Today’s Discussion
I.     Welcome & Introduction: Craig Hoy, Executive
       Director, PublicAffairsAsia
II.    Today’s O...
Introductions
• VIPS:
    –   Mr. Liu Hang, Acting Director, Ministry of Foreign Affairs
    –   Ms. Zhang Xin, SCIO
    –...
Today’s Objective
1. Discuss impact of social media on public
   affairs in Mainland China
  –   Review survey results and...
Moderator’s Overview:

  Social Media Landscape
What is Social Media?
• Internet-linked
• Many-to-many, user generated content
• A keyboard and a point-of-view gets you i...
What Does It Look Like?

  OLD:                          NEW:
Pyramid Model         Sphere of Cross-influence

  Organizat...
• Conversations can start
                                        anywhere within a network

producers              commen...
China Internet: The Numbers
•   338 million Internet users
•   181 million bloggers, 119 million regularly update
•   155 ...
China’s Major Websites All Have
    Social Media Components
• QQ /Tencent from IM to gaming to blogs
• BBS: from tianya.cn...
Trust in the Internet
• 84.3% of Chinese Internet users believe that the
  Internet is their most important source of
  in...
Trust wanes for most traditional information sources;
                                     Word-of-mouth on par with media...
The Unwritten Rules
• National pride
• Anti-establishment: Chinese Netizens love
  challenging authority
• Sensational: Ch...
A View From The Government
The characteristics of online public opinion crises …
    suddenness 突发性
    destructiveness 破坏...
Edelman/PublicAffairsAsia Social
Media Survey: November 17, 2009

        Online Survey Results
Methods
• This survey was conducted over the Internet
  beginning November 6 and ending November 13.
• A total of 132 inte...
Respondent Profile
• One out of three respondents are communications specialists
  with MNCs or SOEs. One in five work wit...
Importance of “Social Media” to
   Overall Public Affairs Strategy in
                China
How important is social media ...
Social Media’s Influence Over
              Public Policy
To what extent do you believe opinions
expressed in online and d...
How the “Social Media” are Used
        by Respondents
                           How often do you conduct    And how ofte...
How Social Media is Used in
               Organizations
         Represented in this Survey
Which of the following statem...
Department or Function
                Responsible for
              Social Media in China
In your organization, which dep...
Statements About
   Social Media
Statements About
   Social Media
Online Public Affairs
   Case Studies in China
• The Coca-Cola Company - Huiyuan
• Tengzhong- Hummer
• Hangzhou 70kph
• Mi...
The Coca-Cola Company
failed bid to buy Huiyuan
How Story Broke
Media breaks story
September 3, 2008 — Huiyuan reports Coke takeover bid to
  Hong Kong market regulators,...
How Story Played Out
National pride issues
September 5 - 12 — Internet discussion focuses on allegations of
  quid pro quo...
Lessons Learned
• Buyer and seller treated this as “transaction
  communication” - top down

• Completely ignored grassroo...
Tengzhong - Hummer Deal




        Image from
        http://www.dongying.com.cn/qcpd/xwzx/sdpl/42041.shtml
How Story Broke
Unstructured announcement by GM / Tengzhong
June 1, 2009 — GM Chapter 11 announcement says Hummer brand wi...
How Story Played Out
Government reaction to new announcement
October 10 — In a Xinhua report, the Ministry of Commerce sta...
Lessons Learned
• No communication co-ordination between buyer and seller
• As with Coke / Huiyuan: this treated as “trans...
Hangzhou 70kph
How Story Broke
Media report fatal car accident
May 7, 2009— Hu Bin (20) driving souped-up car, hit and killed Tan Zhuo, a...
How Story Played Out
Police reaction to controversy
May 15 — Hangzhou police released update estimating Hu's speed between...
Lessons Learned
• Authorities are subject to same online forces as
  companies
• Chinese netizens are sensitive about case...
Mineralized Water
How the Story Broke
Story broke on BBS website
Late July 2008 — BBS post “Master Kong, where is your water source?”
   app...
How Story Played Out
Regulators react
Mid August — government regulators get involved, review bottled water
   standards.
...
Lessons Learned
• Social media is the world’s biggest fact-checker and
  can rapidly expose false advertising
• Traditiona...
Public Affairs Dialogues Roundtable
Public Affairs Dialogues Roundtable
Public Affairs Dialogues Roundtable
Public Affairs Dialogues Roundtable
Public Affairs Dialogues Roundtable
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Public Affairs Dialogues Roundtable

  1. 1. Today’s Discussion I. Welcome & Introduction: Craig Hoy, Executive Director, PublicAffairsAsia II. Today’s Objectives III. Moderator’s Overview: Alan VanderMolen, President, Asia Pacific, Edelman IV. Survey Results & Discussion V. Break VI. Social Media/PA Case Studies & Discussion VII. Conclusion: What does this mean for public affairs in China: Foreign MNCs, SOEs, Government, Civil Society VIII.Cocktail Reception
  2. 2. Introductions • VIPS: – Mr. Liu Hang, Acting Director, Ministry of Foreign Affairs – Ms. Zhang Xin, SCIO – Mr. Zheng Yannong, Vice President, CIPRA – Mr. Xue Lan, Dean, School of Public Policy & Management, Tsing Hua University • Craig Hoy, PublicAffairsAsia • Alan VanderMolen, Edelman • Frank Lavin, Edelman • Steven Cao, Pegasus
  3. 3. Today’s Objective 1. Discuss impact of social media on public affairs in Mainland China – Review survey results and case studies 2. Discuss the future of public affairs given the new role of social media – Foreign MNCs, SOEs, Government, Civil Society
  4. 4. Moderator’s Overview: Social Media Landscape
  5. 5. What is Social Media? • Internet-linked • Many-to-many, user generated content • A keyboard and a point-of-view gets you into the discussion • Governments, companies and citizens are becoming their own media companies
  6. 6. What Does It Look Like? OLD: NEW: Pyramid Model Sphere of Cross-influence Organization Businesses Media Employees Regulators Investors NGOs Trade Bodies Mass Audience Consumers
  7. 7. • Conversations can start anywhere within a network producers commenters • Influence flows from multiple sources – no longer the sole domain of mass media • Influence can spread in any direction curators • Real people can be influencers and/ or amplifiers • Different pyschographics: sharers watchers Watchers, Sharers, Commenters, Producers, Curators conversations start anywhere – and involve influencers of all stripes
  8. 8. China Internet: The Numbers • 338 million Internet users • 181 million bloggers, 119 million regularly update • 155 million people use mobile phone for Internet • 124 million social network (SNS) users • 102 million BBS users • 62.8% of Internet users are aged 10 - 29 Data source CNNIC reports June and November 2009
  9. 9. China’s Major Websites All Have Social Media Components • QQ /Tencent from IM to gaming to blogs • BBS: from tianya.cn to People’s Daily to Baidu.com to tiexue.net… • SNS: Kaixin001.com, Renren.com, 51.com • Blogs and news commentary: Sina.com, Sohu.com • Video: Youku.com, Tudou.com • Microblogging: Sina, QQ • Auction/e-commerce: Taobao.com
  10. 10. Trust in the Internet • 84.3% of Chinese Internet users believe that the Internet is their most important source of information. Data source CNNIC June 2009
  11. 11. Trust wanes for most traditional information sources; Word-of-mouth on par with media 100% 90% 80% 70% 2008 2009 70% 60% 50% 53% 47% 49% 49% 50% 44% 39% 40% 34% 34% 30% 22% 20% 10% 0% Television news Articles in Articles in News coverage Conversations Conversations coverage business newspapers on the radio with your friends with company magazines and peers employees N/A C95-98,103. [TRACKING] Now I’m going to read you a list of places where you might get information about a company. Please tell me how credible you believe each one of them is as a source of information about the company—is it extremely credible, very credible, somewhat credible, or not credible at all? (Top 2 Box), Informed publics ages 25-64 in China. 13
  12. 12. The Unwritten Rules • National pride • Anti-establishment: Chinese Netizens love challenging authority • Sensational: Chaozuo 炒作 approach • Replicable: Zhuanzai 转载 culture
  13. 13. A View From The Government The characteristics of online public opinion crises … suddenness 突发性 destructiveness 破坏性 urgency 紧迫性 … In the Internet age, many of the means of news control that were effective in the past are no longer useful, and many in fact bind our own feet and hands, creating passivity in the handling of crises by the party and the government. 在网络时代,许多过去行之有效的新闻管理办法有的已经不起作用,有的 反而束缚我们自己的手脚,造成党和政府处理事件的被动。 From government document: ‘How public prosecutors can neutralize online opinion crises’ — August 2009 http://media.nfdaily.cn/content/2009-08/13/content_5553979.htm
  14. 14. Edelman/PublicAffairsAsia Social Media Survey: November 17, 2009 Online Survey Results
  15. 15. Methods • This survey was conducted over the Internet beginning November 6 and ending November 13. • A total of 132 interviews were submitted by the end of active data collection.
  16. 16. Respondent Profile • One out of three respondents are communications specialists with MNCs or SOEs. One in five work with consultancies. Approximately one in 10 are employed by government or NGOs. • Six out of ten claim to be decision makers for government or public affairs strategy in China. The remainder are mostly involved in the implementation of government or public affairs strategies. • More than six out of ten respondents are residents of China or Hong Kong.
  17. 17. Importance of “Social Media” to Overall Public Affairs Strategy in China How important is social media to your broader public affairs strategy in China? Extremely important 17% Very important 28% 74% Somewhat important 29% Not particularly important 14% Not at all important 13%
  18. 18. Social Media’s Influence Over Public Policy To what extent do you believe opinions expressed in online and digital social media channels influence contemporary public policy in China? The most influential media 10% channel available 67% Often more influential than 57% other media channels No more influential than other 24% media Less influential than other media 9% channels
  19. 19. How the “Social Media” are Used by Respondents How often do you conduct And how often do you a systematic search of communicate news and Answers social media for news and information about your information about your business via social media? business? Many Times a day 11% 5% At least once a day 27% 59% 16% Several times during the 21% 16% week At least once a week 12% 17% Less than once a week 29% 46%
  20. 20. How Social Media is Used in Organizations Represented in this Survey Which of the following statements best reflects your organization’s use of social media in a public affairs context in China? We fully utilize social media platforms as part 17% of our public affairs strategy and have evaluated its impact 60% We have started to use social media platforms 43% as part of our public affairs strategy but have not yet evaluated its impact We do not utilize social media platforms as part 32% of our public affairs strategy We avoid social media platforms as part of our 8% public affairs strategy
  21. 21. Department or Function Responsible for Social Media in China In your organization, which department (function) is responsible for strategic social media communications in China? Marketing department 11% Corporate communication / Corporate 23% affairs Public relations department 16% Public affairs department 8% No particular department assigned 42%
  22. 22. Statements About Social Media
  23. 23. Statements About Social Media
  24. 24. Online Public Affairs Case Studies in China • The Coca-Cola Company - Huiyuan • Tengzhong- Hummer • Hangzhou 70kph • Mineralized water
  25. 25. The Coca-Cola Company failed bid to buy Huiyuan
  26. 26. How Story Broke Media breaks story September 3, 2008 — Huiyuan reports Coke takeover bid to Hong Kong market regulators, HK media pick it up Social media reacts September 5 — Sina.com video interview* that says Coke's acquisition of Huiyuan would violate anti-trust law Further reaction from social media September 8 — Sina video transcript taken down — netizens call it 封口门 (hush-gate), alleging that Coke attempted to manipulate public opinion * With lawyer Qian Weiqing, trade analyst Mei Yuxin, and consultant Li Su
  27. 27. How Story Played Out National pride issues September 5 - 12 — Internet discussion focuses on allegations of quid pro quo for Coke Olympic sponsorship, national pride, sale of national jewel to foreign company, criticism of Huiyuan CEO Zhu Xinli — Mainstream media follows tone of Internet debate Slow reaction September 12 —Coca Cola Company denies cover-up charges Deal is rejected March 18 2009 — Regulators finally turn down the deal; netizens claim victory
  28. 28. Lessons Learned • Buyer and seller treated this as “transaction communication” - top down • Completely ignored grassroots / digital
  29. 29. Tengzhong - Hummer Deal Image from http://www.dongying.com.cn/qcpd/xwzx/sdpl/42041.shtml
  30. 30. How Story Broke Unstructured announcement by GM / Tengzhong June 1, 2009 — GM Chapter 11 announcement says Hummer brand will be discontinued June 2 —GM says MOU signed with Chinese buyer for Hummer; later that day CNN and NY Times identify it as Tengzhong, Tengzhong then confirms Social media reaction June 3 through August — Blog posts criticize the deal, saying Tengzhong will get only a brand name not any technology, and alleging that the deal is for money laundering or a way to export capital from China. Such online criticism continues throughout June. Bloggers suggest that the government may not approve the deal Announcement of deal confirmation October 9 — Tengzhong and GM announce deal is finalized
  31. 31. How Story Played Out Government reaction to new announcement October 10 — In a Xinhua report, the Ministry of Commerce states that it has not received the required applications from Tengzhong. Further social media reaction October 12 — Bloggers say Tengzhong may have set up a offshore company to circumvent regulations; CCTV news anchor and blogger Rui Chenggang criticizes the takeover on his blog as "against the Chinese government's commitment to low-carbon economy development and environmental laws“. Widespread negative speculation and further online criticism of the deal continue. Still in play…
  32. 32. Lessons Learned • No communication co-ordination between buyer and seller • As with Coke / Huiyuan: this treated as “transaction communication” - top down, ignoring grass roots / digital • Buy-side and sell-side vulnerable to nationalistic commentary • National pride issues can attract celebrity bloggers who have clout of mainstream media with strong digital / grass roots following
  33. 33. Hangzhou 70kph
  34. 34. How Story Broke Media report fatal car accident May 7, 2009— Hu Bin (20) driving souped-up car, hit and killed Tan Zhuo, a "working class" man (25) while crossing a street. Witnesses said that Hu's speed was enough to send Tan flying, but media reported police gave him a minor citation for driving at 70 kph. Social media reaction — “human flesh search engine” 人肉搜索 May 7 - 14 — Netizens outraged at apparent deference to Hu's wealthy background, and his nonchalance — photo of he and friends smoking and laughing near scene of fatal accident ”Human flesh search engine" uncovers Hu's driving record and other personal information and attempts to find out his family connections. "70 kph" becomes online catch-phrase.
  35. 35. How Story Played Out Police reaction to controversy May 15 — Hangzhou police released update estimating Hu's speed between 84 and 101 kph. Resolution July 20 — Hu Bin appeared in court and is sentenced to three years in prison. Netizens compare photos released to the press against photos taken at the scene of crime and suggest that Hu paid someone to take his place in jail. A week later Hu expressed regret and offered proof of his identity.
  36. 36. Lessons Learned • Authorities are subject to same online forces as companies • Chinese netizens are sensitive about cases of apparent abuses by the rich and well-connected • Slow police reaction to online criticism enhanced netizen suspicions • Once “human flesh search engine” behavior starts, even baseless rumors are credible to netizens
  37. 37. Mineralized Water
  38. 38. How the Story Broke Story broke on BBS website Late July 2008 — BBS post “Master Kong, where is your water source?” appears, accusing Master Kong (康师傅) of quality problems, foremost that their mineral water is merely tap water. Huge response from netizens, who accuse the company of false advertising. Traditional media picks up story August 6, 2008 — National Business Daily picks up the story, noting that bottling plant is located in an area without natural springs. Reporter speaks to Master Kong representative, who says: "Everyone does it. A one or two kuai bottle of water can't be natural spring water."
  39. 39. How Story Played Out Regulators react Mid August — government regulators get involved, review bottled water standards. Corporate response September 2 — Master Kong apologizes for creating the "gap in understanding" by not adequately explaining its "superior source”. Water is now labelled as “distilled”, “mineral” or mineralized”. Reputational fallout September 9 — Results of an online poll conducted by China Youth Daily reveal: 57.3% of respondents will no longer buy Master Kong water; 72.9% believe that supervision of the water industry needs to be strengthened
  40. 40. Lessons Learned • Social media is the world’s biggest fact-checker and can rapidly expose false advertising • Traditional media now feeds off social media

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