Playing the public image game is now non-negotiable in China: Chinese firms selling their shares in over-seas stock markets need to groom their image at home and abroad while international firms seeking a share of the China pie aim to warm the hearts of Chinese consumers. Pitching messages to the increasingly skeptical state media and public is now a job better left to the pros.
Enter the spin doctors. Since international marketing giant Hill & Knowlton, China’s first public relations agency, opened a representative Office in Beijing in 1984, PR firms have multiplied to over 2,000. The industry had a total market value of about US$740 million last year, up over 30% from 2003, according to the China International Public Relations Association.
Public relations firms are finding themselves in the middle of China’s shifting market culture, with buyers and sellers relying less on word-of-mouth and more on brands, adverts, and news, said William Dodson, managing director of Silk Road Communications, a Beijing-based PR firm. “The market is rationalizing,” he said. “Public relations is the shifting of credibility from the people that you know on an individual basis to institutions and to products.”
Proper public relations particularly depends on a well-developed media with “a sense of responsibility to report facts accurately and not misrepresent any point of view nor carry any agenda,” according to Esmond Quek, managing director of Hill & Knowlton China. And as the Chinese media grows more sophisticated and more skeptical, media relations, particularly, is taking off in China.
Navigating state media
A main role for PR firms in China is simply helping their clients navigate a culturally complex Chinese media maze. As international firms pile into the market, the media is increasingly saturated and the individual message increasingly lost. To get media and public attention, the message du jour is ‘we care about China’, according to PR professionals across the industry.
In line with this, Chinese firm Shunya Public Relations (formerly know as Pro-Future Consulting) advises its international clients to emphasize charity activities and technology transfers. “The key message should be that the MNC comes to China not to make money and take that money away but to make the money and invest in the market and grow and develop together with the market in China,” said Shunya’s Wong.
Dodson often works with Chinese trade publications as he tries to help American auto parts manufacturers to stand out among the thousands in China’s auto industry. “At a dinner with three editors from the Beijing area – what won them over was not the story of our client, it was my genuine interest as an American in Chinese culture and language and history,” Dodson said. “They thought, ‘ well if this guy is really interested in China, then his client must be really serious.'”
Of course, Dodson is talking about more than shaping a message, but also about the ever-present Chinese tradition of mining relationships, or guanxi. Indeed, Dodson’s Silk Road Communications – like many PR firms in China – seems to specialize in guanxi – dispatching reps to dinners with editors across the nation. And while, in an industry that worldwide is about relating the focus on relationships in not particularly surprising, Chinese media relations take a slightly unusual form.
Beyond the occasionally banquet ganbei (“bottoms up”), relationship building with Chinese media may involve providing the means for a group of auto magazine editors to attend a Detroit auto show – including air fares, hotels, food expenses and a RMB100-200 ‘gratuity.’ This kind of compensation, frowned upon by journalists in most developed countries, and recently declared illegal by Beijing, continues to be business as usual in Chinese media relations. Dodson describes one example of a newspaperwoman calling from a distant province to ask the firm to pay her way to Shanghai so she could ‘report on an auto-show’ (the agency declined). The founder of a Shanghai-based travel agency said he often skips the expense-paid vacation and simply pays Chinese publications to print press releases as editorial.
Media grows up
Still, the media scene in China is changing. “The media is becoming more professional,” said Shunya’s Wong. It used to be the case that the media just took a press release from a press conference for the full article – now the journalists try to write their own articles.”
Wong attributes the shift to the well-informed reporting and the increased credibility of several of China’s financial publications, particularly the four-year old 21st Century Business Herald.
And while most Chinese companies have yet to understand the importance of public image campaigns, some – including several bureaucratic SOEs – are beginning to come around, according to Wong. With growing international competition and an increasingly sophisticated banking consumer base, Industrial Construction & Commercial Bank of China recently used Shunya’s expertise and a blitz of events, feature articles and branch opening, to help augment its image as a mass retail bank with that of a high-end service provider.
The new investigative media also is drawing Chinese and foreign firms alike across the racks – exposing the sort of corporate scandals that have long plagued companies abroad.
Just a few months ago, the pages of state media were filled with food scandal after food scandal – Shanghai’s Bright Dairy was storing milk outside during hot summer months, Haagen-Dazs was making ice cream sandwiches in an unsanitized Shenzhen apartment. These details would never have been reported five years ago, according to Wong. And in times of distress, firms in China are turning to the specialists, providing PR firms with a steady supply of crisis management work.
PR’s future in China
All said, public relations remains in its infancy in China. The Chinese media is not at international media standards, said Wong. And investor relations continues to lag well behind media relations. Shanghai and Shenzhen-listed companies currently disclose only what is required by regulation, usually less than is necessary to raise investor confidence.
Nonetheless, PR firms are increasingly being hired by Chinese firms. Hill & Knowlton last year had about 70% international clients and 30% Chinese, compared to an 80-20 ratio in 2004. The world’s giants are here – among the top ten international companies having set up shop in China are Hill & Knowlton, Ogilvy Worldwide, RudderFinn Beijing and Burson-Marsteller China. But foreign firms increasingly have to compete with China’s own top ten – including ProFuture, China Global and Broadcom Consulting. There are now several Chinese associations to support the industry, sponsoring constant conferences on the subject. And Chinese companies are gradually adopting what Dodson describes as ‘institutionalized face.’