Walking the talk

When Time magazine issued its list of the 100 most influential people in the world last month, it included a Chinese activist little known outside of blogging circles.

Zeng Jinyan, 22, detailed her experiences with China’s secretive law enforcement after her husband Hu Jia, an AIDS and environmental activist, was detained. Zeng’s postings traveled the world, available to those who were looking for them.

In China, blogs and bulletin boards have emerged as powerful modes of communication in contrast to the fragmented and often unreliable traditional media.

Television still reaches the single largest group of consumers, more than 700 million across the country but the internet has become a powerful unifying force, at least in urban areas. People discuss their likes and dislikes online more freely than they may in person.

The flipside of this growing freedom is that brands and brand managers are now much more interested in tracking what is being said. This can provide routes to more effective marketing or early warnings of impending crises.

"What are they talking about? What do they say? Are they talking about safety About cost? About customer service?" asked Sam Flemming, co-found of CIC, a company that tracks and analyzes online chats on specific products.

Listening in

CIC has developed software that allows it to track specific strings of conversation. Companies like Nike, for example, use its services to find out what customers like and dislike. Automakers use CIC to find out what the buzz is on their cars and what potential buyers are interested in.

"I can tell you which models had tens of thousands of mentions in the month of August," said Flemming. "We can tell clients how much talk there is. Is the talk good or bad? Where is it happening? Are there… influencers?"

CIC first got involved in this business two years ago after it developed a proprietary software platform specifically to track conversations in Chinese.

"You listen and then, as a brand, you can figure out how to meaningfully participate in this online world where more and more consumers are spending time."

The overall reach of the internet is still limited, but it is limited to affluent urbanites. There may be some 137 million people online – a relatively small number compared to the population of China – but these are the same people that will buy cars and expensive Nike shoes.

"[Some people] look at the numbers and say ‘Oh, only 10% penetration.’ But who sells to the other 90%?" observed Chris Reitermann, China president of advertising company OgilvyOne, which specializes in customer relationship management and interactive marketing.

Of these 137 million, some 50 million are regular users of bulletin board services (BBS) and 34 million blog regularly, according to the most recent official statistics.

"If you watch a news program or a talk show, the inspiration of the show comes from a BBS article, or the TV show will have a BBS where they will publish consumer comments about the show," Flemming said. "At one point last year, two or three of the best selling books in China were written by bloggers."

Television is still the big kid on the block when it comes to the mass market. It reaches five times more people than the internet and it will be many years before it is challenged.

"TV is and will remain a very powerful medium," said Reitermann. "If you’re a national [brand] there is no way around television. But what is happening today is that people are looking for ways to bond with their consumers even more. Every car brand in China advertises on television, but how do you really differentiate yourself?"

You can outspend your competitor, he said, or be very creative, but ultimately it comes down to using as many channels as possible. Television is expensive, although it can confer instant status on a brand. The internet, meanwhile, is invaluable in generating buzz.

In this multichannel world, brands use every tool at their disposal. Television spots may therefore be accompanied by events, sponsorship deals, world of mouth campaigns and, increasingly, internet word of mouth (IWOM) campaigns.

"The internet is… becoming more important for lots of brands," said Reitermann. "Some clients of ours have spent about 30% of their media budget online. Those clients, maybe five years ago, spent 3-4%. You definitely see a huge trend towards the internet."

Several companies have already enjoyed considerable success in China thanks to interactive and online-centric marketing campaigns.

Pepsi leveraged its internet presence into widespread buzz last year when it challenged consumers to design ads for the company. Meanwhile, Motorola’s music download site, motomusic.com.cn, has become the most popular in the country (among legal sites, anyway). It’s no coincidence that handset sales have doubled in the last year. (See: Joining in: Online engagement)

Reitmann believes this is just the beginning. He expects even stronger growth over the coming years as China’s internet and advertising industries converge.

"You’re basically putting the infrastructure in place for online advertising. The way it works now, online advertising is very similar to offline advertising. In the US, you buy a time slot. You pay basically for a thousand people to watch your ad, which you can’t do in China yet.

"This stuff is coming."