Arun Sudhaman 06 Oct 2012 // 11:00PM GMT
NANJING--Siemens is poised to bring in new PR support in China as it deals with the fallout from a protracted online crisis.
BSH, the $13bn global joint venture that manufactures Siemens-branded home appliances, is understood to be nearing a deal with Ogilvy PR.
The company’s public relations business in China was previously handled by domestic firm BlueFocus, which confirmed that the relationship has ended.
BSH made the decision after suffering from a long-running online campaign from a prominent user of Sina Weibo, the microblogging service that is transforming a traditionally opaque approach to corporate communication in the country.
After making several complaints about a defective Siemens fridge, Luo Yonghao organised a group of consumers to smash their fridges outside the company’s Beijing headquarters last year.
BSH China initially did not respond to the protest, before apologising and reiterating that the problems were not of the company’s making. Luo smashed more refrigerators in December 2011, sparking higher levels of media attention, including a Youku video that has attracted more than 250K views.
BlueFocus’ efforts to conciliate backfired spectacularly when Luo uploaded a telephone recording of his conversation with the agency.
The affair is being viewed as a cautionary tale for public relations in China, where firms - both local and international - are known to pressure media through a variety of means to remove negative stories. The explosion in Weibo usage has provided Chinese netizens with a new outlet to pressure companies, putting many on a crisis footing.
“Companies are more on the alert,” said an agency source familiar with the situation. “Before you could expect to get a fair hearing. Now you can get someone with 1m-plus followers that doesn’t follow basic journalistic protocol.”
“In the past decade, it’s a very new situation for enterprises and agencies,” added BlueFocus COO Peter Mao, describing the crisis faced by BSH. “We are investing more manpower to save our clients from such impact. In the future, we will have new methods.”
BSH China president Roland Gerke eventually released a video message apologising to customers and pledging to repair all of the defective appliances.
After terminating its contract with BlueFocus, BSH is understood to have held a competitive agency review and has begun contract negotiations with Ogilvy PR. Scott Kronick, CEO of Ogilvy PR China, declined to comment, while BSH did not respond to request for comment.
“In handling social media crises, the PR agency needs to be aware that they shouldn’t be part of the story,” said the agency source. “They have to operate on purely ethical grounds and be aware that everything is in the public domain.”
“The lesson is these things cannot be put out by the traditional way of personal relationships,” added the source. “It changes the ground rules. At some point money can’t buy everything.”