Could better PR have prevented Groupon’s China gaffe?

Unless you live on Pluto and you’re just in town for the temple fairs you probably know the situation with Groupon and their notorious Tibet ad. From within the China echo chamber it can be tricky to calibrate your reaction to this kind of thing. Those of us who live here are prone to flinch at things that people living in America don’t give a damn about. But we often learn that flinch reaction the hard way, over years of doing business in China and wrestling the occasional PR crisis.

Groupon, it turns out, is trying to build a business in China. Their well-established irreverent sense of humor aside, you’d think they’d thus have some radar for the things that are likely to get them in trouble here. Media 101: In 2011, all media is global media. Culture 101: What plays in Chicago (where Groupon is from) may not play in Changchun, as it were. Think Tommy Lee Jones in the first Men in Black: “We in the FBI have no sense of humor that we are aware of.” Now replace him in your head with just about any Chinese government bureaucracy, and consider the direct and substantial influence that those bureaucracies have over the fortunes of businesses operating in China. And this doesn’t even get into the reaction of Groupon’s potential customers here. They do have a sense of humor, but not necessarily the same one as customers back home.

I’m not going to get into the details of how screwed Groupon may or may not be in China. For that, read posts from ChinaGeeks, Techrice or Shanghaiist. Suffice to say that most of us who live and work here in China think the Tibet ad increased the risks to any mainland China operation that Groupon launches.

The question that preoccupies me as a China PR man is, where was the PR team in all of this? One of the things I learned in my years at Burson-Marsteller was that a good PR person is one who can, among other things, look at business decisions being made and tell the management what those decisions will mean for the company’s reputation among all the audiences that matter. A good senior PR person will use a team and agencies to extend that ability beyond what any one person can cover, and be able to bring that information back to management at a level that can shape decisions. If a company is just using PR to pitch journalists and grind out press releases, then it is missing a big part of the point of a good PR team.

In the best of all possible worlds, Groupon would have had a senior PR person who was aware of the company’s China plans, was tied into what the marketing group was doing, and was smart enough to spot a risk and bring it to management ahead of time. Message: Run this ad if you want, but it will create real risks in China at exactly the wrong time. Maybe this happened. Maybe the company went ahead anyway, in which case they assumed those risks with their eyes open. Maybe it didn’t happen at all. In the end, they went to market with an ad that has real potential to damage their business ambitions.

The point here is not to change Groupon’s irreverent corporate personality, but to tune that personality so that it stays an asset as they grow into a global company. Startups often grow their businesses and ambitions faster than their PR capabilities. I have personal experience with this from before I was in PR, when I worked as a project manager and operations chief in a fast growing e-commerce company in Singapore in the late nineties. I thought the PR woman’s main contribution was to introduce bureaucracy and slow down things we had to do right now, and I was full of disdain for her and her work. Nothing like ten years on the opposite side of the tracks to broaden your perspective. I’ve often thought I should write her a letter to apologize for the former me. Come to think of it, some of my prior girlfriends could use similar letters. If any of you are reading this, I’m sorry.

I have no idea how Groupon runs its PR. I do know that Venturebeat offered them some pretty sound advice on PR late last year, and an industry blogger critiqued their response to the ads in the US. I also know that in the wake of the Tibet issue, they’ve expanded Fleischman-Hillard’s remit from Hong Kong to mainland China, which is better than nothing but a bit after the fact and in a galaxy far, far away from headquarters. If you’re entertaining multibillion dollar buyout offers from Google, planning a public listing, and hoping to expand your business in China, you’d better put some really strong PR people right at the center of management decision making. And if you’re going to try to build your business in China, you’d better have someone on the ground here in the mainland who knows what the company is up to and who has the phone number of the key decision makers in the US.

If Groupon wasn’t doing it before, now would be a good time to start.

Update: Word on the street (by which I mean Twitter) is that Groupon is also suing this lookalike site in China. Hope they have a China trademark registered.

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