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Topic Four: Reshaping the Relationship between Brands and Consumers

“The Internet is THE Community”: IWOM white paper Series on Internet Word of Mouth (IWOM) Development in China2008 Q3

2© 2008 CIC

Reshaping the Relationship between Brands and Consumers

The Chinese Internet population is now the largest in the world with 253 million users and the Community is a major element of the Internet experience. The Community is reshaping and revolutionizing relationships that individuals have with each other as well the relationships they have with institutions such as companies.

This white paper, “Reshaping the Relationship between Brands and Consumers,” is Topic 4 of our “The Internet is THE Community” series of reports. In this white paper, we offer a number of case studies of how brands can connect and learn from the Chinese Internet Community.

The full “The Internet is THE Community” series of reports can be downloaded here.

Editorial Summary

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The Netease Model Internet Worker Award (link) is one of the most interesting artifacts of the Internet Community serving as a sort of “Oscars” for service to the community. With netizens voting in an ongoing election, the Internet Community “Subtitle Gangs” are currently in first place, just ahead of the “I ‘HEART’ CHINA” initiative.

The “Subtitle Gangs” are competing groups of volunteers which organize themselves online to create Chinese subtitles for popular foreign movies and TV shows.

As we wrote about in Topic One, the I ‘HEART’ CHINA initiative inspired Chinese netizens to almost universally place a “heart” icon by their MSN name to demonstrate their love of China in spring of 2008.

The power of the Internet Community is that it removes the need for institutions, like TV studios to accomplish tasks -- like quick turn-around translations -- that could not or would not be accomplished without it.

Subtitle Gangs I ‘HEART’ CHINA

• The Internet Community levels the playing field between institutions and individuals

• The Internet Community accomplishes tasks which institutions are either ill suited or not motivated to accomplish

THE POWER OF COMMUNITY: The Internet Community accomplishes what traditional institutions cannot

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THE POWER OF THE INTERNET COMMUNITY: IWOM is redefining the brand/consumer relationshipThe power of the Internet Community levels the playing field between brands and consumers. This means that traditional agencies are no longer a necessity for brands to aggregate and connect with consumers. Brands can directly learn from and connect to targeted, relevant, communicative and empowered consumers by going to the Internet Community. Brands can look to consumers directly for Insight, for Inspiration and for Collaboration.

Social Media prism inspired by Brian Solis and JESS3, 2008; see full size Chinese Social Media Prism here.

Brands BBS Aggregator

Social Networks

Instant Messaging

Customer Review

Online Gaming

Video Sharing

Music

E-Commerce

Photo

Blogs

RSS

Social Bookmarks

BBS

Micro-blogging

Q&A

Wiki

Life Stream

Internet Community

Consumers

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CONSUMERS AS INSIGHT PROVIDERS

Whether brands are listening or not, consumers are expressing their opinion in massive numbers in the Internet Community. For example, in our Q3 2007 “Tuning into Notebook IWOM” white paper, we found that 32.4% of the 411,445 mentions of notebooks on leading BBS communities referenced configuration. Digging deeper, we found that mentions of independent graphic cards drove configuration buzz, indicating a trend towards consumers using notebooks to replace desktops as home PC’s in order to play games and watch videos.

See here for CIC white papers on various categories including notebook computers, automobiles and mobile phones.

22.3%

11.0%9.9%

8.7% 7.9%6.4%

32.4%

Configuration Price Design &Appearance

Service &Channel

Performance Function Marketing &Promotion

Buzz Incidence of Overall Notebook Attributes in Q3, 2007 *

*Note: Buzz incidence of attribute is the percentage of attribute posts among total brand and product posts.

Quote: “4th Centrino Platform, nVIDIA 8400 independent graphic card, all these are standard configurations for middle-high end notebooks…For family entertainment users, this notebook is a good choice as it is a middle-end p r i c e w i t h h i g h - e n d c o n f i g u r a t i o n . ”

Base: Total number of brand and product posts is 411,445

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Alessandro del Piero

Yao Ming

Sports Athlete Nick Names

Prince of the Zebras斑马王子

Piero for penalty goal点球皮

King Ming明王

Big Bro Yao姚哥

Big Yao大姚

InterpretationNick Name

CONSUMERS AS INSPIRATION

When passionate sports fans talk about their favorite players, they use creative nicknames like “King Ming”（明王）for Yao Ming and “The Prince of the Zebras （ 斑 马 王 子 ） for Alessandro del Piero. Inspired by this passion, when Chinese local sports apparel brand Anta wanted to create a new line of apparel for its spokesperson Luis Scola, it looked to his fans’ nickname “4 Carat,” a phonetic play on his name in Chinese. Anta created a 4 Carat logo which was integrated into a line of 4 Carat shoes, caps and shirts. Similarly, Lining created a line of shoes inspired by the Chinese character “Jiong”(囧).

Movie king影帝Luis Scola

四克拉 Four carat

See here for CIC white papers on various industry categories including sports.

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CONSUMERS AS COLLABORATORS

Sample Consumer Submissions

中国盒，世界芯！

link

The Chinese package, the world’s core!

中国形 酷睿心

link

The Chinese style, the Conroe heart.

See more information about the case, you can refer to Sam’s blog IWOM centered marketing in China

The Internet Community offers unprecedented opportunity to connect and collaborate with the most informed and most passionate of your consumers. In 2007, when Intel wanted to launch its first Chinese language packaging, it worked with a forum administrator to post a topic on a popular DIY (do it yourself) BBS forum inviting forum members to submit their ideas for a Chinese slogan. Over the course of a month, thousands of quality slogans were posted and awards, including two processors and a watch, were given as gifts to the submissions deemed the most humorous and the most creative.

8© 2008 CIC *Data source: CIC Efluencer survey, 2008 Q3

THE INTERNET COMMUNITY: Do they want brands to participate? The Internet Community actively discusses, and even builds community, around brands. But do consumers welcome brands to participate in the community? According to our survey of “efluencers”, the participants on leading communities, the answer is yes. Of course, participation should be done with transparency and respect of community culture.

49%

6%

45%

Often Seldom Never

55%

Ever contacted by brand

Attitude of cooperating with brands

51%

38%

11%

Support Cooperative Dislike

89%

Positive to cooperate

The response to cooperate with brands *

Base: 315 valid responses

Frequency of being contacted

InteractionBrand

Netizens

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MAKING SENSE OF THE BUZZ: The L-K-PTM framework

Listen听 Know识 Participate融Topic E-Culture Communication

Listen to consumer feedback

- Systematically analyze millions of unsolicited, naturally occurring comments about your brand, products, services and industry

Know the communities and cultures

- Develop understanding about who they are, where they are, why they talk, what is their language, and what motivates them to participate…

Participate to bring value and appreciation

- Based on IWOM understanding and insights, participate in the Internet Community in effective, innovative and appropriate ways

As an independent provider of Internet Word of Mouth intelligence, CIC has been using its “Listen-Know- Participate” framework to help brands leverage the power of IWOM and bring value to the Internet Community. CIC services Fortune 500 brands in China by providing a thorough, systematic, objective and strategic understanding of Internet Word of Mouth.

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THE IWOM MINDSET: Creating an internal/external ecosystem for leveraging IWOM

1. Consider IWOM as a strategy/mindset (not a tactic)• Express your voice (not your message)• Develop platforms, not only campaigns• Hire a dedicated person or team for vision/execution (i.e. IWOM

manager)

2. Leverage IWOM strategy across the marketing organization (not siloed, i.e. not only PR tracking)

3. Utilize an execution agency with real understanding of IWOM

4. Utilize trusted, 3rd-Party Research/Consulting for non-biased strategy and measurement

11© 2008 CIC

ABOUT CICCIC is the leading Internet Word of Mouth (IWOM) research and consulting firm in China. Since 2004, CIC has pioneered the concept of Internet Word of Mouth (IWOM) that is redefining the relationship between brands and consumers. CIC coined the term Internet Word of Mouth and is the thought leader in utilizing it for strategy planning and application in marketing communications. CIC is committed to both providing objective third party strategic advice to clients and promoting the healthy development of the Internet Community in China. CIC’s research and discussion of IWOM’s impact and best practices can be found on company blogs, IWOM white papers and IWOM watch reports and through its IWOM roundtable events such as IWOM summit and IWOM classroom.

CIC offers customized research and consulting service to its stable of retainer clients through its expert IWOM analysts supported by proprietary Chinese language based text mining technology (patent pending), data processing technology and data visualization technology. CIC’s retainer relationships stretch over multiple years with multinational clients from Fortune 500 companies.

CIC’s continual development and evolution is driven by a unique, powerful and open mindset and learning culture which at its foundation continually seeks to understand how the Internet, and Internet Word of mouth, is redefining the relationships between brands and consumers.

For more information, please visit www.cicdata.com (CIC website), www.seeisee.com (CIC Company blog in Chinese) and www.seeisee.com/sam (CEO's company blog in English).

Thank You

OUR BLOGS:www.seeisee.com (Chinese)www.seeisee.com/sam (English)

OUR WEBSITE:www.cicdata.com

CONTACT US:info@cicdata.com

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