Off The Record

Although we only commented on the subject of Chinese media ethics as recently as one month ago (see To Hong Bao Or Not To Hong Bao – That Is The Question), it is time for a follow up post on the subject.  Two reasons compel.  The first is the number of e-mails we received (for some reason no one chose to post their comments on the blog) defending the practice of Hong Bao.  Surprisingly many defenders of the practice are PRO’s at foreign companies including a number of laowais.  The second reason is an article that appeared in The Washington Post of 25 January entitled Blackmailing By Journalists In China Seen As ‘Frequent’, and which has elicited comment on other China-blogs, such as Dan Harris’ excellent China Law Blog under the title The Steep Price of China Public Relations.

Both the number of defenders of hong bao and the rising practice of blackmail by the media are evidence that we in the public relations profession in China are up to our necks in a moral and ethical quagmire.  It is time to extract ourselves from this bog.

Time to wake up and smell the coffee

The defenders of hong bao put forward the argument that hong bao was necessary for two reasons.  The first is that Chinese journalists are paid woefully low salaries by their media organizations making it necessary to supplement their incomes by other means.  Taking the transportation fee – nay, expecting its payment - is, according to the defenders of hong bao, a legitimate practice in these circumstances.  The second reason for the practice is apparently because local PR companies do it and unless we follow suit we will not be able to compete for media coverage.  These defenders of hong bao took solace in that they pay less hong bao than the local PR firms and local companies.

According to them, our argument against hong bao was naïve.  Perhaps this writer is but a virgin in the brothel that is China public relations.  Nonetheless, we should look at their arguments.

First, is it really the role of private companies to supplement incomes of Chinese journalists?  That they don’t get paid well enough is a commentary on the sad state of affairs of the Chinese media market – a market with more media companies and outlets than is justified by the size of the market in terms of advertising and subscription revenue.  With more than 2,000 newspapers, 8,000 magazine titles, 900 TV channels and 800 radio stations, China is well overdue for a media shake-up.  Chinese journalists looking for hong bao and ever-ready to blackmail companies is a direct result of the companies not being able to pay them to be sure.  But what law of business makes it the responsibility of PRO’s to pick up the tab?  Which PRO has justified it in these terms to their finance or procurement departments?  The usual argument goes “it is the custom and we cannot afford to offend the media.”

And if this is a reasonable cause to pay hong bao, it must also be a valid reason for paying lowly bureaucrats such as customs officials a little baksheesh to do their jobs.  Hell, the private sector could take over supplementing the incomes of all underpaid public servants.  A little gift to Betty’s teacher so she pays a little bit more attention to teaching your daughter.  This already happens in Chinese schools while businesspeople and even individuals take sometimes drastic steps to avoid taxes because they feel the government doesn’t provide sufficient public services.  You don’t need to be Aristotle to see how this is getting kind of circular.

Accept the argument of the defenders of hong bao and you’re climbing onto a pretty slippery slope that could get us even more into the quagmire.

The argument that we need to pay hong bao to compete with the local companies who pay even higher transportation fees to the media is almost a non-starter.  Didn’t their mothers ever tell them that two wrongs do not make a right?

If their premise is true, their argument is confused.  Shouldn’t their conclusion be that we need to pay even higher hong bao than the local companies to be able to compete for media coverage?  Because getting the coverage with lower payments doesn’t make economic sense.

Ever considered why Chinese journalists don’t expect or demand hong bao from government agencies or NGO’s?  It’s because they know they cannot and will not pay these fees.  Does the Chinese media still cover the news of these organisations?  Yes.  Why?  Because news is news.  For journalists not covering news, not getting the scoop, would result in a pretty harsh reprimand from editors.

Here again lies the nub of the issue.  Could it be that we pay hong bao because we know we don’t have real news to peddle to the media?  Or perhaps it is that many China PRO’s are not very good at packaging the news for the media.  Maybe it is time to learn our craft better rather than cop out with a payment of baksheesh.

Bribes open the blackmail door

As long as we continue to pay bribes to the media (let’s call a spade a spade: hong bao is a bribe to get the media to at least attend a press conference or interview), it leaves us vulnerable to the possibility of blackmail by the media.  Journalists receive a signal that gets them thinking – “such and such a company is prepared to pay for us to come to an event, so how much will they pay for positive coverage?” The next question is “How much would they pay to avoid negative coverage?”  The answer is “Probably a whole lot more”.

Get the picture.  In case you don’t get it yet, here’s an anecdote.  Some years ago this writer was asked to help extricate a global fortune 500 company from a difficult situation.  They had paid the editor of a magazine US$7,000 for a cover story on the company with a nice colour spread inside.  But the editor of the magazine had come back the following year expecting the same again.  They didn’t want to pay, but the editor had got upset.  Should they have been so surprised to find the editor had come back for more the following year?  The fact is they had established a precedent.

In another case a company was approached by a journalist for an interview.  After the story was published the journalist called up sheepishly wondering where his money was.  Finally the company paid US$1,500 to the journalist – a bit less than he was asking.  The next time he called for an interview the company politely declined.  But were they bound to pay the extortionist in the first place?

Not surprisingly Chinese journalists think many companies are easy marks.  Hong bao opens the door to bigger bribes, then to extortion, and ultimately to blackmail.

The way forward

But there is a way forward.  Refuse to get on the slippery slope.  Or if you are on the slope already, opt off.  It’ll be worth the short-term pain.

Or get together with some like minded PRO’s from other companies and start to place pressure on the China International Public Relations Association (CIPRA) and the All-China Journalists Association (ACJA) to help overhaul Chinese media ethics.  To borrow from Marx (Karl not Groucho) we have nothing to lose but our chains.

David F. D’Alessandro’s Career Warfare: 10 Rules for Building a Successful Personal Brand and Fighting to Keep It is a must read for anyone looking to build career success.  Written by D’Alessadro, along with journalist Michelle Owens, this is a personal Art of War for the modern corporate soldier.  It is particularly suitable for the Public Relations Officer (PRO) as that is where D’Alessandro started his career, climbing the corporate ladder to it’s ultimate height as Chairman and CEO of John Hancock Financial Services.  Indeed D’Alessandro was in large part responsible for John Hancock’s selection by the New York Times as one of the top 100 brands of the 20^th Century.

D’Alessandro knows brand building as his first book Brand Warfare: 10 Rules for Building the Killer Brand attests.

Career Warfare is a masterful book, a compass for those looking to move ahead in their careers.  It is insightful and frank in its advice, drawing on D’Alessandro’s own experiences and observations of those around him, including the many who had the hard skills to get to the top but failed because they lacked the insight to work on positioning their personal brands for success.

The book is a compass more than a road map.  It points the direction.  It looks at what makes the difference as you reach the higher rungs on the ladder where everyone has the hard skills, where everyone excels in capability and accomplishment.  Career Warfare looks at the concept of personal brand and what builds the trust required for ultimate success.

Insightful chapters include:
      Try to look beyond your own navel;
      Like it or not, your boss is the coauthor of your brand;
      It’s always show time;
      Make the right enemies; and,
      Everybody coulda been a contender; make sure you stay one.

D’Alessandro offers the best advice you will get on how to build your personal brand and protect it.  If you only read one career improvement book in 2007, make it Career Warfare.  Then get back to the fray of battle.

* Uma Li is a human resources development consultant living in the United States.  She previously worked in public relations in China. 

While the majority ethnic Han Chinese revere the pig and consider it a symbol of prosperity, Muslims, comprised of several of China’s ethnic minority populations, abhor pigs as unclean animals and avoid eating pork meat.

The decision by CCTV has forced a number of foreign companies to cancel planned TV advertisements, some of which had completed production already and were due to commence airing next month.  The Year of the Pig commences on 18 February.

For Han Chinese 2007 will be the Year of the Golden Pig, which only occurs every 60 years.  This is considered especially propitious and many Chinese couples deferred having a child during 2006 so that their baby will be born in the special year.

Now that
China has decided to be more mindful of its multiculturalism, foreign companies will need to plan their PR and advertising campaigns more carefully, taking into account the sensitivities of the nation’s 56 ethnic minorities and numerous religions.

The latest outcry against inappropriate behaviour on a reality TV show sounds a long-overdue alarm bell for companies hoping to promote and profile brands through sponsorship of these programs.  Key sponsors deserted
Britain’s Celebrity Big Brother program aired on its Channel 4 following a wave of global protests at the racist outburst of British contestant Jade Goody against Bollywood actress Shilpa Shetty.

Effigies of the shows producers were burned in Indian cities and Britain’s Chancellor of the Exchequer, Gordon Brown, on a visit to New Delhi, denounced Goody for her comments.  Britain’s Culture Minister, Tessa Jowell, said the show was presenting racism “as entertainment” and called it “disgusting”.

This is not the first time a reality TV show has resulted in such a chorus of disapproval by the public.  An Australian version of the Big Brother franchise reality TV show fell into disrepute last year when a crude incident resulted in claims of sexual harassment against one of the contestants.  Although no charges were pressed, many were outraged by the vulgarity of the incident.

The problem with many of the reality TV shows shown around the world is that they play to the lowest common denominator in society.  The people watching most of these programs are not looking for uplifting entertainment.  And the shows producers are often trying to create conflict amongst the cast members to ensure controversy.  Contestants for the show are usually selected on the basis of how they will interact with each other – that is to say how they will interact negatively to provide the conflict that will pull in viewers.

Fortunately reality TV in China has not plummeted to the depths of distaste seen in the West.  Not yet anyway.

Companies choosing to sponsor reality TV shows need to consider the controversy factor that is used to drive ratings.  They cannot wander around after an appalling incident has occurred, Groucho Marx-like, uttering that they are “shocked and dismayed to find gambling in this casino”.
 

Casinos were built for gambling and reality TV is made for conflict that appeals to the lowest common denominator.  The best thing corporations can do to protect their hard earned reputations is eschew these shows from the outset.  Pull the sponsorship now and put those marketing dollars into responsible communications programs.

Even within the world of soccer, Becks doesn’t seem to be in the same league as some others – he is certainly left in the dust by legends of the past like Brazil’s Pele, Northern Ireland’s George Best and Argentina’s Maradona; but he’s also not quite in the same league as some of his own contemporaries like France’s Zinedine Zidane or Brazil’s Ronaldo.

So what is the L.A. Galaxy getting for its US$250 million?  No doubt the team coaches and managers know they are not getting a top-rated world player.  It has been some time since Becks was able to claim such honours.  Apart from one goal scored against the Greek team in the 2002 World Cup qualifying matches, Beckham’s performance was lacklustre.  Even his new team of Real Madrid has had him sitting on the bench during recent matches.  And, at 31, Becks is heading into his sunset playing years.  This hardly makes Becks the man to save L.A. Galaxy or invigorate American soccer.

The truth of the matter is base and far away from noble aspirations one may have about sport.  It is about money.  It is about the pulling power of Beckham and the money that L.A. Galaxy hopes to make from the merchandising that will follow.

Probably the best commentary about Becks’ move to Tinseltown is the one by the entertainment writer John Doyle of Canada’s Globe and Mail newspaper.  Doyle argues that the Beckham move is more about celebrity than what Beckham will do for L.A. Galaxy or American soccer.  He says the news angle in the L.A. Times’ reporting of the Beckham move was not soccer but “fame and frivolity”.  The same can be said about most of the other reporting on the Beckhams’ move to L.A.  The media have simply gone ga-ga over the news, with female reporters acting like love-struck teenage girls (“he’s so handsome” commented one female TV anchor) while their male counterparts have focused on the size of Becks’ pay cheque – a case of pay packet envy perhaps.

Sadly, modern celebrity and even stardom is based on neither talent nor character.  Blond hair, good looks and a willingness to do anything in front of the camera seem to be all that is required; just consider the notorious air-head Paris Hilton and others of her ilk who all but grace our TV screens.  Now that the Beckhams are moving to La-la Land, expect to see them in unremarkable and even bizarre TV shows in the near future.  Who knows: There might even be a movie in the offing.

Thank the PR and marketing gurus behind the Beckham phenomenon.  They’ll be in for a cut of the $250 million.  Spin has been replaced by bending it like Beckham.

In the meantime the owners of the L.A. Galaxy soccer team should contemplate the words of baseball great, Babe Ruth:  “The way a team plays as a whole determines its success.  You may have the greatest bunch of individual stars in the world, but if they don’t play together, the club won’t be worth a dime.”  It’ll be interesting to see how Becks fits in with his new team.

And Becks should reflect on some other words of Babe Ruth: “All ballplayers should quit when it starts to feel as if all the baselines run uphill.”  Becks and wife Posh would do the world a big favour by retiring gracefully rather than continuing to inflict their lack of talent and intellect on the rest of us.

____________________________________________________________

* A version of this article by Alistair J. Nicholas, Managing Director of AC Capital Strategic Public Relations, was published by the online magazine Mercatornet.

Although very much Americano-centric, with the possible exception of the chapter on the cheating culture of top sumo wrestlers in Japan, the book has important lessons for Chinese professionals, particularly in the PR industry.

Freakonomics is nothing short of a fast-paced fun read, especially for those enamored of economics, such as this reviewer.  And the chapters on the poverty in which Chicago crack dealers live in the hope of one day being a gangland boss, on the economic incentives for sumo wrestlers and public school teachers to cheat, along with the way the anti-bigotry campaigner Stetson Kennedy infiltrated the racist Ku Klux Klan and lifted the shroud of secrecy on the organization, to turn it into a laughing stock of children’s games are brilliant.

For Chinese professionals the book has important insights such as Kennedy’s use of the mass media – a popular radio show for children – to destroy the Ku Klux Klan.  This was PR at its very best.

Another lesson for young Chinese professionals leaving university with an entitlement mentality is the value of hard work even for low wages just to gain valuable experience that will enable them to get the jobs of their dreams later.  This after all is what motivates Chicago crack dealers who have to live with their mothers to make ends meet in the hope of one day becoming a gangland king.  According to Levitt they are prepared to endure sub-minimum wages and high risks (one-in-four will die a violent death) to achieve their long-term career goals, much as aspiring actors and models do.  Instead of expecting the big bucks immediately, China’s new graduates should take this leaf from the book of Chicago crack dealers.  And at least PR in China is less risky.

But some of the rest of the book is very questionable both in terms of analysis and the morality of the conclusions reached.  For example a chapter arguing that legalized abortion in a number of American States has been instrumental in reducing crime rates has been questioned by other economists.  Christopher Foote and Christopher Goetz for example question the manipulation of data by Levitt and have said “there are no statistical grounds for believing that the hypothetical youths who were aborted as fetuses would have been more likely to commit crimes had they reached maturity than the actual youths who developed from fetuses and carried to term.”

The real problem with Levitt’s work on abortion and crimes rates, though, is that it could lend itself to an argument for the forced abortion of babies of women belonging to a certain socio-economic class in order to reduce crime rates in the future.  This is eugenics pure and simple.  While Levitt certainly doesn’t make the argument for it the fact is his wrong-headed statistical analysis could be come wrong-headed morality in the wrong hands, such as in the hands of those who see man as little more than an economic actor.

This chapter is not worth reading for the economic analysis as it has very little and does even less to further the study of economics.

The final chapter on name selection for babies and future academic and career success is interesting in that it asks the question of whether American blacks are discriminated against because they have “black names” or because the names their parents gave them are associated with lower IQ’s and education.  Chinese hoping to work at foreign companies and choosing what they think are popular names could do worse than consult Levitt’s list of most popular names for boys and girls among America’s elites.

Read Freakonomics for the sheer joy of seeing the study of economics applied to the mundane and even to the bizarre.  But feel free to skip the chapter on abortion as it doesn’t add very much to the sum of human knowledge.   

The article did not mention the impact of the wide availability of counterfeited luxury brands in the market as a possible cause for low sales of genuine product.

 

The article quotes spokesmen from luxury brands who say they are in China for the long haul and that they “are willing to lose money as long as [they] can keep learning about the Chinese market.”  If only companies would afford their executives such luxuries in other markets.

The question then is, what, if anything can be done to address the matter.

A Dream of Red Envelopes

In this post we’re going to focus on the issue of paying journalists hong bao or red envelopes.  Another euphemism used for this practice is “transportation fee”.  The fee is paid to media to attend a function such as a press conference or even a one-on-one interview and can range in price from RMB200 per journalist to about RMB500.  Some companies have been known to pay more to attract senior journalists and editors to events and use a sliding scale depending on which journalist attends.  This writer has heard of amounts as high as RMB10,000 being paid for editors of top newspapers and magazines and producers of leading TV news programs.

The practice of hong bao started in the early days after
China’s opening when foreign companies needed to attract media attention but found they couldn’t get the media to attend as journalists were not compensated by their outlets for expenditure on transportation or their lunch when working outside the office.  Hence, the euphemism “transportation fee” came into existence.  Some years ago the foreign PR firms got together to cap the fee at RMB200 per journalist.  But local firms are known to pay as much as RMB500 per journalist, which is creating pressure for the international firms to increase their amounts.  Rumours abound that some foreign PR firms have started paying more.

The fee is justified by many in the industry on the grounds that it does not guarantee a story; indeed paying the hong bao does not even guarantee a positive story as, on occasion, journalists attending press activities and happily taking the fee have written negative articles about the host company afterwards.  But for the most part it does get the host company at least two column inches of neutral to positive coverage.  The problem is too many PRO’s are satisfied with showing their bosses a fist full of clips regardless of the quality.

But the fact is that the practice remains illegal under Chinese law and under the anti-corruption laws relating to the conduct of international business held by most OECD countries.  That’s why considerable steps are taken by foreign companies in China to cover the payment of the fee.  In most instances it is rolled into the fees of the PR agency so headquarters in home countries need not be aware of it being done.

A simple rule of thumb definition for a corrupt practice might be anything one feels a need to cover up, to hide from headquarters, the company auditors, and/or government authorities.  At the very minimum many companies are breaking their own internal codes of ethics by paying hong bao to the media.

A Way Out of the Mess
The real problem with hong bao is that it is the thin edge of the wedge.  It gives Chinese journalists the impression that foreign companies are prepared to pay for coverage.  And that opens the door to other corrupt practices amongst the Chinese media (which we will take up in a future post).  As pressure mounts for the hong bao fee to go up, it is clear a way needs to be found out of the whole sorry mess.

In Shanghai the cash filled hong bao has largely been replaced by transportation cards to the nominal value of the hong bao.  Shanghai being a modern, sophisticated metropolis has magnetic cards that can be used on the city’s transportation system – on everything from taxis to buses and the light-rail system.  Companies hosting media events have started to use these in place of the insidious hong bao.

While the transportation card is markedly better than handing over an envelope, red or brown, stuffed with cash, it is still problematic.  The problem is that companies trying to attract media to events will be tempted to increase the value of the cards.  They could go from RMB200 to RMB500 to who knows how much.  And then the cards can be transferred to friends and family members – so it doesn’t matter too much how many one receives or for what value.

It would be far better to entirely stop the practice of hong bao.  But how?

As I have often said, the payment of transportation fees will not end until everyone who is angered by it stops doing it.  The problem is no one wants to be the first, to go it alone as it were.  So the industry needs to join together and all players must agree to stop paying the fee.

Not paying the fee will lose media coverage only for the short-term, but eventually the media will need to come back as journalists need to find material on which to file stories every day.  They cannot afford to avoid news events for a long period of time – their editors and owners of their media outlets will not put up with it.

Currently both Chinese and foreign government agencies operating in China do not pay the transportation fee and the media accept that they do not and continue to attend their events.  Likewise, China’s large SOE’s do not pay transportation fees because they know the media cannot afford to ignore them when they have real news to announce.

This writer was impressed recently by a journalist from the magazine Cai Jing who handed back her red envelope to a PR flunkey at an event saying “we’re not allowed to take hong bao; we’re only interested in real news.”

That says it all.  If foreign companies operating in China have real news for the media they don’t need to pay hong bao.  But then, of course, many companies are locked in to paying hong bao precisely because their “news” is anything but newsworthy.  You just can’t have your cake and eat it too.

According to a report in the China Daily of 23 December, passengers flying on Chinese airlines are being told to stop complaining by the nation’s civil aviation authority.

According to the report, the authorities blame poor education of passengers for the high number of complaints received each year.  Complaints cover high prices of food at airport eateries, tasteless in-flight food, lost and destroyed baggage, and poor service by aircraft cabin crew. 

The aviation authorities believe passengers would be more understanding if they acquired an appreciation of the complexities of flying hurtling metal cylinders through the air.  They say safety is the paramount consideration.

That makes me feel much better.  What the heck?  Destroy my baggage and be rude to me during the flight if that’s going to get me to my destination in one piece.

 While it might all seem a little bit odd to foreigners, there’s nothing wrong with trying to localize the festival in some way.  Indeed, Christmas has always subsumed local customs.  For example, climatic conditions in Australia meant sleigh-rides and building snowmen had to be replaced by BBQ’s and cricket on the beach.

But why the need to take such a Bolshevik approach to the whole concept of Christmas?  A clue is provided by one of the Shanghai-ren interviewed by the China Daily.  A Ms. Xu Qian told the paper she was tired of how commercialized Christmas had become and wants to find something different.

Hear, hear to that.  We fully support a more Chinese Christmas and, hopefully, one that finds the true meaning of this festival.  Something worth reflecting on as you walk through China’s shopping malls this festive season listening to “Hark the Herald Angels Sing” and “Silent Night” playing in the background.