Report Period: July - Dec, 2006CIC Contact: info@cicdata.com

- CIC Watch 6 Month Review

“You”— Time’s Person of the Year — also lives in China

Time recently selected “you” as the person of the year because “you” is taking control of the information age via blogs, message boards and video. Lucky for us, “you” also lives in China, with 2006 serving as a breakout year for Internet Word of Mouth (IWOM). Just as in the West, this was the year that consumers began taking control of their media.

They created their own stars. Dell learned that they can create a crisis. Bloggers topped the best seller list with their printed blog content and searched on Baidu for quintessential net star Fu Rong Jie Jie more than they did Mao Ze Dong. Brands also reached out to consumers for marketing ideas, asking them to create TVC’s (Pepsi Creative Challenge) and tapping their net stars to be spokespersons (Sony Ericsson and Tian Xian MM).

For this report, we have prepared a 6 month review past CIC watches. It doesn’t cover the whole year, but if these past 6 months are any indication, we are only at the beginning of a long and interesting ride with the consumers behind the wheel. We look forward to reporting more in 2007!

“You” – the Person of the Year

• Be careful, consumers now are in control of your brand image • Dell Hell China Agenda - Consumers rally on BBS to create a class action

lawsuit against Dell in less than 2 weeks• KFC’s Woes Continue – Netizens have a good memory

Content Highlights

Welcome to the Crisis

2.0 era

• Consumers’ ideas can bring you great marketing opportunities, do not just ignore popular buzz

• Mega Collaboration – consumers become marketers

• Corporate blog – an emerging trend to share companies’ great work in a humanized voice

• Extending your brand experience to the virtual world

• While breathing the common Net Language, netizens are also passionate to discuss things new like the online “Gate” incidents

• Creating Net Stars overnight – you could be the next one• Not just offline – famous actress Xu Jinglei gets picked by AMD for her

world’s most influential blogger reputation

Consumer- Brand Co- Creation

Extended PR/Marketing

Channel In Web 2.0

The Rising Net Culture

In the "old days," a company crisis typically started in traditional media, and then was amplified via on BBS and Blogs. "Black March" of 2005 with SK-II, Heinz, KFC and others offer plenty of cases. And this is what we call crisis 1.0.

Now, more and more, crisis' are actually starting on BBS or blogs. In the U.S., it started with Kryptonite. Then, Dell Hell, and more recently Comcast and AOL. For overview in China, see Business Week . Also, see our analysis here and here. This new era of crisis is 2.0 now.

Crisis 1.0 Crisis 2.0

Welcome to the Crisis 2.0 era

Source: CIC Watch Jul 1-15

In July, an offending VW Polo Ads left an impression that subway commuters should become "aspiring" Polo GP owner so they can overcome the seemingly working class subway.

The reaction of netizens was fierce, and as netizens are apt to do in such situations, one poster juxtaposed the original ads with his own text copy added to Gulfstream Jet adverts.

FYI: Toyota once met similar problem long time ago.

In China

A Comcast technician sleeping on my couch: one Comcast (a famous cable network company in U.S) technician fell asleep on the consumer’s couch when fixing the network problem. The consumer recorded this scene with camera, added text subtitle and background music, then uploaded it on YouTube which finally made coverage on mainstream media because of the loud buzz

In U.S

Be careful, consumers now are in control of your brand image

•June 23, 2006: On IT168 BBS Dell Forum, a consumer complained that Dell shipped notebook with different chip than advertised on Dell website LINK•June 24, 2006: IT168 Dell Forum administrator set up a post in the forum inviting others to share their problems with Dell problems LINK•June 24, 2006: IT168 set up a “Dell Hell” section on its website to track the issue LINK•June 28, 2006: Dell responded to the incident, saying it is feeling sorry about the issue LINK•June 29 , 2006: Shanghai based lawyer Ma Jianrong (马建荣) posted a proposal on IT 168, saying he would like to provide lawsuit service to “Dell Hell” consumers LINK•June 30, 2006: Mainstream media began to report the lawsuit that over 200 consumers are suing Dell LINK•July 4, 2006: CCTV2 interviews lawyer leading class action suit against Dell and reported the status of the lawsuit LINK•July 5, 2006: Dell responded to the incident again, saying consumers can get refund LINK

See BusinessWeek Article about Processor Gate here.

Source: CIC Watch Jul 16-31

Dell Hell China Agenda - Consumers rally on BBS to create a class action lawsuit against Dell in less than 2 weeks

Source: CIC Watch Oct 16-31

“Eating KFC chicken wrap means a ticket to university?” This controversial TVC becomes the start of a serial TVC problem. (sample buzz)

April 2006

KFC chicken sandwich TVC gets accused of spoofing Chinese traditional culture. (sample buzz)

July 2006

KFC egg tart TVC is accused of deceptively portraying a Japanese idea in a Chinese way. (sample buzz)

September - October 2006

We are not stupid, respect us

Japan is not welcome here

We love our country, do not insult anything related to China

KFC’s Woes Continue – Netizens have a good memory

Wow! Some of the customers really understand the brand, we should try these ideas…

I think it would be cool if they have a TVC like this…

With the development of online interactive technology, working with your customers and letting them think about the brand at your position becomes much easier to access. Brands now have the opportunities to further expand their value through true engagement.

Consumer-Brand Co-Creation

Consumers’ ideas can bring you great marketing opportunities, do not just ignore popular buzz

“Diet Coke + Mentos Mint = Fountain”, in June, 2 creative men release a super viral video about how they use Coke and Mint to make a magnificent soda fountain which finally creates a hot scenario of similar consumer made videos.

While Coke thinks such videos inappropriately displays its Diet Coke product, Mentos utilizes this opportunity to further associate its brand image with the popular trend by hosting “Mentos Geyser Video Contest” in July.

Maybe because of the good success of Mentos Geyser Video Contest, in October, Coke finally changes its mind to welcome the original video makers as stars to represent its creativity marketing event “Poetry in Motion Challenge”.

Source: CIC Watch Jul 1-15/Oct 16-31

Mega Collaboration – consumers become marketers

Source: CIC Watch Aug1-15

Brand Campaign Description Type of Submissions

No. of Submissions

Total No. of Online Social

Media Mentions*

Skincare Creative Lifewrite down an creative idea in daily life

Video, Text 884 150

Electronic Toothbrush "War" Reporter

Report on fight against teeth bacteria

Text 291 200

Computer Writing for XXX write a script for TVC

Text, Video, Picture 1,311 380

Beverage Saving XXXwrite a script for XXX TVC ending

Text, Video, Flash 152 2,508

Athletic Apparel JDI Acting in brand video Video, Text 1,045 6,666

Beverage Creative Challenge

write a script for spokesperson TVC

Text 26,869 28,154

Note: Based on CIC tracking, estimates and publicly available data.

In 2006, many brands launched open source marketing to let consumers design products’ next TVC/logo or to let them share brand experience in daily lives through videos/text script. The buzz is good for brands, but more importantly, consumers become marketers by deeply thinking about the brand’s image/value.

The interactive web technology not only brings a sea of change to netizens’ online experience, but also provides a whole new channel to conduct its PR and Marketing event. Consumer engagement has never been so massively close to brands.

Extended PR/Marketing Channel In the Times of Web 2.0

Corporate blog – an emerging trend to share companies’ great work in a humanized voice

… and more

Companies that blog their core product/value:

If your company is also doing great work, why not yet share with others?

Source: CIC Watch Oct 1-15

Executive blogging

Source: CIC Watch Oct 1-15

Blogging your product Blogging your values

Corporate blog – an emerging trend to share companies’ great work in a humanized voice

Shanghai VW is now making its POLO available in the virtual gaming world “疯狂赛车”(crazy race). Players can purchase the virtual car and drive it in the game. POLO banners are also displayed in the gaming space. Such online-offline mixed connection would help to establish/strengthen the emotional bond between brands and consumers.

Extending your brand experience to the virtual world

SecondLife is a popular online virtual life game, recently more

and more organizations enter it to extend their influence

Screenshot at left:

1. Dell sets up Dell island for product information sharing, extensive branding and more…

2. Famous private PR firm Edelman creates new island in Second Life through cooperation with Electric Sheep Company.

3. For PR, US government organization Center for Disease Control enters Second Life.

Players can buy their VW polo and cruise in it in the game

Source: CIC Watch Oct 1-15/Nov1-15/Dec 1-15

1

2

3

In China

In U.S

The Rising Net Culture - When online, do what netizens do

Netizens have special language, create and worship their own celebrities. Many offline experiences just do not fine when they get online. For anyone who wants to fit in that world, it is wise to start observing. Furthermore, the net culture has not only online influence but also affects the offline world.

Source: CIC Watch Sept 1-15/Oct 16-31

University Gate(大学门)

Processor Gate (换芯门)

Commentary Gate (解说门)

Shi Yang Gate (师洋门)

Toilet Gate (厕所门)

June

June

August

September

April

“Gate” Incidents

粉丝 - fans

拍砖 - make suggestions

顶 - support

粉 - very

大虾 (big shrimp)- savvy

74 (去死) - go to hell

偶 (我) - me

FT(晕倒) - faint

PMP (拍马屁)- kissing ass

MPJ (马屁精) - people who kiss ass

表 - no

BT (变态)- sick

BS (鄙视)- shame on others

撒花 - congratulations

Common Net Language

While breathing the common Net Language, netizens are also passionate to discuss things like online “Gate” incidents

Source: CIC Watch Aug 16-31

Tian Xian MM

Bus MM

Ding Beili

Netizens create fan site after finding this ethnic girl

Become media focus

Represent Sony-Ericsson mobile phone

A local beautiful bus conductor’s photo get uploaded to BBS by netizens which brings unexpected fame in local region and finally puts her on newspaper cover

Fans take a picture of a beautiful girl at an exhibition

Story gets traditional media attention

Interviewed by major portal site

Creating Net Stars overnight – you could be the next one

Source: CIC Watch Jul 1-15

AMD’s (world’s second biggest computer processor manufacturer) new TVC is directed and acted by world’s most influential blogger Xu Jinglei. The TVC is focusing on her famous blog. The netizen who uses AMD’s new processor becomes the first one leaves the comment to her blog. This idea is represented by the Chinese social media term of "grabbing the sofa" or "抢沙发" (the term used to describe the effort to place the first comment on a blog or BBS post, a point of pride for many).

Not just offline – famous actress Xu Jinglei gets picked by AMD for her world’s most influential blogger reputation