Dixit, Senior Director Asia Consumer Centres, McKinsey & Company presented findings from a recent consumer study from McKinsey’s Insights China, which found that from 2007 to 2008 Word of Mouth (WOM) remained the highest quality media source based on credibility and level of engagement. Interestingly, consumer perception of IWOM including blogs and BBS jumped 94% from 2007 to 2008, making it the second most trusted media channel. This rise shows the growing influence of IWOM as a “new” and important media.

According to Sam, social media, which he defines as consumer created content found on BBS, blogs and online video sites, is more than just the “scary stuff” often highlighted in the media (see here for example). In reality, in social media you can find significant amounts of “real people, real talk, real community” and which represents an opportunity for brands to both gain consumer insight as well as listen to, react to and participate in this new media (see case study here).

In an earlier panel on below-the-line marketing panel, Cesar Jarmillo from P&G echoed this sentiment in characterizing the environment for advertising and marketing as moving from a “telling and selling” structure to a much more complex environment in which brands must build relationships with consumers. New media provides this opportunity. He believes brands must be experiential, generous and authentic to succeed in the changing environment. (For some examples, see here)

Mckinsey’s Vinay argues that to leverage social media requires art, craft and science. Art, as social media provides unprecedented opportunities for innovation and creativity in collaboration between brands and consumers; craft, as brands have flexibility in the presentation style, user experience and multiple channels through which they can deliver information to consumers; and finally, science, as social media requires a systematic method for tracking.

So getting back to the original question, “can brands afford to stay out of new media?” Nokia’s Dan Wong doesn’t think so. With the emergence of new media, companies today need a change of mindset, organization, hiring, management, and in some cases even a complete change of business model. In a changing market, where competitors from other industries such as Apple, Google and Garmin, are entering the mobile phone market, Dan Wong explained how Nokia has chosen to not only acquired the tools to adapt to social media but has decided to completely change its focus from a strictly hardware company to a supplier of both hardware and software.

Sam mentioned that he saw the shift in companies making structural changes within marketing communications. In the US, according to Indeed.com, there is a sharp rise in jobs listing “social media” in the job description (see here for more on this trend).

The change is happening in China as well, with 3 of CIC’s clients hiring social media managers to work with social media vendors such as CIC as well as to develop relationship with social media.

From listening to the speakers at the conference, it seems that it’s no longer a matter of “if,” but rather a matter of “when” and “how” brands will adjust to new media in order to leverage its enormous potential.