Making Sense of IWOMTopic 3:How Brands Can Participate in Online Communities

Nov 2009

© 2009 CIC

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Overview

Do netizens want companies to listen to IWOM

and participate in online communities?

How should companies participate in online

communities?

What kinds of online campaigns will attract

netizens’ participation?

About IWOM White Paper

About CIC

Contents

© 2009 CIC

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© 2009 CIC

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In topics 1 and 2 of CIC’s “Making Sense of IWOM” white paper series, we discussed

how IWOM is playing an increasingly important role in the consumers’ purchase

decision-making process. Consumers not only search for and pay attention to IWOM,

but also generate and disseminate IWOM, building the process of IWOM circulation and

user interaction. However, do internet users want companies to listen to IWOM and

participate in online communities? If so, how should companies participate in online

communities? Which kinds of online campaigns inspire and motivate users to

participate? We will analyze these issues in this latest topic of CIC “Making Sense of

IWOM” white paper series- “How Brands Can Participate in Online Communities”

We have found that with the fast development of the internet, companies participating in

online community not only meet the trend of modern marketing, but are meeting the

expectations of most netizens at the same time. 52.7% of respondents want companies

to pay attention to their conversations about brands and products, while 47.2% of

respondents hope companies participate in online communities and communicate with

them directly. By participating in online communities, companies have the opportunity to

gain immediate insight into consumer preferences and product feedback. Companies

can also identify IWOM issues before they become crises and access ideas for brand

and product improvement. Additionally, participating in communities can improve the

relationship between brands and consumers thus enhance customer loyalty. However,

about 40% of respondents are somewhat indifferent to companies listening to IWOM

and participating in online communities and expressed concern over the sincerity and

motivations of the companies. They doubt companies’ ability to respect and understand

the needs of netizens in order to actually meet their needs. Therefore, companies still

need to further research and identify the most appropriate platforms and approaches for

successfully participating in online communities.

To be more accepted by the online community and its members and create a positive

impact, companies must identify the appropriate online communication platform and

approach. We found that netizens cared most about the “interaction” and “credibility” of

the communication process which should be based on transparency and fairness.

According to our research, 68% of respondents identified third-party BBS as the most

appropriate platform for online communication between brands and consumers,

followed by company BBS on official website (37.3%), company blog on official website

(24.5%) and company blog hosted on a third-party website (10.8%). Netizens

emphasized that openness and transparency are the most important factors when

companies participate with them. Based on these findings, companies should consider

being transparent about their participation and let the netizens know they are in the

community. Moreover, companies should respect the current natural and pure online

community culture.

Overview

© 2009 CIC

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With the rapid development of social media, marketing campaigns have now extended

from offline to online. Therefore, creating an attractive online marketing campaign is one

way to further capture consumers’ attention. Among the seven online activities

presented to the respondents, netizens prefer entertainment-driven activities most,

followed by product experience-driven activities. Therefore, netizens prefer to get

enjoyment out of joining the activities as well as practical rewards or experience using

the product. Incentives play an important role in attracting netizens to actively

participate in online activities. In terms of gender, male netizens care more about the

emotional satisfaction of being recognized during the activity while female netizens

prefer more practical incentives such as financial incentives or experience opportunities.

Based on the research findings and CIC’s long-term experience in IWOM research and

consulting, we have outlined the key elements of online campaigns which drive

consumer participation: creation and innovation, closely related to specific products or

brands, convenient for interaction and low barrier to entry, unexpected findings

throughout the process, and attractive incentives.

Web 2.0 platforms are not only rich and innovative media outlets, but are also

centralized and segmented online community environments. With the evolution of online

communication, internet users are not just passive readers, but have become creators

and disseminators of content. This level of communication has triggered the innovation

of the traditional marketing model. As a pioneer in leveraging internet and new media

for market research in China, CIC has witnessed the development of various internet

media in China. At the same time, CIC has built long term partnerships with many

industry leaders to provide them with strategic marketing solutions based on internet

marketing intelligence. By growing alongside clients, CIC is able to help them “listen”,

“know” and “participate” with consumers in the online community which are reshaping

the relationship between brands and consumers, thus finding a win-win strategy for both

brands and consumers.

Overview

© 2009 CIC

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In Topic 4 of last year’s CIC “The Internet is THE Community” IWOM white paper series

“Reshaping the Relationship between Brands and Consumers”, we mentioned that “The

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.” Now,

forward-thinking companies have recognized the importance IWOM plays in reshaping the

relationship between brands and consumers. They have successfully increased brand

awareness and improved their reputation by listening to IWOM and interacting with

consumers in online communities. Their success also proved CIC’s IWOM insights. Then

what do netizens think about companies’ listening to IWOM and participating in online

communities?

We found that 52.7% of netizens interviewed responded positively to the idea of

companies listening to IWOM. In particular, they hope companies listen to their

discussions about brands, products and services. 43.4% of respondents are indifferent to

companies listening to IWOM. While only 3.9% of respondents don’t want companies to

listen to IWOM.

Do netizens want companies to listen to

IWOM and participate in online communities?

Data source: CIC, 640 BBS/Blog users

Figure1 Netizens’ attitudes towards companies listening to IWOM

© 2009 CIC

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To delve into the reasons behind netizens responses, we conducted focus group interviews

with online community users in different cities. We found that the 52.7% of users that

responded positively think that it is of great value for companies to understand consumers’

feedback towards brands and products, in a timely manner, thus improving their products

and services. They mentioned listening to IWOM is also necessary for companies to identify

IWOM crises and maintain a positive brand image. Netizens with an indifferent attitude

towards companies’ listening mentioned they had no way of knowing if companies were

listening to them. Besides, they expressed doubt that companies would actually respect

their needs and thus take action to improve their products or services. The netizens with a

negative attitude mentioned that online communities are their private places for

communication and do not want to be disturbed by companies.

Sample quotes

“When I have questions about products, I wish there was someone

from the company that could give me suggestions and solve my

problems.”

“There is indeed much room for improvement, and if the companies

don’t find out what needs to be improved the progress will be very

slow. Most of the IWOM in online communities is real since most

people won’t waste time writing fake messages.”

“A company’s integrity and overall quality will show by its response

and reaction to negative posts.”

“Companies should listen to IWOM, but I am not sure whether it

impacts the company’s decisions.”

Do netizens want companies to listen to

IWOM and participate in online communities?

© 2009 CIC

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Most netizens are open and welcome to the companies listening to IWOM. However, how

do they feel about companies participating in online communities? We found that 47.2% of

respondents do want companies to participate in online communities so that they can

communicate with the companies directly. 40.6% of respondents do not care whether the

companies participate in online communities or not. And finally, 12.2% of respondents don’t

want companies to participate in online communities. Therefore, while the majority of

netizens are positive towards company participation in online communities, overall, the

responses were still somewhat conservative.

Figure 2 Netizens’ attitudes towards companies participating in online communities

Data source: CIC, 640 BBS/Blog users

Do netizens want companies to listen to

IWOM and participate in online communities?

© 2009 CIC

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Why do netizens feel this way? Through our focus group interviews, we found that the

netizens who responded positively to companies’ participation think users need to

communicate with companies directly to solve problems both pre and post purchase. These

respondents felt that companies that communicate with netizens are more credible and are

preferred by consumers. While netizens with an indifferent attitude were concerned about

the sincerity of companies participating in online communities and worried that they would

simply mislead them to make purchase decision through disseminating exaggerated or false

information. They felt this type of activity would destroy the purity of the online community.

Additionally, some netizens were concerned about companies’ ability to spend sufficient

time in online communities, thus hurting their feelings by appearing indifferent and

inattentive.

From the analysis above, we can see that most netizens want companies to listen to IWOM

and participate in online communities. They think it is necessary for companies to further

understand consumers’ needs and enhance consumer loyalty. However, they are still

concerned over the sincerity of companies and the actual impact of the companies’

participation. They feel companies still need to evaluate the best ways for understanding

netizens’ needs and online community culture as well as how to best participate. While

these concerns are the great obstacles that hinder consumers to accept their participation.

“At least it shows the integrity of a company. Because if a company

recognizes the need and takes action to participate, that’s better than

others. When making a purchase decision, I will consider this a priority.”

“If the participation is sincere and its products are of high quality, I think I

can accept the company’s participation in the community.”

“The company will always introduce the most expensive products that

will give them the highest profit rather than the ones that really fit you.”

“I will be so hurt because the company will act indifferently towards me.”

Sample quotes

Do netizens want companies to listen to

IWOM and participate in online communities?

© 2009 CIC

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Data source: CIC, 640 BBS/Blog users

To participate in online communities, the first step is to build an appropriate online

communication platform. With the move from web1.0 to web 2.0, companies started to

notice that the netizens are more willing to express and share their own opinions, rather

than just read information. As a result, companies started to build online platforms for

consumers to express their opinions freely. Over the past few years, more and more

companies have launched official blogs or BBS on their own website or join third-party

websites to communicate with netizens. According to CIC’s research findings, netizens

like to communicate on BBS over blogs. In terms of BBS, netizens prefer third-party BBS

to company BBS hosted on official websites. However, in terms of blogs, the result is

opposite. Netizens prefer to communicate on a company blog hosted on an official

website rather than a company blog on a third-party website.

Figure 3 Netizen’s preference to different online platforms

How should companies participate in online

communities?

© 2009 CIC

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Why do netizens’ preferences vary across different communication platforms? Through our

research, we found that netizens think BBS is a better platform for interaction than blogs.

Besides, they are more familiar with using BBS than blogs. Furthermore, blogs can be

easily utilized for pushing products or advertisements thus becoming similar to an official

company website. As for BBS, third-party BBS are considered more objective and

approachable than company BBS on official websites because it is managed by an

independent party. Netizens feel more free on third party BBS to express their opinions and

communicate with brands on an equal level. In terms of blogs, netizens feel that blogs

represent the official voice of the company, so the blog articles released on official website

are found to be more credible than those released on a third-party website. We also found

that blogs created by the fans of brands are more attractive than the official blog since they

include real product experiences and are therefore more credible and interesting.

Overall, we found that regardless of the platform, netizens are most concerned with the

level of interaction with the brands and credibility of the information, and in particular, that

brands are fair and transparent when communicating with them.

“The official company platform is too driven by company interests

while the third-party platform is more objective because it is managed

by an independent party.”

“It is easy for a blog to become a personal stage for the company, so

BBS is better.”

“I am worried that negative posts will be deleted and IDs will be

forbidden on official company BBS.”

”Many Apple fans will upload product related articles on their own

blogs. Most of the information in official company blogs can also be

found on company website.”

How should companies participate in online

communities?

Sample quotes

© 2009 CIC

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After understanding netizens’ communication platform preferences, we evaluated their

opinions toward how companies participate. According to our qualitative research findings,

netizens prefer companies use relatively formal expressions when communicating with

netizens and avoid using either an arrogant official tone or an overly casual manner with net

language. However, most importantly, companies should be transparent about their

participation and let the netizens know they are in the community and willing to

communicate with them. Regarding complaints or questions about product quality,

companies should respect each netizen and give specific and useful advice objectively.

When clarifying a question, companies should try to use reliable data to support their advice.

In addition, companies should respond in a timely manner in order to create and maintain a

positive brand image.

“Using relatively formal expressions is important to ensure the

professional and authority of the brand. Expressions that are too

official will sound too sales-oriented while using too casual net

language will create a sense of a lack of authority. It is better to be

friendly, sincere and humorous at the same time.

“Companies should give useful and valuable advice. Do not copy

paste or auto reply, or ask customer service. There should be one

person that gives specific replies to questions, or gives formal replies

to similar questions.”

“Reply in time, within 24 hours. Give timely replies to whichever

products the netizen is asking about, regardless of whether they are

cheap or expensive.”

“Use reliable support when clarifying complaints. It is not enough to

just have the company validate the quality. It should provide third-

party proof.”

How should companies participate in online

communities?

Sample quotes

© 2009 CIC

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In the past few years CIC has provided various kinds of consulting services on IWOM

participation for international companies. We have summarized the following principles as

important when participating with consumers online. (Figure 4)

In summary, to gain acceptance within online communities and win over its members,

companies should be honest and fair when communicating with consumers. Most

importantly, companies should be transparent about their participation. When

communicating with netizens, companies should use formal yet friendly expressions and

be cordial. In addition, companies should respect the independence of netizens and their

opinions as well as help to solve their problems and respect their different needs.

Furthermore, companies should not disturb the health and purity of online communities

and its culture.

Figure 4 E-Community Participation Principles

How should companies participate in online

communities?

Be transparent and let netizens know that you are

participating in the community.

Use a friendly tone when communicating

with netizens. Try not to cheat consumers

or be too arrogant.

Try not to publish false information or

advertisements in the communities in order to

maintain the purity of the conversation.

Respect efluencers’ independence and

freedom of speech. Don’t delete negative

information or try to mislead netizens.

Be fair to the netizens and give reasonable and

reliable explanations in response to complaints.

Don’t shirk responsibility and cover the truth.

© 2009 CIC

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Choosing the appropriate online communication platform is a good start to participating in

online communities. But in order to attract netizens’ attention and bring more value to the

brands, companies need to interact with netizens directly and they can do this through online

campaigns. With the rapid development of the online community, online activities are

becoming more and more important in marketing initiatives. As the leader in IWOM industry,

CIC releases “IWOM watch” regularly to analyze the trends and dynamics in the IWOM

industry. The following case study of Lancôme’s recent “Pink Lady” competition is a

representative example taken from a recent CIC IWOM watch report.

Lancôme “Pink Lady” campaign: In April, Lancôme leveraged the popularity of SNS site--

Kaixin to launch their online beauty contest campaign "Pink Lady". The purpose of the

campaign was to promote and encourage users to join Lancôme’s fan group in Kaixin. The

beauty contestants were voted for by Kaixin users. In the voting process, the candidates

were recommended to the voters’ friends in order to gain the most supports. Lancôme

interacted with the users to provide skin-type tests or share beauty knowledge. Besides, both

the successful candidates and their referrers received rewards from Lancôme. In total, more

than 10,000 netizens participated in the campaign, with the vote count reaching over two

million. Finally hundreds of thousands of netizens joined Lancôme fans group. Through the

campaign, L’Oreal successfully built a broad consumer foundation and online platform for

brand communication.

Case source: CIC, IWOM watch, 2009 first half year edition

What kinds of online campaigns will attract

netizens’ participation?

© 2009 CIC

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Attractive online campaigns can strengthen brand awareness by targeting

specific consumers and interacting with them, as well as allowing

consumers to interact with each other. This new way of communication is

effective for increasing brand awareness and promoting new products.

There are different categories of online campaigns such as entertainment

driven activities, experience driven activities, event-driven activities and

the like. But which of these activities motivates netizens to participate?

Based on the findings of our quantitative survey of 640 BBS/Blog users

(Figure 5), we found netizens prefer entertainment-driven activities the

most. They want to derive enjoyment from joining these activities.

Product experience driven activities are also welcomed by netizens,

especially when combined with products, branding and corporate culture.

Netizens responded favorably to opportunities to receive free product trials

and try products prior to making purchase decisions. However, the

participation rate of product experience activities is still relatively low, so

there is still potential for brands to explore new ways for designing and

implementing these types of activities. Additionally, event-driven activities

are also welcomed by netizens. Since it is connected with specific events,

it is easy to attract sympathetic responses from netizens thus forms a

trend for a period of time. By associating with events or issues that the

consumers are already passionate about, brands can tap into the

emotional needs of consumers and attract much attention. In all, company

should consider both the entertainment value of the activity as well as its

overall contribution to netizens. The L’Oreal “Pink Lady” competition is a

good example that combines both fun and value.

Note:

Entertainment-driven

activities: interacting with

netizens through

entertainments, such as wining

rewards through playing games,

and uploading photos or videos.

Event-driven activities:

related to specific events or

causes, such as the torch relay

for Olympic, signature for

environment protection.

Lottery-driven activities:

interacting with netizens by

hosting a lucky draw, such as

offering prizes for completing a

questionnaire, registering for a

membership or answering

questions.

Product experience activities:

product related experience,

such as trying new products,

testing new cars, etc.

Communication-driven

activities: interacting with

netizens directly by joining

discussions in online

communities using videos,

online chat or posting

messages.

Knowledge sharing activities:

interacting with netizens through

knowledge sharing, such as

practical information about car

maintenance or taking care of

babies.

Creation-driven activities:

interacting with netizens by

collecting original content from

netizens, such as ideas, videos

or slogans.

Score 1: dislike extremely

Score 5: like extremely

What kinds of online campaigns will attract

netizens’ participation?

Entertainment-

driven

activities

Event-

driven

activities

Lottery-

driven

activities

Product

experience

activities

Communication-

driven activities

Knowledge

sharing

activities

Creation-

driven

activities

Data source: CIC, 640 BBS/Blog users

Figure 5 Netizen’s preference to different online activities I

© 2009 CIC

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In terms of gender, female respondents preferred product experiences and event-driven

activities, while male respondents had more passion towards communication-driven

activities and lottery-driven activities. In terms of age, netizens between the ages of 15 and

35 prefer entertainment-driven activities. However, netizens between 36 and 60 prefer

product experience activities. As a more mature and experienced group, they care more

about activities that help them make educated purchase decisions. Breaking it down

further, netizens between 15 and 17 are passionate about all types of activities except for

event-driven activities. This group is curious about a variety of online activities and is more

passionate about participating overall; netizens between 25 and 30 showed the lowest

passion across most types of campaigns except for entertainment-driven and product

experience activities. Based on these findings, this group reacts more rationally in most

campaigns while only have passion on particular ones.

Data source: CIC, 640 BBS/Blog users

Figure 6 Netizens preference to different online activities II

Score 1: dislike extremely

Score 5: like extremely

What kinds of online campaigns will attract

netizens’ participation?

© 2009 CIC

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Online activities contributing fun and value are preferred by most netizens. In order to have the greatest

chance of attracting them to actively participate, companies may also want to consider offering attractive

incentives. But what kinds of incentives attract netizens’ to participate in campaigns? From Figure 7

below, we can see that generally economic rewards attract netizens the most, while the opportunity to

join offline activity ranks second. In terms of gender, male netizens care more about the emotional

rewards such as the satisfaction of being recognized during the activity. Female netizens prefer practical

rewards such as cash, gifts or opportunities to participate in offline activities. In terms of age, netizens

from 15 to 17 care about practical economic incentives, online virtual rewards as well as meeting

celebrities; netizens between 25 and 30 show the lowest interest in opportunities to join socially activities

compared with other age groups; while those between the age of 31 and 35 not only care about

knowledge sharing, but are also willing to make friends; Netizens over 35 care about knowledge sharing

but are less interested in making friends. Therefore, to motivate netizens to participate in online activities,

companies should consider the preferences of different consumers and design the incentives based on

their target consumer.

Data source: CIC, 640 BBS/Blog users

Figure 7 Netizens preference to different rewards of online activities

What kinds of online campaigns will attract

netizens’ participation?

Score 1: dislike extremely

Score 5: like extremely

© 2009 CIC

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We combined the above findings on consumer activity and reward preferences with CIC’s

client experience, to summarize the key elements of online campaign preferred by

netizens. (Figure 8)

Figure 8 Key elements of online campaign preferred by netizens

What kinds of online campaigns will attract

netizens’ participation?

© 2009 CIC

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This is just a general analysis of online communities and its members’ preferences. In

reality, online communities are much more complicated, especially when comparing

across different industries and categories. It is important to understand the online culture

of the target industry and category, in order to build a solid foundation for communication

and interaction. Therefore, there are many challenges to participate in online communities

and implement influential online activities. As a pioneer in leveraging internet and new

media for market research in China, CIC has witnessed the development of various

internet media in China. At the same time, CIC has built long term partnerships with many

industry leaders to provide them with strategic marketing solutions based on internet

marketing intelligence. By growing alongside clients, CIC has accumulated rich

experience in online communities across different categories and industries and has a

proven research methodology and model. CIC will continue to accompany its clients and

help them to understand the Internet’s unique culture and find potential business

opportunities thus bringing more value to both companies and netizens.

What kinds of online campaigns will attract

netizens’ participation?

© 2009 CIC

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About IWOM White Paper

About CIC IWOM White Paper

In the past five years, CIC led by our Intelligence Center has continued to share

our latest research and findings about IWOM in China with industry clients and

friends. Based on our insights and experiences from working in the Chinese

IWOM research industry for almost 5 years, our CIC IWOM Whitepapers also

incorporate thinking from areas such as marketing communications, IT, sociology

and statistics. In publishing these whitepapers we aim to create a resource which

monitors and catalogues the developments in the IWOM industry and in doing so

helps to move the whole industry forward as a result.

From last year’s IWOM Whitepaper series titled the “Internet is the Community” to

this year’s series titled “Making Sense of IWOM,” we have shown how powerful

the Internet and IWOM is in reshaping the relationships between brands and

consumers and that consumer comments have now become the key factor in

influencing purchase decisions.

For more information about the Chinese Internet and the rapid development of

IWOM in China please visit iwommaster.com or our blog seeisee.com, or to see all

our previous whitepapers please visit our slideshare site.

About “Making Sense of IWOM” White Paper series

This research, conducted by CIC, is the first of its kind in China and is based on

comprehensive qualitative and quantitative offline research in Beijing, Shanghai,

Guangzhou and Chengdu, whose survey results include feedback from 640

BBS/blog users, 8 focus groups discussion and 32 in-depth interviews with

efluencers.

CIC will leverage these results and combined with its unique and leading

perspectives on Chinese IWOM development, to create a total of 3 in-depth

installments including “the Role of IWOM in Purchase Decisions”, "How IWOM is

generated and disseminated" and “How Brands Can Participate in Online

Communities."

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About CIC

CIC is the thought leader in Internet Word of Mouth (IWOM) with over 4 years

experience in China working with cutting edge clients across multiple industries

on a retainer basis. With a proven approach and case studies, CIC is the first

and best option in China to help clients make sense of the buzz. CIC coined the

term IWOM and has pioneered the concept of IWOM, redefining the relationship

between brands and consumers. 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 its company blogs, in its IWOM white

papers and IWOM watch reports and through its IWOM roundtable events such

as IWOM summit and IWOM classroom.

CIC offers customized and syndicated reports as well as an industry leading

IWOM analytics dashboard which is 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 an unique, powerful and

open mindset and learning culture which at its foundation continually seeks to

understand how the Internet, and IWOM, is redefining the relationships between

brands and consumers.

For more information, please visit

• www.iwommaster.com (CIC IWOM master intelligence service platform)

• www.ciccorporate.com (CIC website),

• www.seeisee.com (CIC Company blog in Chinese)

• www.seeisee.com/sam (CIC Company blog in English).

Address:

Room 108, Building A, UDC Innovative Plaza

No.125, North Jiangsu Road

Shanghai, 200042, China

Phone: 021-52373860 / 61 / 62 / 63

Fax: 021-52373632

Email: info@cicdata.com

© 2009 CIC

This report is copyrighted material owned by CIC. Any improper use of this

document or its content will be considered a violation of CIC IP copyright

and CIC has the right to take legal action.