Report Period: January – June, 2008 CIC Contact: [email_address] IWOM watch Half Year Review - An Overview of Chinese IWOM trends from January-June, 2008

I am proud to present some key highlights from our IWOM watch reports, issued during the first half of 2008. We organized the highlights according to several themes that emerged. First we see “The Power of Connection.” The first several months, especially with issues around the Olympic torch and the Sichuan earthquake, demonstrated the impact of an increasingly networked society. In “Icons of Net Culture,” we see that in addition to a unique language, netizens have their own symbols and artifacts such as 囧 (Jiong) that can impact fashion and art. Finally, net culture and platforms continue to provide creative venues and outlets for brands to connect with consumers, including offline meetups. CIC is the first Internet Word of Mouth (IWOM) research and consulting firm in China. We have pioneered the industry in China, coining the term IWOM to describe the growing trend of consumers and corporate “netizens” engaging in conversations on the Internet. As an early witness to this trend, we are dedicated to listening to and understanding the development of Chinese online culture. You can get a sense of the development of IWOM over time by downloading previous IWOM watch 6 month review reports here . I hope you find the reports interesting and useful. Editorial Summary Sam Flemming, CEO of CIC

I am proud to present some key highlights from our IWOM watch reports, issued during the first half of 2008. We organized the highlights according to several themes that emerged.

First we see “The Power of Connection.” The first several months, especially with issues around the Olympic torch and the Sichuan earthquake, demonstrated the impact of an increasingly networked society. In “Icons of Net Culture,” we see that in addition to a unique language, netizens have their own symbols and artifacts such as 囧 (Jiong) that can impact fashion and art. Finally, net culture and platforms continue to provide creative venues and outlets for brands to connect with consumers, including offline meetups.

CIC is the first Internet Word of Mouth (IWOM) research and consulting firm in China. We have pioneered the industry in China, coining the term IWOM to describe the growing trend of consumers and corporate “netizens” engaging in conversations on the Internet. As an early witness to this trend, we are dedicated to listening to and understanding the development of Chinese online culture.

You can get a sense of the development of IWOM over time by downloading previous IWOM watch 6 month review reports here . I hope you find the reports interesting and useful.

Content Part One: The Power of Connection - “Peoplepower Search Engine” : Gathering the power of netizens - Internet and IWOM helped unite Chinese citizens at home and abroad in the aftermath of the Sichuan earthquake - BBS helps a college student direct a military rescue - Social media became the collective platform for prayer and hope - Internet application created to facilitate rescue efforts in Sichuan - Love China initiative on instant messenger brought Chinese netizens together - WOM Watch Special Edition: Internet and IWOM shape the Sichuan Earthquake aftermath

- Chinese Character Icon: leads a new wave of net culture - Cartoon Icon: becomes an important part of net culture - Nickname Icon: branding the product with netizen well-known content - Ke Icon: utilize and inspire popular consumer online behavior - Brands utilize microblogging to interact with consumers - Brands use online real time chat to connect with consumers - Brands leverage video sharing site for brand/campaign promotion - Offline Meetups: Popular net culture extends to the real life Content Part Two: The Icons of Net Culture Part Three: Brands Finding New Channels to “Participate”

The Power of Connection The Internet has always been social in China and has provided a platform for people to form spontaneous connections with one another. “Peoplepower search engine” is a powerful example of netizens utilizing the influence of IWOM to not only connect with one another but to work together to solve individual problems. Netizens have also leveraged the power of IWOM to unify and gather support for the victims of the Wenchuan earthquake on a massive scale. The Internet and IWOM have become central channels for Chinese people to join together to express their patriotism and support for a range of issues, truly showing the power and impact of these broad connections formed through IWOM.

The Internet has always been social in China and has provided a platform for people to form spontaneous connections with one another. “Peoplepower search engine” is a powerful example of netizens utilizing the influence of IWOM to not only connect with one another but to work together to solve individual problems. Netizens have also leveraged the power of IWOM to unify and gather support for the victims of the Wenchuan earthquake on a massive scale. The Internet and IWOM have become central channels for Chinese people to join together to express their patriotism and support for a range of issues, truly showing the power and impact of these broad connections formed through IWOM.

“ Peoplepower Search Engine” : Gathering the power of netizens “ Peoplepower search engine” has become one of the hottest words on the net, especially after the South China tiger photograph incident . Unlike the traditional search engines, “Peoplepower search engine” gathers answers to netizens’ questions utilizing the problem solving skills of other netizens as well as their ability to search. To use “peoplepower search engine,” netizens simply need to post a thread with his/her question or problem on a popular BBS like Mop and Tianya , and then others will join in the conversation with replies including the search results. Mar. 5 th , a post about a new Taobao seller finding a fraudulent buyer appeared on Tianya.( Link ) Origin Manpower Search Engine Works With continuous calling and messaging, the fraudulent buyer admitted her swindle under the guidance of her teacher and agreed to publicly declare her fault the next day. ( Link ) I do feel sorry for my negligence on communication with my friend and I sincerely apologize to the seller for causing great confusion not only to the seller but also to all the netizens. ( Link ) Sample Quote: Declaration from the Buyer Sample Case: On March 5 th , An article written by a new Taobao seller asked for help finding the fraudulent buyer who appeared on Tianya. The article soon drew the attention of netizens and caused the launch of a “peoplepower search engine“ to find the fraudulent buyer. With the help of the “engine,” more information about the buyer soon came to light, including her teacher's telephone number. At last, on March 7 th the fraudulent buyer admitted her swindle under the guidance of her teacher and agreed to publicly acknowledge her actions. Source: IWOM Watch March 1-15, 2008

Internet and IWOM helped unite Chinese citizens at home and abroad in the aftermath of the Sichuan earthquake Picture source reference here In the wake of the Wenchuan earthquake, Chinese citizens at home and abroad united in support of the earthquake victims. The series of “Go China! 中国加油 !” photos are an excellent example of this. One netizen uploaded these touching photos to inspire Chinese citizens to join together in supporting the cause. Overseas Chinese connect using SNS: 5.18 overseas students in England gather for candle light vigil Many other grassroots movements grew through SNS, BBS and other IWOM channels, leaving China stronger in the aftermath of the catastrophe. Source: IWOM Watch Special May, 2008 Earthquake mourning event hosted by: Chinese Student Union in England, Sichuanese Student Union, etc

Post transferred through IM: “Please do not let this poster down… please do your best to transfer the information so that the government can see it and take action” ( Link ) A college student in Chengdu, originally from the epicenter Wenchuan, successfully assisted the army find a landing platform for a relief helicopter by posting a message with a suggested landing location and her contact information on Baidu Post Bar and QQ. The post asked netizens to forward the message to the appropriate contacts. The message was re-posted on BBS portals and transferred via IM and within hours the information reached the headquarters for emergency relief and the helicopter was able to land successfully. Original Post: “I know a good location for helicopter landing… the topography there is flat with good field of vision…Please help rescue the victims and my family members. Anyone who knows how to contact the main disaster relief organization please call me immediately. My phone number is 135××××××××. “ Link BBS helps college student direct a military rescue Link Source: IWOM Watch Special May, 2008

More than any other channel, blogs in China serve as personal diaries. In the wake of the catastrophe, blogs became a platform for grieving and prayer for the victims and their families. Popular blog sites like Sina blog , Sohu blog , and Blogbus all have hundreds of thousands of entries discussing and sharing personal accounts and feelings towards the tragic event. Social media became the collective platform for prayer and hope Typing keyword “pray + earthquake” into NetEase Blog search, yields more than 334,000 blog articles on praying. (link) Sample Quote: 祈福 / Pray ( link ) 5 月 12 日的汶川地震让我们这一辈子都会刻骨铭心，这也是我第一次亲身经历地震，这次的损失惨重，但这并不可怕，只要我们有重建家园的决心就行，让我们都为灾区人民祈福吧！！ We will never forget the earthquake that occurred on May 12 th , 2008. Although it caused massive damage, as long as we have the resolution to rebuild the homes, then the situation is not as daunting. Let us pray for those living in the earthquake area! Prayer: Let’s pray for the victims that everything will be recovered and rebuilt. Prayer: My heart is broken, all I can do is pray for the other victims. Sample Case: Blogs become a channel for public sharing of prayer Source: IWOM Watch Special May, 2008

Internet application created to facilitate rescue efforts in Sichuan - Photos of Wenchuan Earthquake On May 16, Google officially launched a special page dedicated to the earthquake which aggregates content from thousands of forums dedicated to finding earthquake victims, earthquake news update and donation information. Google created a special search engine where netizens can easily type their relative’s name into the search box to look for their family members across multiple survivor search forums. Sina and Netease also launched easy-to-use people search applications on their websites. Popular communities, like QQ and Baidu Tieba , also have specific forums dedicated to helping users find survivors. Related information - Find your relative - Earthquake news update - Blog on earthquake - Discussion Forum - Map of the Wenchuan earthquake situation - Satellite map of quake area Type your relatives’ names here to search and see if the name of victims lost in the earthquake comes up in any of the related forums Map of material donation and transportation update on the page Sample Case: Google sets up “survivor search engine” to facilitate the search for lost relatives Source: IWOM Watch Special May, 2008 Map of blood donation location consolidated on the page

Love China initiative on instant messenger brought Chinese netizens together On April 16 th , in light of the turmoil surrounding the torch relay overseas, a mass MSN “Love China” signature campaign broke out online. The campaign was initiated by netizens to show both their support of the Beijing Olympics and for China as a country. Following the success and popularity of the MSN red heart icon, QQ users began actively taking part in the initiative by using different avatars such as the “Red China Heart” to represent “Love China.” People’s Daily: 7 million MSN users joined the “Love China” initiative Various “Love China” IM avatars Source: IWOM watch April 16-30, 2008

IWOM Watch Special Edition: Internet and IWOM shape the Sichuan Earthquake aftermath DOWNLOAD ENGLISH VERSION HERE DOWNLOAD CHINESE VERSION HERE

The Icons of Net Culture The icons of net culture are no longer limited to traditional icons, such as celebrities, but now range from a classical Chinese character, to cartoon bloggers, to popular online consumer behavior, such as the Ke icon. These icons have growing influence both online and off, with sports cartoon bloggers topping real sports bloggers in number of page views and the classical character “ 囧” which gained popularity online, now being used offline in product lines and art exhibitions. Brands would do well to integrate these elements of net culture into marketing communications strategies to both understand and interact with consumers in a meaningful way.

The icons of net culture are no longer limited to traditional icons, such as celebrities, but now range from a classical Chinese character, to cartoon bloggers, to popular online consumer behavior, such as the Ke icon. These icons have growing influence both online and off, with sports cartoon bloggers topping real sports bloggers in number of page views and the classical character “ 囧” which gained popularity online, now being used offline in product lines and art exhibitions. Brands would do well to integrate these elements of net culture into marketing communications strategies to both understand and interact with consumers in a meaningful way.

Chinese Character Icon leads a new wave of net culture 囧 The original meaning of “ 囧“ , the hieroglyph classical Chinese character, is “bright”. However, the new “net language” definition for the term is “sad, frustrated” , because the character resembles this expression on a human face. The character’s design ignited netizens’ passion and inspired them to use the character creatively in different social applications. Jiong not only stands for an expression of personal status on BBS and IM chat rooms, but also represents a particular style and attitude towards life in general. While the term was originally only popular on the Internet, it is now gradually beginning to penetrate offline life as well. Jiong is now showing up on bags and t-shirts and there was even a recent art exhibition celebrating the character and its culture. An old Chinese character, “ 囧” (“jiong”), has attracted a large amount of buzz within the Internet community, and is now considered one of the most popular characters in Internet culture. the Chinese character Active facial expression icons “ Jiong Everyday” video series and “Jiong” bag Source: IWOM watch April 16-30, 2008

Cartoon Icon becomes an important part of net culture Source: Tuning into Sports IWOM 2007Q4 PV 6,020,539 PV 1,454,755 PV 15,733,672 Cartoon Bloggers PV 326,344 Netizen adds Pepsi can to the cartoon picture of Beckham drawn by a popular cartoon blogger. Cartoon sports bloggers receive millions of page views, more than many popular real life sports bloggers. Sports cartoon bloggers is a growing trend among netizens and is generating impressive page views. Brand’s both direct or indirect involvement with cartoon bloggers has helped to increase awareness of brands and demonstrates a new way for brands to connect with fans.

Nickname Icon: branding the product with netizen well-known content Source: Tuning into Sports IWOM 2007Q4 Alessandro Del Piero Yao Ming Movie king 影帝 Four carats 四克拉 Prince of zebra 斑马王子 Piero for penalty goal 点球皮 King Ming 明王 Ming with mustache 胡子明 Big Yao 大姚 Interpretation Nick Name Luis Scola Utilize the nickname as the advertisement content The nickname icon even becomes the product logo Luis Scola, the Spanish basketball star from the Houston Rocket, is the new spokesperson for the famous Chinese sports brand Anta . Scola has a popular online nickname “four carats ( 四克拉 )” which comes from the pronunciation of his Chinese name, “si ke la”. Anta recognized the popularity of this nickname and utilized its power and influence by integrating it into its new product branding and advertising. Anta’s use of “four carats” in its marketing efforts has already received positive feedback from consumers.

Ke Icon utilizes and inspires popular consumer online behavior Da Ren refers to an expert with a high degree of skill or knowledge in a particular subject like music, cosmetics or computers. Recently, brands, such as Benefit and LG, have started to ride the wave of net culture by launching online Da Ren campaigns. Brands encourage these “Da Ren” to show their knowledge of particular products using both text and/or pictures and then the brands offer prizes for those who display the greatest expertise. The LG Da Ren campaign received over 100 applications with detailed self-introduction in only 10 days. Source: IWOM watch April 1-15, 2008 Benefit Da Ren campaign received 988,680 PV and 825 replies. 试客 Shi Ke 晒客 Shai Ke Create and generate IWOM 达人活动 Da Ren Campaign “ Shi Ke” and “Shai Ke” is a popular among netizens and a key element in online culture. Becoming involved in Da Ren activities is a good way for brands to take advantage of this trend as Da Ren combines the essence of Shi Ke and Shai Ke.

Brands Finding New Channels to “Participate” Brands are not only exploring new channels for connecting with consumers online but are branching out within existing channels to find new and profitable applications for these social media tools. DellOutlet, which generated over $500,000 in revenue with zero marketing budget, is a good example of this. As communications tools such as microblogging and video sharing sites become more popular among netizens, brands should begin to think more creatively about how to utilize and benefit from these tools by participating with consumers.

Brands utilize microblogging to interact with consumers Dell was one of the first brands to establish a transparent presence on fast-growing micro-blogging platforms, such as Twitter . In fact, in addition to Dell’s Twitter presence in US, Dell currently has a Chinese account on Twitter and on Chinese microblogging site Fanfou as well. Starting in 2007, in addition to providing customer service, Dell began using Twitter as a marketing platform. DellOutlet quickly became an effective way for Dell to launch special product offers and answer consumer questions directly. By using this platform, Dell has generated more than $500,000 in revenue through Twitter leads with zero marketing cost. Link Followers 315 Followers 1,195 Followers 132 Followers 146 Followers 141 Some of Dell’s twitter accounts Source: IWOM watch June 1-15, 2008

Proctor & Gamble (P&G) recently integrated online real time chat into their latest consumer day campaign in Guangzhou. This is the first time P&G Asia Pacific has used a real time function like this in a campaign and is their latest effort to listen to consumer feedback and offer direct and tailored feedback to their customers. Additionally, P&G has launched an online chat platform for its diaper brand, Pampers. P&G uses online real time chat in its latest campaign to connect with consumers Brands use online real time chat to connect with consumers Source: IWOM watch March 16-31, 2008

From the above cases (all analyzed in previous IWOM watch reports), we can see that commercial campaigns, advertising and even recruitment programs are taking advantage of video sharing to encourage consumers to contribute innovative content for brands. 1 2 3 4 5 6 Brands leverage video sharing site for brand/campaign promotion Source: IWOM watch March 16-31, 2008 5 CNTVS “Buy it and show it” DV contest 2 Google China G.cn video challenge campaign 1 Intel video contest campaign for its chips 3 Apple took up student made video for iPod Touch TVC 4 Online video for recruitment 6 2010 Expo Trailer Video Contest

Offline Meetups: Popular net culture extends to the real life Event winners showing off their Crocs rewards together Participants actively enjoyed the shows and events Sponsored brand logo on the post at the event stage KDS ( 宽带山 ), one of the hottest local Shanghai online communities, held a successful offline meet-up in April which attracted hundreds of KDS community members to join. Moreover multiple brands , like Crocs , Haier and GIGABYTE , sponsored the event. Note: To experience the KDS party/offline meet up and the local community’s unique culture, click the screenshot below or click here to view the community made party video. 4.5 聚会照片大集锦 / 4.5 Party Photos Collection (PV: 49,380 Reply: 502 by April 18 th ) KDS slang “ 懂得入 (come in only if you ‘really’ understand)” perfectly captures the key to joining specific online communities. The most important element when joining online communities, such as KDS, is to understand the unique culture of these different communities and its members. Source: IWOM watch April 1-15, 2008

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