The China Vortex

Following the Sichuan Wenchuan earthquake, it has been very interesting to watch how the Chinese government and people have reacted, and how many western observers have reacted. For the first time in Chinese history, the Chinese government has ordered that Chinese flags have to be lowered to half-staff, for three days from May 19-21. What is most significant, is that this is the first time that the flag has been lowered for ordinary civilians in Chinese history, ever.

China has always had a larger population than other countries, and the country has had very bloody periods in its history. Some 20M Chinese were killed in the 19th century during a civil war, the Taiping Rebellion, and possibly another 20M were killed in WWII, when Japan invaded China. Millions also died because of bad political policy decisions in the 1950s and 1960s, which reached their culmination in the Cultural Revolution.

Unlike in Washington DC, where you can find war monuments to Americans killed in WWII, the Korean War and the Vietnam War, there are no war memorials to Chinese soldiers or civilians killed in these wars, or to any who died as a result of bad government policy decisions. For the most part, they have just become unknown individuals who died and are now forgotten.

This is why the decision to lower the Chinese flag for ordinary civilians is so different and marks a break with the past. For the first time in its history, the Chinese government is saying that it is OK to mourn for ordinary civilians. This did not happen during the Tangshan earthquake, which killed some 450,000 civilians in 1976, or in 1989, or even so much during the SARS crisis of 2003.

For the first time, a Chinese government has embraced the idea that any human life, even that of ordinary human lives, has value. Actually, this is a very western concept, and is a very important step on the road to democracy. Is this not a valuable change in China’s reforms and opening up? This will make it that much more difficult for any Chinese government to dismiss the value of any Chinese lives which are lost in the future, whether they are due to natural disaster, or war, or for political reasons.

The Chinese government and party have activated their media, and issued an edict that entertainment websites should shut down over the next three days, entertainment programming should be curtailed, along with three minutes of mourning each day.

This move immediately attracted strong criticism from many members of the Twitterati in the US who, to put it frankly, have embarrassingly little understanding of China, and continue to see China in over-simplified black and white stereotypes, as you can see in this feed from Robert Scoble’s Friendfeed account.

When I think that the people who have Friendfeed accounts represent smart, well-educated, tech-savvy people, and they say these things, I just get depressed. The stereotypes and distrust of China just run so deep.

I get a very different view simply because I read Chinese, and I know what many Chinese say and think on the Internet, where people have much more latitude to express themselves than on TV and the print media. Sure, the government has an agenda and is spinning and exploiting this to make themselves look good. And in some ways, they are doing it in a clumsy way. But the government is now accountable to protect the lives of ordinary Chinese.

After 9/11, the US government claimed all kinds of special powers, including surveillance wiretaps, the need to kidnap and torture terror suspects, and the need to invade Iraq because the government of Saddam Hussein had weapons of mass destruction, and the government needed to keep these weapons from falling into the hands of terrorists. If there is one thing we can learn from all tragedies, it is that all governments have agendas, and they will exploit every opportunity to push their agendas in the event of a tragedy.

But it does not mean that the original intent should be completely dismissed out of hand as the actions of a dictatorial regime.

Maybe I’m asking too much, but can some people, Americans especially, try to look at China through the eyes of the Chinese, and not always try to scare and frighten other Americans into asking what the “rise” of China means to the US and the west? Is it too much to think or ask that maybe, just maybe, Chinese don’t spend everyday plotting how to steal their jobs and turn America into a third-world economy? And that maybe, they are just ordinary people who are trying to get along in life, and raise their child and get him/her in a good school, and buy a house? And that the government is far from perfect, but it has allowed ordinary Chinese to have a much better standard of living than before, and is now, for the first time, beginning to care for and mourn the loss of ordinary civilian lives?

There’s a very simple rule: If you reach out and treat people like friends, they tend to act like friends, and if you treat them suspiciously, they become enemies.

In the beginning, it’s hard to reach out and trust people you don’t know well as friends because they seem so foreign and different, but it’s always works out better in the end.

UPDATE 5/20/08: I was interviewed by Christine Lu of China Business Network about this article and you can read that interview here. This article is also referenced in a blog article for the Guardian (UK).
EastSouthNorthWest has an article about how the Central Publicity Department, which is a Chinese government and party organ in charge of making sure that the official line is carried in the Chinese media, dealt with the earthquake crisis.

Technorati Tags: China, democracy, earthquake, internet, media, mourning, print, sichuan, TV, US, wenchang, western

There is a whole brave new world for social marketing which is unfolding and which, so far, has caught many businesses off-guard.

A good part of the reason for this is because many corporate marketing departments are managed by people who cut their teeth when TV, radio and print were the main ways to reach audiences.

Sam Flemming, who is the founder of Shanghai-based CIC, a market research and consulting firm which covers brand buzz in China, has posted an article on how online trends will affect how agencies will think and work.

Based on my experience working in traditional media and then online in China, I think that online users are about 2-3 years ahead of online users in the US. This is because the Internet developed without the help of advertising income in its early stages, unlike in the US where advertising was a very established model. For this reason, it is much easier for Chinese consumers and advertisers to adapt. In China, there is much stronger tie-in between offline events and online promotions, instead of just relying on online advertising as in the US.

US corporations and advertisers have to “unlearn” much of what they have thought would work in the new online space.

One of the big questions is that agency account people will have to learn to become advocates for their brands and products both offline and online. Where does the agency and customer advocate line end and begin? It’s easy to see that in the very near future the best agency account people will be those who are the most passionate and eloquent advocates for a product, and can exercise good judgment quickly. Those who succeed will be the ones who can go from strategy to tactics very quickly, while keeping the client clear about overall goals and weaving through the intricacies of the online conversation.

One book which is going on my “to read” list is Jump Point, which talks about how marketing to the interconnected online crowd is going to work.

Technorati Tags: advertisers, advertising, brands, China, cic, corporations, events, iwom, marketing, media, offline, online, print, promotions, radio, samflemming, TV, US

When I read the first few paragraphs, I thought it might be a joke.

It read: “Oxford university’s latest professor is a top Chinese expert on mathematical finance who aims to understand how markets are affected by traders’ gambling and irrational risk-taking.” This was followed by: A new chair has been created for Xunyu Zhou at Oxford’s Nomura Centre for Mathematical Finance. Prof Zhou started his career at Fudan University, Shanghai, and he has spent the past 14 years at the Chinese University of Hong Kong. Prof Zhou has recently developed mathematical models of financial trading in uncertain environments. At Oxford he aims to focus on the way psychology and emotion affect decision-making and risk control. “It is fascinating to see how mathematical theory can bridge the gulf between finance and social science,” he says.

But when I saw that it was on the technology page of the Financial Times, I took a double-take, and assumed that it might be serious, or at the very least, half-serious.

Given my recent interest in blogging about risk and how it is viewed fundamentally differently by US and Chinese businessmen, I thought that it would be good to bring this matter to the attention of my readers.

Prof. Zhou’s background in Shanghai is a good place to study risk. After all, it is home to the Shanghai stock exchanges, which are well-known for their, ahem, volatility. Anyone who has even the most passing understanding the Shanghainese know that the chosen avocation for Shanghainese over 50 is to talk about the stock market, especially what’s going up and down in the market. Fifty nine years of “socialism” has not been able to change that. By the way, technical analysis is big among Shanghainese; even cleaning ladies understand it and follow it. Then there are all the technical heads of TV, and now Internet served video, where you can get any technical analysis of any share traded in Shanghai.

If you want to start any conversation with any Shanghainese, all you have to do is say something like “Let me tell you why you should sell all your holdings in (fill in any SHA traded share here) NOW!”, regardless of whether you know what you are talking about or not. As a matter of fact, I know of some non-Shanghainese who use this methodology as a pickup line; it never fails.

So I was kind of wondering if I really needed to go to Oxford to get all that.

Of course, if Oxford really wanted to get serious about studying risk in China, then they should go to Macau. Maybe the Venetian would sponsor a chair for that?

Technorati Tags: business, China, fudan, Hongkong, internet, macau, mathematics, oxford, risk, shanghai, shares, stocks, TV, video

I have spent a lot of time recently thinking, writing and researching on the implications of the Internet (hence my sparse article posting; my apologies) and what that means for how people do things in a corporate setting.

The most important takeaway so far is that blogging and the Internet will accelerate the death of corporatespeak. By “corporatespeak” I mean the gargled and mangled language which comes out of public relations agencies in the form of press releases, and which sometimes make it into mainstream articles in magazines and newspapers. This is the stuff where a company tries to preserve and protect its “corporate image” and speaks with authority to its customers, and ends up sounding like a robot because the message has been run through corporate communications and the legal department to insure that the company won’t get sued for any claims it makes. Ad agencies spend a good part of their time undoing corporatespeak in order to get the company message through to consumers in a way which sounds like there are actually human beings on the corporate side.

Even though I come from a marketing background, I have really hated corporatespeak with a passion, which is an important part of why I like the Internet. For me, the Internet is about facilitating asynchronous conversations. It allows me to meet people I have never met before, and would never have the opportunity to meet before if the medium had not existed. For instance, just yesterday, I connected with a group of IT professionals in France who enjoy reading this blog. It was good to know that there are people in France, and maybe other countries, who enjoy the content of this blog. The Internet is like a huge room with many small groups of people chatting away. If you are polite and friendly, you can walk up, introduce yourself, listen and contribute to the conversation. Then, when you want, you can say thank you, and move on to another conversation.

And the neat thing is that these conversations need not be going on at the same time.

Now, marketing and corporate communications departments are wondering what to do because they have been set up to “protect the corporate image” and “protect the management” respectively, and really don’t know what their new roles are. It takes a new kind of corporate communicator and a new kind of marketer to say “My job is to engage with the customers (or shareholders) in a new kind of one-on-one conversation” when that is not what they are used to doing.

It takes a certain of confidence and good judgment to engage in conversation. They can’t be corporate drones anymore; that way doesn’t work in this new world.

Did you know that corporate CEOs are human beings too? It would be really good if some of them expressed their thoughts online, without having to worry about getting spammed, etc.

One of the things I have noticed in China which is very different from the US is the huge number of people always in bookstores, especially the larger ones. Many Americans like to get their information from radio and TV and think of reading as a chore. I have never understood this attitude; I prefer reading to radio and TV. Words and text in an article expose how a person thinks, and how they analyze a problem in a way video and audio do not. It goes deep while television, especially in the US, is all about sound bites. It encourages shallow thought, which leads to (surprise!) shallow behavior.

This is why sometimes, when asked to comment on a given subject on radio or TV, I say no. If I feel that I cannot add something new, or a deeper viewpoint which people can think about later, I prefer to keep quiet. If I want to offer a viewpoint which will make people think a little longer and deeper, then an article is the best approach.

The great irony about the Internet is that it encourages the development of a whole new set of soft skills. Traditional advertising stressed divisions along media; now those divisions no longer exist. People have a whole smorgasbord of media available and they don’t divide along media lines; they divide according to where the content is and what is most convenient for them at the time.

The new soft skills will stress:

• How to converse intelligently with people, one on one, even in asynchronous conversations;
• How to listen to people and use that information to get insights;
• How to handle a difficult or bad situation and turn it into a good situation;
• How to keep the conversation going and add to it from time to time;
• Being proactive all the time;
• And maybe most importantly, knowing when not to say anything

Marketers and advertisers being able to have intelligent conversations? What a revolutionary idea!

If you will excuse my initial sarcasm, that is exactly what is needed. In writing, I have found the greatest challenge to be finding a voice I’m comfortable with. Now it’s easy.

The new advertisers and communicators will have to be able to think this way too.

It will be interesting to watch how this all develops…

Technorati Tags: advertising, ceo, China, communications, corporate, legal, marketing, media, radio, reading, TV

Readers know that I have spent quite some time thinking about how the Internet and online advertising will affect the whole overall advertising industry. A recent post on Ogilvy China Digital Watch made me think more about how some of the changes the rapid rise in online advertising spending will affect the advertising industry as a whole.

The advertising industry grew at a time when the divisions and demarcations between different media and media audiences were very clear (TV, radio, print and below the line advertising). It was a good business, and permitted the ad agencies to buy large amounts of media, then resell it to their advertisers, while offering other services (creative, PR, direct mail, etc.) on top as value-added services. Advertising could be divided into brand advertising for global brands and more targeted ads for small local clients. All in all, it was a good service business with healthy margins.

That whole business model has been blown apart with the Internet, and ad agencies are adjusting to the changes. These changes are just starting, and will ripple out to affect other services as well.

The single greatest change brought by the Internet is the shortening of the business cycle. People have more things to do, which means that they need to make decisions, even important decisions, in much shorter time cycles. This means that if they want to find out something about a product/service, they want to know it in as short a time as possible.

This has been enabled by search, a business which Google has built to near-perfection. Add advertising to search results, and you have the Google money machine. Advertising appears in a welcome context instead of being disruptive.

Search advertising has had some negative effect on brand advertising because it is possible, in a very short time, to find out what others are saying about a given product or service. This is not the line from the corporation, but what other buyers are saying. More disruption of the communications process.

The immediate effect for ad agencies is that their whole time-cycle has been disrupted. Instead of the normal annual budgets and precious planning time which goes into big-budget ad campaigns, more corporate attention is going to fighting fires, which usually fall into the PR realm. The agencies are trying to protect their creative and media teams from this hyper speed development cycle in-house, but it is impossible to control what is happening on the advertising client’s side, who is getting continuously distracted by what sounds like noise and chatter.

What is the ad agency to do in order to adapt and survive?

First of all, it is necessary to tell the clients that it is no longer possible to control the message to the customers. The customers are talking back, and there is no way to tell them to shut up. A lot of the customer feedback is noise, but there are also very valuable pieces of information in there.

There is a need for a new kind of ad agency warrior who can go out there and slay the dragons , and collect the valuable information and give it back to the creative teams and client so that they can act on that information in its product and marketing cycle.

Here are my draft job requirements for an ideal candidate:

• Information researcher, able to use Internet and mobile tools to monitor client-relevant information in real-time;
• Able to engage with client at all levels (executive and manager) to understand evolving client needs, and to report in real-time on rapid changes in market situation;
• Able to understand client’s corporate position and voice, and act as a responsible spokesperson and advocate in the digital realm while upholding client’s integrity;
• Understands how to communicate to different clients on different levels and is able to quickly adjust accordingly
• Can quickly analyze and learn and communicate this information back to creative and media teams and back to client on a frequent basis;
• Proactively pushes out information to other team members and clients for their use;
• Comfortable working with amorphous teams which are changing on a constant basis;
• Is comfortable communicating in at least two human languages;

Requirements:

• More than two years’ blogging experience, including acting as an advocate for a product/service;
• Knowledge of SEO tools and terminology;
• Understanding of corporate structures and organizations and how they work, and how to get things done in them;
• Must love doing things fast and independently

Notice that I didn’t include academic credentials? I told you that we needed a new kind of ad agency warrior, didn’t I?

Technorati Tags: advertising, agencies, brand, digital, directmail, google, internet, ogilvy, PR, print, radio, search, TV