With social media becoming more common in China, micro blogs have become the greatest source of scandals that damage companies' reputations, according to a report released on Thursday.
Micro blogs have also helped ensure that news of scandals spreads faster, and with a greater reach, the report said.
The far-reaching popularity of micro blogs will have serious consequences for companies and brands operating in China, said Debby Cheung, president of Ogilvy & Mather Group Shanghai on Thursday. Micro blogs have become one of the most common means of provoking scandals and furthering their spread, she said.
Ogilvy & Mather, an international advertising agency, and CIC, a provider of business intelligence in China, worked together to publish the white paper Crisis Management in the Micro Blog Era.
Their work used information culled from micro blogs on Tencent Weibo and Sina Weibo, as well as from reports from the search engine Baidu and various media reviews, to identify and analyze the biggest online scandals of 2011.
The report said the pervasive use of micro blogs has led to scandals arising with increasing frequency and speed.
In 2011, a series of corporate scandals affecting both multinational and domestic brands first came to public notice or spread on micro blogs - called weibo in Chinese. The issues they pertained to ranged from the detection of the toxic chemical clenbuterol in pork to flaws found in refrigerator doors made by Siemens AG.
Statistics from the China Internet Network Information Center showed there were more than 250 million micro-bloggers in China by December 2011, a 297 percent increase from 2010.
Many multinational companies have also taken to using micro blogs.
"We hope to reach all our stakeholders through weibo," said Isabelle Liu, vice-president of ABB North Asia and China, a division of the power and automation technology group ABB. "We also want to hear their comments and suggestions."
ABB is using social media in about 100 countries.
Eaton Corp, a power-management company, opened its corporate weibo in 2011 in China. "We believe there are huge opportunities for us to use social media networks to capture insights and feedback, share information and build relationships with and among our target stakeholders," said Vivian Xiao, head of corporate communications of Eaton Corp China.
Micro blogs can contribute to corporate communication if "a company can set a clear communication target for them, build a complete and sound process in coping with obstacles and design blogging content based on the needs of an audience," said Wang Yukui, communications vice-president of Boeing China, a division of the US aircraft manufacturer Boeing Co.
The company has been using the social media websites Twitter, Facebook, YouTube and Flicker in the United States and that has helped promote its brand, Wang said.
The report said online information can be swiftly aggregated and amplified through micro blogs and that companies should understand how to mitigate their risks.
"Real-time monitoring and analysis of micro blogs are especially critical at the initial outbreak of a scandal, when the spread of news occurs not in hours, but in minutes and seconds," said Daisy Zhang, CEO of CIC.