Sunday 22 March 2015

Smear campaign sparks calls for stricter ad rules

Singtel marketing fiasco a good wake-up call for industry: Experts
By Irene Tham, Technology Correspondent and Lim Yi Han, The Straits Times, 21 Mar 2015

STARHUB and M1 have accepted a public apology by Singtel group chief executive Chua Sock Koong for a smear campaign that ran last year.

StarHub chief executive Tan Tong Hai said in a statement: "We note and accept Singtel group CEO's apology."

An M1 spokesman said: "We accept Singtel's apology and will not be taking further action."

The Infocomm Development Authority is still investigating whether Singtel breached the Telecom Competition Code, which is imposed on all telecommunications licensees.

Last Saturday, blogger Wendy Cheng, better known as Xiaxue, blew the whistle by posting on her website a leaked 2014 e-mail from social media agency Gushcloud that gave instructions to its bloggers on how to complain about StarHub and M1's network connections and services.

Gushcloud was employed by Singtel in June last year to manage its e-campaign to promote a youth mobile plan. The social media agency's bloggers could receive up to $4,000 in cash incentives, among other benefits, for successful sign-ups.

Ms Cheng also posted many samples of the online complaints from Gushcloud bloggers targeted at the rival telcos.

Singtel apologised for the marketing campaign on Tuesday.

The company explained that its marketing standards that forbid negative campaigns had not been followed, and that the incident was an "isolated" one.

On Thursday night, the telco posted a second apology, this time on Facebook. It was signed off by Ms Chua, who pledged that the company would reinforce its "high standards and values" internally and with its business partners.

Singtel also terminated Gushcloud's services and said the employee involved in the campaign was no longer with the company.

So far, at least two bloggers have apologised for posting negative comments in the Singtel marketing campaign, although they insisted their comments were not fabricated.

Experts said this incident provides a good wake-up call.

Dr Ang Peng Hwa, legal adviser at the Advertising Standards Authority of Singapore (Asas), said: "Consumers cannot be taken for granted. Fake comments or Facebook 'likes' cannot be passed off as genuine ones."

Asas is planning to roll out new guidelines for interactive advertising, such as those on social media or blog sites. These will specify that advertorials must be clearly marked as such, and discourage advertisers from buying fake Facebook "likes", said Dr Ang.

The Consumers Association of Singapore's executive director, Mr Seah Seng Choon, said advertisers should include these guidelines and the Singapore Code of Advertising Practice into their contracts with social media agencies.

"Companies must also supervise what social media agencies do," said Mr Seah.

Dr Adrian Yeow, a senior lecturer at SIM University, said unethical practices, including paid content not being disclosed, may have surfaced due to rising competition among social media agencies.

Dr Terence Heng, an assistant professor at the Singapore Institute of Technology, said: "The ethical values surrounding blogging or tweeting as a form of marketing are still relatively new as opposed to, say, television or print advertisements."

He is confident that a better understanding of values that underscore traditional journalism will "gather pace" after this scandal.

Mr Alvin Lim, 35, who runs a blog called Alvinology, said a lot of bloggers are very young and do not have the experience to turn down dubious requests from advertisers.

Gushcloud chief executive Vincent Ha yesterday also apologised to M1, StarHub and the public for the campaign.

He said: "We regret the recent incidents and how it has affected the industry, our influencers and our clients... We are disappointed in ourselves for the way it turned out.

"We have started a process of auditing our practices, processes and people, to ensure that we can be a good agency and partner to our present and future clients."

Ms Cheng said: "I'm kind of surprised that it has blown up to be so big. I never expected that. I think it's very gracious of Singtel to apologise."

She said it had come as a shock to her when there was talk of legal action being considered in connection with the episode.

"Personally, I don't really want to see the bloggers get sued," said Ms Cheng. "A lot of them are very young."

* Singtel gets 'stern warning' over smear campaign
By Irene Tham, Technology Correspondent, The Straits Times, 19 May 2015

THE Infocomm Development Authority (IDA) yesterday issued Singtel with a "stern warning" over an online smear campaign against its competitors.

Last June, the telco encouraged bloggers - via social media agency Gushcloud - to badmouth StarHub's and M1's connections and services to drive subscriptions for its own youth mobile plan.

IDA said it has always encouraged licensees to compete by promoting the availability, prices and quality of their own services, and not by disparaging those of competitors.

This area falls under the Telecom Competition Code, imposed on all telecommunications licensees. While this code does not say anything about advertising, it states that a telecommunications licensee "must not engage in unfair methods of competition". "IDA made it clear in its warning to Singtel that IDA will not tolerate such practices," the regulator said.

Specifically, the IDA requires Singtel to provide appropriate management oversight and control over its marketing and advertising campaigns to prevent a recurrence.

Blogger Xiaxue, whose real name is Wendy Cheng, blew the whistle by posting on her website a leaked 2014 e-mail from Gushcloud to its bloggers, instructing them on how to create messages to undermine StarHub and M1. The bloggers were offered up to $4,000 in cash incentives, among other benefits, for successful Singtel sign-ups.

Netizens lambasted the two companies, both of which apologised. One of Singtel's two apologies came from its group chief executive, Ms Chua Sock Koong.

In a statement yesterday, Singtel said that it takes a serious view of the lapse, and is committed to uphold the highest standards of integrity.

"We have, and will continue to take, measures to ensure that our staff and business partners understand and adhere to the same standards and values," a spokesman said.

A Gushcloud spokesman said the incident "was a matter of deep regret" for the firm. It has tightened its processes by making it clear to all staff and bloggers that it does not engage in smear campaigns.

It all started with an anonymous e-mail
Blogger Xiaxue set out to expose smear campaign but did not expect storm that followed
By Lim Yi Han, The Sunday Times, 22 Mar 2015

The Gushcloud-Singtel scandal all began with an anonymous e-mail to Ms Wendy Cheng, the blogger better known as Xiaxue.

The e-mail, which she received on March 11, contained a link to a website which had posted leaked documents from social media agency Gushcloud.

The documents included a brief by the agency, asking its bloggers to smear rival telcos M1 and StarHub, as part of a Singtel digital campaign last June to promote a mobile plan for youth.

"I couldn't believe my eyes. I've never, ever seen a brief like that... asking to trash a competitor," said 30-year-old Ms Cheng in an interview with The Sunday Times.

She started doing research to confirm the allegations, going through Gushcloud bloggers' various platforms, including Twitter and Instagram. She found that the brief had been followed.

After getting three lawyers to look at her material, she put everything up on her blog on March 14. Little did she realise the storm it would cause.

The Infocomm Development Authority opened an investigation into whether Singtel had breached competition rules. StarHub said it was exploring its legal options.

Last Thursday, Singtel's group chief executive officer Chua Sock Koong apologised to M1 and StarHub. The telco also parted ways with an employee who had been involved in the campaign, and cut all ties with Gushcloud.

But the damage was done. Netizens came out to slam both Singtel and Gushcloud, which apologised as well, for the negative marketing campaign.

Social media experts described the incident as a wake-up call for the industry.

Ms Cheng, who studied media and communication at Singapore Polytechnic, said: "I'm kind of surprised that it has blown up to be so big. I never expected that."

Many also wondered if her post was simply a way to discredit Gushcloud, a rival to Nuffnang, the social media company she belongs to. In December, she also put up an "expose" alleging that Gushcloud inflated its bloggers' page views.

"There is criticism that I 'punish' people by blogging about them based on my own warped sense of morals... People think that I'm very arrogant," said Ms Cheng,

"But I don't do that, unless they personally challenge me or insult me until I really buay tahan (Hokkien for 'cannot endure it') already."

That was part of the reason for her first expose, she said. She was offended when Gushcloud co-founder Vincent Ha disputed one of her posts last March, she added.

Ms Cheng has in the past also named and shamed commenters who posted derogatory remarks about her and her friends on the Facebook page of sociopolitical blog Temasek Review.

Earlier this year, she took out a protection order against the satirical Facebook page SMRT Ltd (Feedback) for harassing her.

But she said her latest post had as much to do with the importance of holding the industry to certain standards.

She also realised that the possible fallout could hurt Nuffnang and the social media advertising industry in which she was an early pioneer, as clients and netizens may lose confidence in bloggers.

Said Ms Cheng, who started her full-time blogging career in 2005 and now earns as much as "five figures" a month: "But in the long term, it will probably improve the industry."

Dishonest acts by social media firms erode trust

WHILE the Infocomm Development Authority is still investigating whether Singtel breached the Telecom Competition Code ("Smear campaign sparks calls for stricter ad rules"; last Saturday), it should also be determined if regulations concerning consumer protection and advertising practices were contravened.

If social media agency Gushcloud is aware of its legal responsibilities, it should not be allowed to get away with a manicured apology, which provides no guarantees against future transgressions.

Marketing standards may now be tightened, and a good - if unintended - consequence is heightened scepticism of online content producers.

It is not necessarily true that the "ethical values surrounding blogging or tweeting as a form of marketing are still relatively new".

Instead, these social media agencies - vis-a-vis the marketing standards for campaigns that Singtel says it has - figured it was worth the risk to disregard these ethics, thereby dabbling in such disinformation.

Far too many online publications in Singapore have got away with disclaimers tucked discreetly in the middle or the end of articles, undeclared information on whether goods and services were paid for, or a blatant disregard of conflicts of interest.

"Rising competition among social media agencies" is a poor excuse for these practices.

At the same time, content consumers should learn to be more discerning when it comes to articles on the Internet.

There are dishonest acts - such as fake comments, "likes" on Facebook, or "followers" on Twitter and Instagram - which regulators have no control over, but can be sussed out by the average reader by doing a quick survey of timelines and past interactions.

The persistence of such poor influence by social media agencies will only continue to erode public trust, at their own expense.

Kwan Jin Yao
ST Forum, 26 Mar 2015

Blogger gives ad players a wake-up call
Expose of Singtel's smear campaign on social media prompts revamp of code of conduct after seven-year hiatus
By Irene Tham, Technology Correspondent, The Straits Times, 2 Apr 2015

IT HAS taken an irreverent pink-haired blogger known as Xiaxue to haul the outmoded best-practice code of Singapore's advertising industry into the social media century.

Like her, loathe her - she is too upfront for some - or scratch your head over your pencil and paper over who she might be, but the celebrity blogger has got those in the communications industry asking the big question. That is, is it acceptable to badmouth a competitor or create fake consumer opinions online for marketing purposes?

Judging from the public fallout over a recent online campaign to badmouth Singtel rivals StarHub and M1, the answer is a clear "no". Xiaxue, whose real name is Wendy Cheng, exposed the controversial campaign in a blog post last month that made mainstream media sit up.

The incident shows that ethical behaviour cannot be taken for granted, especially in the online world where accountability may not be clearly defined.

Still, on the face of it, you might expect the social media agency behind the smear campaign, Gushcloud, to at least know the boundaries of how far you can push this sort of thing.

After all, there is an existing Singapore Code of Advertising Practice, which can be found online. But sadly, when it comes to the code, that is about the only thing "online" about it. Get this - it governs only print, radio and TV advertising.

Sure, it frowns on advertisements that have misleading claims or unfairly discredit rival products.

But it was last updated way back in 2008 - before advertisers discovered and started tapping the persuasive power of bloggers, or "influencers" as some professional ones are called, when they endorse a certain product or service in their online reviews.

Astonishingly, the industry is only now getting around to establishing guidelines of accountability and best practice for social media-specific advertising.

The effort is spearheaded by the Advertising Standards Authority of Singapore (Asas), whose members include government agencies such as the Agri-Food & Veterinary Authority and the Media Development Authority, and media owners like Singapore Press Holdings and MediaCorp.

Asas, which is holding meetings and formulating these principles now, will apply some of the principles in the current code of practice when drawing up the advertising guidelines for social media.

But now, it will spell out unacceptable scenarios unique to interactive advertising, such as those on social media or blog sites. Heading the charge is Dr Ang Peng Hwa, legal adviser at Asas.

This is in the hopes of repairing the damage to consumer trust after the controversy burst from the blogosphere into the public realm last month.

The campaign in question - for which Singtel and Gushcloud both apologised - ran in June last year with the objective of promoting a Singtel youth mobile plan. Last month, Ms Cheng blew the whistle byposting a leaked 2014 e-mail from Gushcloud to its bloggers, instructing them how to create messages to undermine StarHub and M1 to make Singtel look good. For successful Singtel mobile plan sign-ups, bloggers would receive up to $4,000 in cash incentives, among other benefits.

Dr Ang urged the social media advertising industry to come together to lift its reputation by adhering to a published code of conduct. "The entire industry is tainted; people tend to lump the black sheep with the good ones," he noted.

Taking an old-school approach to an urgent problem, Asas said it will call for a public consultation later this year, and is targeting to roll out the guidelines by the end of the year. Explaining the length of time, Dr Ang said: "We want to be careful not to attract unintended consequences."

Problems today

THE biggest problem with interactive advertising today is ineffective disclosure:
- Of relationship
It is common for bloggers to be sponsored on a cruise or hotel stay, and later write about their experience. Not all bloggers declare upfront that the experience was sponsored. Some bloggers may even receive payments to write about a product or a company, but the write-up may not be clearly marked as paid content or advertorial.
- Of opinion
Consumers may "like" a Facebook page or post positive comments on social media about a product or service in exchange for freebies or discounts.

Some advertisers even base access to smartphone apps or app content on whether consumers "liked" their Facebook page.
- Of identity
Some media agencies hire people to create fake online profiles to generate fake grassroots support for a certain social or political cause, or product or service. The practice of masking the sponsors of a message to make it look like the support came from genuine grassroots participants is known as "astroturfing".

Dr Adrian Yeow, a senior lecturer at SIM University, said unethical practices may have surfaced due to rising competition among social media agencies.

Mr Ian McKee, founder and chief executive officer of 10- year-old social media marketing agency Vocanic, agreed. "Today, practically every marketing agency in Singapore claims it can also do social media marketing," he said. "But not all are totally aware of the potential ethical pitfalls."

Forms of social media advertising

THE deluge of social media agencies is a result of increasing advertiser demand upon realising the influence that social media chatter has on everyday behaviour. Even mom-and-pop shops have set up Facebook pages to market their services.

This was not the case 10 years ago. Then, Mr McKee said, it was a challenge to persuade advertisers to allocate budget and attention to early forms of social media marketing better known as "word-of-mouth marketing".

Today, such marketing takes various forms. The simplest is a Facebook page to generate awareness of, say, a new cafe in the neighbourhood. When someone "likes" the page and reposts it on social media, his network of friends will get to know about the new cafe.

Some companies, like telco StarHub and rail operator SMRT, also use social media platforms such as Facebook and Twitter to broadcast messages to customers and manage customer feedback.

The most sophisticated, albeit controversial, form is paying bloggers or "influencers" to shape market perception - which Singtel and Gushcloud bungled by taking ethical short cuts.

What ensued was a chain of negative reactions. Netizens lambasted the two companies.

The Infocomm Development Authority opened an investigation into whether Singtel had breached the regulator's Telecom Competition Code.

While this code does not say anything about advertising, it states that a telecommunications licensee "must not engage in unfair methods of competition".

Also, Singtel parted ways with an employee who had been involved in the campaign, and cut all ties with Gushcloud.

What works?

EVEN in the absence of interactive advertising guidelines, some social media agencies and bloggers have abided by their own rules.

Some social media agencies do advise clients not to generate fake "likes" on Facebook or engage in astroturfing.

Responsible bloggers also ensure that paid content is clearly labelled as advertorial, with the sponsor named - or they walk away from the deal. Some also declare their affiliations with the organisations they report on in their blogs.

For instance, some financial bloggers declare that they own stakes in the companies that they write about.

Then there are those who routinely turn down advertisers' offers to tie the payment for write-ups to the sale of the products written about.

Ms Cheng is one of them. "I don't get involved in product sales; it gets tricky," she said. Not only is payment not certain, engaging in such practices also violates readers' trust, she added.

Like Ms Cheng, technology blogger Alfred Siew said that he accepts payments only for online advertisements or advertorials, and they are clearly labelled as such. "Readers should demand honesty at all times," he said.

Advertisers: Don't gush or cloud
Editorial, The Straits Times, 2 Apr 2015

THE sorry Singtel-Gushcloud saga brought into focus how social media is striving to transform the way consumers make buying decisions. Anything goes apparently in this wild, wild West world of advertising and promotion. Should some limits be established for the public good?

The question assumes importance as established corporates are turning to so-called influencers with supposedly substantial social media reach, in the belief that this is an effective way to connect with younger consumers. In the case of Singtel's e-campaign to promote a youth mobile plan, the "influencing" also took the form of a bid to smear rival telcos M1 and StarHub. That went beyond the pale.

The apology by Singtel's CEO helped to mitigate the damage to its credibility. And StarHub's and M1's acceptance of the apology showed welcome restraint. It would have tarnished Singapore's corporate image if leading business players had engaged in an unseemly scrap, especially when trust in key service providers is deemed an important asset.

In the freewheeling world of marketing influencers, Gushcloud and other social media agencies should engage in some soul-searching on campaigns that are dubious both in intent and execution. Blurring the lines between independent and paid-for comments misleads the public, erodes fair competition and, ultimately, devalues blogs as a supplementary tool for communication in contemporary society. Bloggers must see that the law of diminishing returns applies when they stoop to tactics that are bound to be exposed sooner or later, as indeed was the case involving Singtel. In 2011, global agency Burson-Marsteller was taken to task by the Public Relations Society of America for running a negative campaign against Google and for not disclosing the identity of its client, Facebook.

All acts that flout ethical codes should not be tolerated. The Advertising Standards Authority of Singapore says that campaigns should be legal, decent, honest and truthful. When product comparisons are undertaken, greater care must be exercised to remain neutral. Indeed, it ought to be obligatory for all those involved to disclose any pecuniary or other interests they have in a product or service. Anything less is just plain deceitful, as more content is put out by social media players who specialise in consumer persuasion. Netizens should insist on transparency and shun those who opt to remain silent or beat around the bush.

Industry players should proactively craft guidelines on appropriate conduct when engaging social media influencers, including mandatory disclosure of sponsored content, polling methodology and any selective use of data.

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