CIC and Ogilvy PR joint white paper - 'Crisis Management in the Microblog Era'

Introduction The popularity of microblogging exploded onto the Chinese Internet scene in 2010. Since then netizens have become the media, able to produce, disseminate and consume messages at the same time. As an important social media and online platform for communication, microblogs have come to play a pivotal role in breaking and amplifying crises and scandals. Handling a microblog crisis appropriately and with compassion inspires public cooperation and confidence, while mismanagement often wreaks havoc on a brand’s image and can even lead to financial trouble. To analyze this relatively recent phenomenon, Ogilvy PR and CIC jointly released a white paper, “Crisis Management in the Microblog Era”, which explores how brands, companies and agencies can better understand and leverage social media platforms in times of crisis.© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era Crisis Management in the Microblog Era 2

Contents  Chapter I: Characteristics of Crises in the Microblog Era P4  Chapter II: Review of Major Crises in 2011 P8  Chapter III: Crisis Management Case Studies P16  Chapter IV: Implications and Recommendations P35© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era Crisis Management in the Microblog Era 3

Chapter I – Characteristics of Crises in the Microblog Era 1.1 Evolution of Crisis 2.0 1.2 Entering the Microblog Era 1.3 Crisis Characteristics in the Microblog Era© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era Crisis Management in the Microblog Era 4

1.1 Evolution of Crisis 2.0 Crisis 2.0 has developed alongside social media since 2004 IWOM (Internet word-of-mouth) has developed quickly alongside China’s thriving social media scene. Now more than ever Chinese netizens are able to freely discuss society, brands, products and their personal lives on the Internet. Meanwhile, netizens’ penchant for posting negative comments online - and the snowball effect that has on other netizens - brought Crisis 2.0 to the fore in a big way. Since 2004 BBS (Bulletin Board Service) has been an important online platform for breeding and escalating crises. In 2006 CIC released “CIC IWOM Watch,” which first introduced the term “crisis 2.0” and highlighted several brand crisis case studies (IWOM Watch Highlights from 2006 to 2010, Link). By 2011 CIC had defined “crisis 2.0” as a crisis generated or exacerbated by both media and netizens on social media platforms. Crisis Definition of IWOM IWOM, or Internet word-of-mouth, is text and multimedia content about companies, products or services shared by netizens, including brands and consumers, via online community platforms, such as BBS (online discussion forums), blogs, video sites, SNS and microblogs. IWOM can affect the credibility of a brand, product, service and even a company’s business.© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era 5

1.2 Entering the Microblog Era Microblogs have become the most crucial social media platform in crisis 2.0 History of Microblogs in China The Crucial Role of Microblogs in Crisis 2.0 In China microblogs were born during the social media boom in 2007. Microblogs have constructed an Internet ecosystem After the rise and fall of independent microblogs, the launch of Sina by producing, distributing and consuming information, Weibo microblog catapulted microblogs into the fast track during the establishing an “eco-circulation.” 2009 growth period. Since then microblogs have grown to be the most significant form of social media. According to a December 2011 Once a potential crisis enters the “eco-circulation,” CNNIC report, there are 250 million microblog users in China, a 297% negative information from all kinds of online platforms increase from 2010. are aggregated and amplified by microblogs. As traditional media start to use their own official microblog accounts, they also start to report on more crises online and netizens then often help to spread the news. The lines between online and offline crises are become increasingly blurred. *Source: CIC· Sina Co-branded Microblog White Paper, 2011 Link© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era

1.3 Key Crisis Characteristics in the Microblog Era Traditional Crises Crises in the Microblog Era Speed Spreads in hours, days, weeks Spreads in seconds and minutes Crises often erupt on microblogs and amplifies Channel Reported by print, broadcast and TV media interactively in new and traditional media Key Opinion Leaders (KOL) play an important role in pushing for change, while crisis stakeholders (victims, Traditional media plays a hugely important netizens, brands, media) exacerbate the crisis from multiple Role role in disseminating information, pushing for angles and channels. Ordinary netizens and online change and demanding answers influencers who sympathize with the victims help to spread the message further and faster. Vivid and multiple forms such as spoofs, videos, cartoons, Form Monotonous print, photos or TV coverage and re-enactments Personal and emotionally charged expressions have Tone Relatively neutral, objective, unbiased become an important driver in the spread of a crisis Rapid fire feedback; an inappropriate response may easily Feedback Difficult and slow to collect feedback trigger a second crisis, or aftershock© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era 7

Chapter II – Review of Major Crises in 2011 2.1 Top 10 Public Credibility Crises 2.2 Top 10 Personal Crises 2.3 Top 10 Brand Crises© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era Crisis Management in the Microblog Era 8

Classification of Crises in the Microblog Era Online crises were classified into three categories: • Public Credibility Crises focus on governments, non-governmental organizations and when there seems to be no apparent target • Personal Crises focus on individuals, particularly celebrities or corporate executives • Brand Crises focus on corporations, private enterprise and industry From the classifications above, we summarized and ranked the major online crises of 2011 based on trending topics on Sina Weibo and Tencent Weibo microblogs, Baidu’s 2011 top searches report and various media review reports. We conducted in-depth studies of the crises to determine their implications for crisis management in the microblog era. Public Credibility Crisis Brand Crisis Personal Crisis Brand© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era

2.1 Top 10 Public Credibility Crises 7 out of 10 crises originated from microblogs through disclosure or live broadcasting. The Wenzhou train crash was the most heavily reported by media while the Guo Meimei Red Cross scandal was the hottest topic on the microblogs. Microblog Microblog Crisis Month Role of Microblog Media Reports Media Ranking Posts Ranking Showed off luxury lifestyle while GUO Meimei Red Cross Jun identifying herself as a Red Cross staff on 8,421,468 73,200 1 2 scandal her verified microblog account Buzz was amplified by the constant Little Yue Yue run over by truck Nov discussion 6,905,024 37,294 2 6 First exposed on microblog s with Wenzhou train crash Jul constant live posts 4,570,324 104,000 3 1 Gansu Province kindergarten Amplified the buzz with constant Nov discussion 2,964,096 69,900 4 3 school bus accident First exposed on microblog s with Shanghai subway accident Sep constant updates 2,290,348 31,000 5 7 Beijing’s PM2.5 air pollution Dec First exposed on microblogs 1,056,828 20,500 6 9 Government official flirting Jun Posted live on microblogs 652,412 22,100 7 8 publicly on microblog Relics stolen from Forbidden City and opening of private May Exposed by staff through microblogs 521,804 38,600 8 5 luxury club CSDN Internet portal’s Amplified the buzz with constant Dec discussion 274,740 49,200 9 4 password leak Fake photo of Huili officials Jul Picture exposed on microblogs 146,264 15,280 10 10 Note: Data is from Jan 1 – Dec 31, 2011. Media reports refer to Baidu search engine’s results, microblog posts refer to the total number of posts on Sina and Tencent microblogs. Crises marked in orange mean that they originated from microblogs.© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era 10

Summary of Public Credibility Crises • All major public credibility crises in 2011 generated a huge amount of buzz online. More often than not, the microblogs were the original sources of the crises. • Crises spread faster and farther on microblogs than they do in traditional media. This means we must re-evaluate our approach to crisis preparedness and response. • Negative news can be posted online at anytime, from anywhere and by anyone, potentially increasing the damage that a crisis can cause. Luxury Private Club in the Wenzhou Train Crash Huili Officials’ Fake Photo Forbidden City© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era 11

2.2 Top 10 Personal Crises 6 out of 10 crises originated from microblogs as they became a public space where people could respond to and monitor others’ comments, especially those made by celebrities and corporate executives. Senior executives’ inappropriate comments can negatively impact their companies. Microblog Microblog Media Crisis Month Role of Microblog Media Reports Posts Ranking Ranking WANG Gongquan’s elopement May First exposed on microblog s with constant live posts 2,083,488 18,200 1 2 with his mistress LI Yang’s domestic violence First disclosed by LI Yang’s wife on microblog s with Sep constant posts 1,542,032 9,970 2 4 scandal LI Shuangjiang ‘s son’s beating Sep Amplified the buzz with constant discussion 1,274,492 8,030 3 6 Pan currency in real estate market Nov Started with PAN Shiyi’s post 497,180 3,050 4 8 GAO Xiaosong’s drunk driving May Amplified the buzz with constant discussion 375,144 20,600 5 1 LI Kaifu’s education in question Nov Started with FANG Zhouzi’s post 166,936 3,340 6 7 Quality and management of LUO Initiated through a microblog discussion between Dec 108,888 2,410 7 9 Yonghao’s English training school LUO Yonghao and FANG Zhouzi Criticism of CHEN Guangbiao’s lack Apr Amplified the buzz with constant discussion 26,046 9,930 8 5 of philanthropy ZHANG Chaoyang blogging Mar First exposed on microblogs with live posts 24,733 11,600 9 3 about celebrities’ private wedding Monk SHI Yongxin prostitution May Amplified the buzz with constant discussion 18,024 1,110 10 10 scandal Note: Data is from Jan 1 – Dec 31, 2011. Media reports refer to Baidu search engine’s results, microblog posts refer to the total number of posts on Sina and Tencent microblogs. Crises marked in orange mean that they originated from microblogs.© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era 12

Summary of Personal Crises • 6 out of 10 major personal crises in 2011 originated from microblogs. Interestingly in all 6 cases, corporate executives – and not celebrities - were the ones that came under fire. • Senior executives and corporate heads can trigger crises by posting inappropriate content or comments on their microblogs. • Personal crises can, and often do, tarnish the brand image of the executive’s company. Quality and Management WANG Gongquan’s Elopement LI Yangs Domestic of LUO Yonghao‘s with His Mistress Violence Scandal English Training School V.S.© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era 13

2.3 Top 10 Brand Crises 8 out of 10 microblog crises were also traditional crises. Of these, half impacted the FMCG industry. Famous brands with large numbers of consumers attract widespread attention. Media Microblog Crisis Month Crisis Month Role of Microblog Reports Posts DEPH-tainted sports drinks Shuanghui’s clenbuterol in pork Mar 73,800 May Triggered lots of buzz 1,499,140 from Taiwanese brands Da Vinci Furniture’s misleading Mengniu milk’s excessive Dec Triggered lots of buzz 903,952 claims about where its products Jul 71,900 levels of aflatoxin are made Shuanghui’s clenbuterol in Mar Triggered lots of buzz 632,160 pork Honda vehicle recalls Aug 46,900 Da Vinci Furniture’s false Jul Triggered lots of buzz 605,376 DEPH-tainted sports drinks importing May 44,500 from Taiwanese brands Siemens refrigerator door Started on microblogs with constant Sep 396,524 Kumho Tire quality Mar 32,600 problem updates Poisoning crime using Nov Triggered lots of buzz 318,956 Otis escalator accident Jul 26,400 Coca-Cola drink Ajisen noodle soup mix Jul 19,100 Kumho Tire quality Mar Triggered lots of buzz 277,356 Baidu bidding for higher ranking Baidu bidding for higher Aug 18,900 ranking scandal reported by Aug Triggered lots of buzz 243,308 scandal reported by CCTV CCTV Mengniu milk’s excessive levels Dec 16,400 of aflatoxin Johnson & Johnson baby Nov Triggered lots of buzz 169,916 shampoo carcinogens Johnson & Johnson baby Nov 12,400 shampoo carcinogens Otis escalator accident Jul Triggered lots of buzz 102,652 Note: Data is from Jan 1 – Dec 31, 2011. Media reports refer to Baidu search engine’s results, microblog posts refer to the total number of posts on Sina and Tencent microblogs. Crises marked in orange mean that they originated from microblogs.© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era 14

Summary of Brand Crises • Microblogs have become a source of brand crises. If highly influential key opinion leaders and media organizations use their microblog accounts to comment on crises, the news will spread far and wide, and fast. • Microblogs offer crisis instigators and defendants the opportunity to respond quickly. If defendants fail to react fast enough, and in a manner that satisfies netizens, this can easily trigger a subsequent crisis, or aftershock. Shuanghui’s Clenbuterol in Pork Kumho Tire quality Otis Escalator Accident© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era 15

Chapter III: Crisis Management Case Studies 3.1 DON’TS: Crises that could have been handled better • Guo Meimei & Red Cross • Da Vinci Furniture 3.2 DO’S: Cases to learn from • Durex Plagiarism • Shanghai Subway Accident • KFC Recycled Oil • Pan Shiyi Currency© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era Crisis Management in the Microblog Era 16

3.1 Crisis Don’ts Cases • Guo Meimei / Red Cross Crisis • Da Vinci Furniture - Manufacturing Origin© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era Crisis Management in the Microblog Era 17

Guo Meimei - Red Cross Crisis TIMELINE • 20 Jun: Guo Meimei flaunts her life of luxury on her Sina Weibo account where she is identified as a verified general manager of China Red Cross Association Commerce Company. Her posts set off a tidal wave of responses about charity corruption in China. • 22 Jun: A Red Cross senior administrator responds on Sina Weibo to say that Guo Meimei is an actress link. This contradicted with Guo Meimei’s online apology and escalated the crisis. • 24 Jun: Three branches of the Red Cross argue that Guo Meimei is in no way related to their organization. link • 26 Jun: Guo Meimei apologizes through three cursory posts on Sina Weibo but the public rejects her apology link • 1 Jul: Red Cross claims to have suspended the Commerce Company. link • 4 Jul: Red Cross posts a long explanation on its Sina Weibo account. Netizens respond with harsh criticism. link • 24 Jul: Red Cross says it will make a RMB 300,000 donation to the Wenzhou train accident. link • 3 Aug: Netizens question Lang Xianping’s interview with Guo Meimei. Lang is also criticized. • 17 Aug: The China-Africa Hope Project case reignites discussion of the Guo Meimei scandal and online buzz spikes again. Unit: 1 microblog post GUO Meimei-Red Cross Buzz Trend on Microblog, Jun 20 – Aug 20, 2011 140,000 Stage I: Peak Stage II: Aftereffect, many mentions of the event for various reasons 120,000 Netizens poked Interview Other news 100,000 Buzz about fun at small with Lang brought on donation 80,000 donation fund, it discussion 60,000 is just enough to about Guo buy Guo a bag again. 40,000 20,000 0 提及“郭美美”的微博趋势提及“红十字”的微博趋势 Guo;s reply Red Cross’s reply*Source: CIC IWOM Data Panel, Jun 20 – Aug 20, 2011. 3,372,081 related posts and re-posts on Sina Weibo microblog.© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era 18

“Shai” Net Culture and “Human Flesh Search” spark online fires “Shai” culture erupts in crisis “Human Flesh Search” Intensifies Crisis In the Web 2.0 age, netizens flaunt their appearance and After the “South China Tiger” event, the human flesh possessions online through pictures and videos, and they also search engine became one of the hottest topics on the share their likes and dislikes. In Chinese net culture this is internet. In this instance, the human flesh search shifted referred to as “Shai”. the public’s anger from Guo Meimei to the Red Cross. Guo Meimei’s “shai” of her luxurious lifestyle on microblogs touched on a sensitive nerve of the public, sparking a heated Stakeholder Relationship Map, as drawn by netizens debate about the issue of corruption in philanthropy in China. Car Shai 1* Source: CIC· GroupM 2011 Luxury White Paper, August 2011, Page 2link© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era 19

Microblog mentions by KOLs dramatically increased the reach of the crisis 22 June: Red Cross’s first reply, 26 June: Caijing Web 1 July: Headline News microblogged by DingshuoRC, microblogged CCTV report about microblogged Red Cross’ the head of Policy and Regulation Guo Meimei. Close to half of the suspension announcement. One- Division. Posts by KOLs such as reposts were instigated by 3 third of the reposts were direct Neweekly, Honghuangilook and KOLs including PAN Shiyi, REN results of posts by 3 KOLs: PAN Lao Chen were reposted several Zhiqiang and RUI Chenggang. Shiyi, LIU Chun and REN times. link link Zhiqiang. link Caijing Web Headline Honghuangilook Lao Chen Pan Shiyi Ren Pan Shiyi Liu Chun Zhiqiang Neweekly DingshuoRC Chen Zhiwu Rui Chenggang Ren Zhiqiang Source: CIC IWOM Data Panel. Each dot represents one microblog user that reposted. Each line segment represents a repost. The three charts above depict 3,962, 8,529 and 5,005 reposts respectively.© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era 20

Cursory announcements from various PR channels created an aftershock crisis on the microblogs Contradictory microblog posts The cursory apology led to a second evoked doubts round of criticism on microblogs My company briefly worked with the Red 郭美美baby Cross Commerce Company. I am sorry for the Rui Chenggang Caijing Web misunderstanding caused by abbreviating the name of the company. (This post has since been deleted). Wenyi Microblog user @郭美美baby was previously verified as the actress, but she applied to change her title to Pan Shiyi General Manager, Red Cross Commerce Company, a GUO Meimeibaby change that was an error due to Sina’s inaccurate authentication process. Please accept our apology to the Red Cross team and Sina Weibo users. We will Ren Zhiqiang better regulate the verification process and welcome your support and feedback. link Microblog secretary Source: CIC IWOM Data Panel. Each dot represents a micrblog user who participated in a repost. Each line represents a repost. The database contains 86,104 reposts in the graph above.© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era 21

Da Vinci Furniture Manufacturing Origin TIMELINE • 10 July: CCTV program Weekly Quality Report claims that Da Vinci Furniture is not made in Italy as claimed, but is in fact manufactured in Guangdong province, a claim that starts the crisis. The Da Vinci story was then posted on microblogs by many influential media. link • 11 July : Da Vinci responds to say that it will hold a press conference that week to address the rumor (This post has since been deleted). • 13 July : At the press conference the Da Vinci CEO cried and she was accused of shedding crocodile tears for a publicity stunt. • 14 July : Da Vinci buyers’ microblog posts and retweets by influential media convinces the public that Da Vinci did lie about where its products are manufactured link • 18 July : Da Vinci posts an online apology to its customers (This post has since been deleted). • 22 July : Da Vinci publishes a 63-page apology to its customers. • 3 Aug: Da Vinci tries to interact with netizens online, but receives limited retweets. • 31 Dec: Media report that the Da Vinci scandal was misrepresented on microblogs. link Unit: 1 microblog post/retweet Da Vinci Case Buzz Trend on Microblog, Jul 10 – Aug 20, 2011 Stage I: Peak Stage II: Wenzhou train Stage III: News release issued by Da Stage IV: Other 90,000 accident attracts the attention Vinci has little influence, the case is event triggers 80,000 Buzz on their PR of Internet users, focus on Da fading netizens’ minds crisis again 70,000 failure Vinci decreases Xiaomi 60,000 50,000 mobile Da Vinci’s Apology issued marketing 40,000 first 30,000 response Public apology 20,000 Public letter to Press to customers media 10,000 conference 0*Source: CIC IWOM DATA Panel, from Jul 10 – Aug 20, 2011, 600,830 related posts and reposts in total on Sina Weibo microblog.© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era 22

Media posts on microblogs generated a second buzz spike • According to research by • Jul 11: DaVinci posts its first public • Jul 14: Sina Comment posted a CCTV, Sina Finance exposed response on its official Sina Weibo People’s Daily article about the Da the Da Vinci scandal, microblog account. (The original Vinci crisis. link generating more than 5,000 repost has since been deleted). tweets of the news. link Sina Xuemanzi Finance DaVinci Lian yue Sina Finance Sina Headline Headline comment Honghuangilook Posts: 5,128 Posts: 5,166 Posts: 2,970 Comments: 1,116 Comments: 3,863 Comments: 1,038 Source: CIC IWOM Data Panel. Each dot represents a microblog user that tweeted something about the scandal. Each line represents one re-tweet. The database contains 5,128; 5,166 and 2,970 reposts for the three pictures above (from left to right).© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era 23

Insufficient counter evidence and poor communication worsen the crisis Jul 11, 2011 1st response Netizens’ Attitude (original post has Da Vinci claims that the furniture they sold in since been deleted) Beginning of the crisis China were all imported, but opponents reach Pay attention 49.78% 48.74%, and supporters comprise only 1.48% People who doubt Da Vinci 61% Support CCTV 48.74% People who trust Da Vinci 6% Support Dvinci 1.48% Source: CIC IWOM Data Panel，3,863 reposted and surveyed. Jul 13, 2011 2nd response Netizens’ recognition of furniture as fakes and Do you believe the case is true? link Netizens voted on Sina Weibo microblog anger at the company’s attitude in their first Do not care 13.89% on Jul 11, 2011 link public response leads to a public outcry over the Do not believe 64.71% CEO shedding crocodile tears a the press Believe 21.40% conference. Percentage of skeptics jumps to 64.71%. Source: Sina Weibo Survey Results，785 votes. Jul 18, 2011 3rd response Users’ Attitudes to Case (original Da Vinci changes its tone and publicly post has since been deleted) apologizes on microblogs but fails to admit that Pay attention 26.40% the furniture is fake. Only 1.3% of netizens Complain and… 72.30% praised the response and 72.3% still blamed the company and become increasingly frustrated. Be responsible 1.30% Source：CIC IWOM Data Panel，1,170 posts. Jul 22, 2011 4th response Da Vinci issues a 63-page apology that was not very reader-friendly. Fewer than 200 microblog re- tweetsin total. (The original post has since been deleted).© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era 24

Comments from KOLs and media drive public opinion KOLs’ ideas drive public opinion Key KOLs Disagree on “Overall State of the Industry” Reposts • Da Vinci Furniture publicly apologized KOL Comments Tone Generated and accepted government supervision, an 新浪财经 308 • No comment neutral internal investigation and agree to being • Da Vinci deleted the post admitting to the fake furniture. Such an held accountable by the public and media. apology shows no sincerity. They avoided answering the question 马光远 96 even though it’s been verified. They also avoided all microblog negative • The top 10 KOLs generated 48.19% of total comments. With this low level of PR, it’s hard for them to escape from a crisis. re-tweets about the incident. 今夜秋光灿烂 54 • Apology comes too late negative • 7 in 10 KOLs’ comments about the case 每周质量报告 51 • No comment neutral were negative, while more than 50% of 新浪家居 37 • Da Vinci’s public apology neutral microblog posts were negative. • Second apology from Da Vinci, where they’re asked why they’re not mentioning the refunds. Da Vinci apologized on Sina Weibo on 中国经营报 36 the 18th, the second public apology to their customers. But they negative Attitude of Microblog Users failed to mention the customer refunds so their sincerity is largely in doubt. http://t.cn/aWJRKw Take responsibility, 1.30% 肖勇设计 23 • Too late negative Angry and complain, • Apology and resignation – two necessary steps when facing a 52.10% scandal. Do it earlier to be more positive, but it’s a bit late for 毛振华 21 negative Da Vinci from a cover-up to an apology. Pay attention //@新浪财经:转发微博 46.60% • When I read the news in the morning, they said they will not 月月熊 14 negative refund. • To be honest, this is just a PR failure. Sure people can afford Source: CIC IWOM Data Panel，1,353 东方卫视 13 the prices, but I don’t really care. negative posts in total.© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era 25

3.2 Effective PR Cases • Durex Plagiarism • Shanghai Subway Accident • KFC Recycled Oil • The Pan Currency© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era Crisis Management in the Microblog Era 26

Durex Plagiarism Case TIMELINE • Sept 21 at 8:22: Durex’s official microblog account posts. link • Sept 21 at 12:00: Popular blogger and microblog KOL 辣笔小球 claims that Durex’s official microblog copied his original work. link Later, he posts on microblog that he’ll sue Durex for plagiarism. • Sept 21 at 13:15: Durex apologizes on its microblog to the writer and promises to send him Durex products as a gift, enough for three years’ use. link • Sept 21 at 16:42: 辣笔小球 appoints lawyer Guoxu and indicts Durex on the microblog. link • Sept 21 at 9:41: Durex says that it will fulfill its promise of sending 100 boxes of condoms (containing 100 pieces each box) to 辣笔小球 and an extra 100 boxes to other netizens. Link • Sept 21 at 16:00: 辣笔小球 posted that they settled out-of-court and sends 200 boxes of Durex condoms to netizens as a gift. link Durex Case Buzz Trend on Microblog, Sep 20 - 25, 2011 Unit: post/repost 3,200 2,800 Stage I: Doubt on microblog causes crisis Stage II: Crisis resolved, good marketing 2,400 2,000 1,600 1,200 Plagiarizing accusation 800 Durex’s apology and marketing 400 - 25th September 24th September 23rd September 22nd September 21st September 20th September Response to Durex event Durex voice* Source: CIC IWOM DATA Panel, Sept 20 - 25, 3,089 posts and reposts in total, 13,532 posts by Durex on Sina Weibo microblog.© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era 27

Quick PR response with a positive outcome and unique brand image Durex cleverly inserted their brand identity into their response and created a fun discussion topic with phrases like, “enough for three years’ use” and “a piece for a day,” which drew the negative attention away from the crisis . 1st Day Apology from Durex Typical Microblog Users’ Responses Declaration: @辣笔小球 is the original author of this post, and it’s our mistake for not clearly citing that. We’d like to apologize to @辣笔小球. To express Sep 24 at 23:22 our sincere apology, we’re giving a gift to @辣笔小 Compared to state-owned enterprises, Durex is 球 that’s enough for three years’ use. Sincere much better! thanks to our fans’ support and the author’s original post. link Sep 23 at 11:14 I really admire Durex’s attitude toward the crisis. 2nd Day Apology from Durex Peace is prized. After consulting with @辣笔小 Sep 22 at 19:07 球’s lawyer, the settlement is as follows. Best A microblog lawsuit turned out to be microblog wishes to labixiaoqiu and his girl and all will be marketing. well. Fulfilling our promise, this is a piece for each day. We sent him 100 boxes (each Sep 22 at 17:18 containing 12 pieces of Durex Fetherlite) and This is nice, as is the publicity. I’m sure Durex made an extra 100 boxes to our netizens. link money from this.© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era 28

Shanghai Subway Accident TIMELINE • Sep 27 at 14:10: Line 10 accident happens. • Sep 27 at 14:17: Shanghai subway posted that operations are slow due to technical difficulties, train wait times will be longer than usual. link • Sep 27 at 14:40: Within 30 minutes two apologies were publicly posted about their dealing with the accident’s aftermath. link • Sep 27 at 15:05: Shanghai subway reminds commuters to rearrange their travel. link • Sep 27 at 15:17: Only an hour after the accident, Shanghai Subway suspends line 10. link • Sep 27 at 15:23: Shanghai subway posts updates on the accident on Sina Weibo microblog. link link • Sep 27 at 16:03: Shanghai subway claims that all the injured have been sent to the hospital. link • Sep 27 at 19:11: Shanghai subway posts that all its subway lines are now back in full operation. link • Sep 27: Shanghai subway publishes investigation results on Sina Weibo microblog and 12 people responsible have been punished. link Shanghai Subway Accident Buzz Trend on Microblog, Sep 27 – Oct 11, 2011 Unit: post/repost 120,000 Stage I: Accident happened, quick crisis management followed Stage II: Investigation results published, 100,000 online buzz decreased Buzz about the event 80,000 60,000 Investigation results raise 40,000 discussions 20,000 0 27/Sep 28/Sep 29/Sep 30/Sep 1/Oct 2/Oct 3/Oct 4/Oct 5/Oct 6/Oct 7/Oct 8/Oct 9/Oct 10/Oct 11/Oct* Source:CIC IWOM DATA Panel, from Sep 27 – Oct 11, 2011, 169,491 relevant posts and reposts in total on Sina Weibo microblog.© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era 29

Acknowledge various stakeholders and using a comforting and compassionate tone are important in accident management Two Hottest Posts of the Day 【Sorry again】 Today is the darkest day for the Shanghai Subway Microblog Accident map posted on Shanghai subway, regardless of what caused the Posts, Sep 27, 2011 accident or who’s responsible. We regret the pain microblogs caused to passengers. We look to improve, and while an apology can’t undo the damage, we’d like to apologize 11 10 again. link Reposts: 23,270 Comments: 9,953 2 2 【Preliminary investigation 】 At about 14:00 today, we discovered the equipment malfunction at line 10’s Xintiandi station. From Communication University to Nanjing East Road, mobile communication was disrupted and the train was running at a slower speed. At 14:51, two trains from Yuyuan to Laoximen rear- Source: CIC IWOM Data Panel, 27 posts in total. ended each other. Nine stops between Hongqiao Road Station to Tiantong Road Station are temporarily blocked and the other lines are operating in both directions. Reposts: 15,285 Comments: 3,327© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era 30

KFC Recycled Oil Case TIMELINE • Aug 8: Many media accounts posted the investigation results by Securities Daily on Sina Weibo microblog. link • Aug 8 at 18:56: KFC posted an official response on Sina Weibo microblog. link • Aug 8 in the evening: Other Sina Weibo microbloggers reposted KFC’s response. link • Aug 9: The Industry and Commerce Administration and health sector inspected KFC restaurants and the video has been uploaded online, generating lots of buzz. Link However, a lack of updates did not keep up the buzz for long. • Aug 17: Some media accounts begin to report that KFC oil will not be changed within the next 7 days, this update results in small buzz spikes, but the influence is contained. Link • Aug 26: Donggan 101 mentions the KFC case, which has been published on microblogs by netizens. It generated small peaks of online buzz but the influence was still limited in its reach. link KFC Case Buzz Trend on Microblog, Aug 7 - 28, 2011 Unit: post/repost KFC response Stage I: Peak Stage II: Crisis aftermath, event fades in netizens’ minds 14,000 12,000 Investigation 10,000 video 8,000 generates 6,000 discussion Limited influence 4,000 KFC of media reports 2,000 response 0 7/Aug 8/Aug 9/Aug 10/Aug 11/Aug 12/Aug 13/Aug 14/Aug 15/Aug 16/Aug 17/Aug 18/Aug 19/Aug 20/Aug 21/Aug 22/Aug 23/Aug 24/Aug 25/Aug 26/Aug 27/Aug 28/Aug* Source: CIC IWOM DATA Panel, from Aug 7 – 28, 2011, 29,313 relevant posts and reposts on Sina Weibo microblog.© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era 31

Timely, genuine and reasonable official responses as well as fan support are helpful in crisis management Aug 8: Media accounts post about the KFC oil case Aug 8 evening: After KFC published its explanation, on Sina Weibo microblog, more than 65% of netizens netizens and staff expressed their support for the brand. show their disdain for KFC. (The original post has link since been deleted). KFC’s Official Response • KFC responded quickly and appropriately to the crisis. • Spoke in a heartfelt and sincere tone. Attitudes of Online Responses Attitudes of Online Responses Unrelated discussion Supportive • Gave analysis based on Supportive 14.30% 8.60% Unrelated facts and figures. 23.60% discussion 26.50% Pay attention, 11.80% Resistant, Resistant, 65.30% Pay attention, 15.60% 34.30% Source：CIC IWOM Data Panel，Graphs above are based on 4,229 and 1,678 microblog posts.© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era 32

Pan Currency Case TIMELINE • Oct 6: Steve Jobs passed away. PAN Shiyi posted on his Sina Weibo that if Apple decreased the prices of its products to under RMB 1,000, more people would use Apple products and it would be the best way to commemorate Steve Jobs’ life. (The original post has since been deleted). • Oct 6 at 21:25: Pan expresses his understanding and that he’s also an Apple fan. link • Oct 14: Pan’s company Sina Weibo account posts that it hasn’t been in the real estate industry in recent years, so it’s difficult for PAN to comment on high house prices. link • Later, Apple fans’ anger appeased. Discussion turns to high housing prices instead. • Oct 25: Pan decides to design a set of Pan currency. link • Oct 26: Pan shows his PAN currency design on Sina Weibo microblog. (The original post has since been deleted). • Nov 9: Pan publishes a second edition of his currency design and asks for public opinion online. link • After an interview with CCTV, Pan says that he will not launch his currency. Pan currency has become linked to his company’s image. link The Pan Currency Case Buzz Trend on Microblog, Oct 6 – Nov 13, 2011 Unit: post/repost Stage I: Public anger, Stage II: Pan’s official Sina Weibo Stage III: Marketing takes advantage of Pan currency issue 100,000 jokes, then appeased account understands the claim but Pan published first by understanding denies request 80,000 edition of Pan Pan published SOHO official Sina Weibo currency second edition of Pan 60,000 Crisis started account publishes Pan’s currency 40,000 by Pan’s joke video of showing understanding 20,000 0* Source: CIC IWOM Data Panel, from Oct 6 – Nov 13, 2011, 347,448 relevant posts and reposts on Sina Weibo microblog.© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era 33

Reacting to netizens’ compaints about high housing prices led to marketing of Pan’s own currency Oct 6: Pan appeased Apple fans on Posts appeased Sina Weibo microblog link Understanding Netizens’ Emotions Apple fans, honored unrelated 1.94% Steve Jobs and won Discussion of the Pan currency led to home prices 57.54% fan support netizens’ complaints of China’s high criticize 10.98% housing prices. link Pan turned this 29.54% understanding 29.54% potential PR crisis around into self- mockery, which netizens loved. Oct 14: Pan appease fans with a video posted on Sina Weibo microblog link Pan’s video posted on unrelated 1.68% Sina Weibo microblog Self-mockery and Marketing home prices 50.13% won him fan support criticize 3.42% Pan said he would design his 44.77% praise 44.77% currency based on netizens’ suggestions. link This post received more than 4,000 reposts and 2,400 comments. Pan and his company have been linked many Netizens admired Oct 25: Pan publicizes Pan currency link times to other positive Pan’s ability to laugh unrelated … 2.25% comments. ’link at himself home prices 29.88% Two Editions of the 64.35% criticize 3.52% Pan Currency praise 64.35%© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era 34

Chapter IV - Implications and Recommendations 4.1 Summary and Implications 4.2 Crisis Management Framework in the Microblog Era© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era Crisis Management in the Microblog Era 35

4.1 Summary and Recommendations 1. Routine IWOM monitoring is vital to crisis management in the microblog era. 2. Establish and align a brand’s values with its own media assets (e.g. official website or official social media account). 3. Maintain a good relationship with key KOLs and media accounts on microblogs. 4. Understand netizens’ emotional moods, complaints or concerns. This is the foundation to crafting the right message and communications approach by striking the right tone. 5. A clear, consistent and concise PR response is a winning strategy for communications via microblogs.© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era 36

“You cannot always control what might happen to you, but you can control how you deal with it…. And, in the end, that’s what matters.” Kurt P. Stocker Northwestern University© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era 37

4.2 Crisis Management Framework in the Microblog Era 3C’s Principle of Crisis Management is Still Relevant Care Show that the company cares about the public’s interests or problems Crisis Communication Control Consolidate communication Respond quickly to channels to ensure timely and maintain some control of accurate communication the crisis development© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era 38

4.2 Crisis Management Framework in the Microblog Era The Changes We Must Make 1. Establish a crisis monitoring mechanism to listen to IWOM buzz. Tracking online buzz helps to identify sources of negative comments more quickly so that a response can be made quickly and hopefully before a crisis erupts. Regular monitoring also helps brands to better understand online culture and to be aware of shifts in netizens’ attitudes and behaviors. Preparation 2. Companies should establish their own official communications channels on the Internet. These include official websites, official microblog accounts and/or a blog to maintain lines of communication with its stakeholders and the public. Learn how to communicate with the proper style and tone for your audience. 3. Set guidelines for how staff should engage on social media if their identities are linked to the company. 4. Build healthy, interactive relationships with key media and KOLs’ online accounts. 1. React quickly, compassionately and appropriately through words and actions. Be sure to have a thorough understanding of the problem at hand and to follow through on promises with action. 2. Understand netizens’ emotional moods, concerns or complaints. Response 3. Pay special attention to KOLs’ comments and feedback. 4. Integrate lines of communication with new technology. 5. Monitor and integrate junior staff’s comments on social media. Their comments can be influential in times of crisis. 1. Clearly show the new direction the company is taking, including new rules, regulations and processes, that would guarantee that the same thing won’t happen again. Recovery 2. Analyze the crisis and improve the company’s internal crisis management protocol so that the company can better leverage various social media platforms.© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era 39

“…(in the connected age) … the public face of business has changed forever and corporations who fail to recognize this will risk having their reputations, often lovingly built up over generations, damaged in an instant.” Sir Martin Sorrell CEO, WPP© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era 40

About Ogilvy PR Ogilvy Public Relations Worldwide (www.ogilvypr.com) is an integrated global marketing communications firm, with offices in more than 70 cities around the world. We blend proven PR methodologies with cutting edge digital innovations to craft strategic programs that give clients winning and measurable results. In its 28th year, Ogilvy PR provides strategic public relations counsel to a variety of clients across its 360 degree digital influence, consumer marketing, corporate, healthcare, technology, public affairs and social marketing practices. The agency also offers biotechnology and government affairs expertise through its subsidiaries Feinstein Kean Healthcare and Ogilvy Government Relations, respectively. Ogilvy PR is a WPP company (NASDAQ: WPPGY, www.wpp.com) one of the worlds largest communications services organizations.© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era Crisis Management in the Microblog Era 41

About CIC CIC is Chinas leading social business intelligence provider. CIC enables businesses to fully leverage the power of social media and (Internet Word of Mouth) IWOM intelligence across the organization. Since coining the term IWOM in 2004, CIC has pioneered the industry to help companies meet their social media marketing and social business needs by providing customized research, consulting services, syndicated reports, as well as technical solutions and platforms all via an objective, third party perspective. In addition to helping companies leverage social media intelligence for more informed decisions, CIC is monetizing the social business industry in China by creating an integrated social business support system. CIC has strong, long term retainer relationships with leading multinational agencies and Fortune 500 companies. To view more, please visit www.ciccorporate.com.© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era Crisis Management in the Microblog Era 42

Disclaimer This study is the sole and exclusive property of Ogilvy PR and CIC. Any usage of the research and contents of the report or slides will be deemed a violation of Ogilvy PR and CIC’s intellectual property. Ogilvy PR and CIC reserve the right to legal action to protect its ownership rights.© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era Crisis Management in the Microblog Era 43

Contact us Contact us Sina Weibo @奥美中国 Sina Weibo @seeisee Twitter @Ogilvychina Robin Gu Michael Chu Senior Account Director, Research and Managing Partner, OgilvyPR Shanghai Consulting, CIC 8621-2405-1608 8610-5908-0268 ext. 608 Michael.Chu@ogilvy.com Robin@cicdata.com© 2012 Ogilvy PR • CIC Crisis Management in the Microblog Era

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CIC and Ogilvy PR joint white paper - 'Crisis Management in the Microblog Era'

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CIC and Ogilvy PR joint white paper - ’Crisis Management in the Microblog Era’ — Presentation Transcript