Fake data scandal rocks Chinese ads giant

3 min read
The Weibo account of Chinese KOL Zhang Yuhan (Image credit: Weibo)

It’s an open secret in China that marketers, especially those in the key opinion leader (KOL) sector, will inflate user engagement figures to please their bosses and give off a positive aura. With this in mind, Chinese customers, as well as brand operators, are often skeptical when figures appear too good to be true. Yet, we still tend to believe there’s at least some truth when companies release user data. A recent scandal has shone an even brighter spotlight on the legitimacy of these metrics.

An irate brand operator on Taobao took to WeChat last week to post an article accusing Hive Media, a leading domestic multi-channel-network (MCN) agency, of cooking the books after a high-profile ad campaign promotion failed to equate to a boost in sales.

After paying Hive Media handsomely, the agency arranged one of its top influencers, Zhang Yuhan, who boasts over 3.8 million followers on Weibo, to post a vlog ad on her news feed. The post garnered over 3.5 million views, as well as 1,000 comments, with over half stating that they had placed orders, but in fact, not a single order was made.

The Taobao vendor disclosed in the story that a single Weibo post from Hive Media’s leading KOLs would cost hundreds of thousands of yuan.

The MCN responded, stating the brand’s actual payment was RMB 47,500 ($6,713), a lot less than what the company had claimed. The firm further broke the figure down, demanding RMB 28,500 for the vlog itself, and a further RMB3,070 is for buying traffic. 

The firm stressed there was “no guaranteed sales numbers mentioned in the contract,” indicating a lack of responsibility if data was being faked.

Social media platform Weibo has banned Zhang from taking on any more commercial projects for now.

The story took another turn when Chinese netizens rounded on one of the Taobao vendor’s products. The Shenzhen-based firm claims to hold a patent for its product named Eefit, a wearable that supposedly cures menstrual cramps. Some netizens claim the advertised patent was nowhere to be found, while others questioned its effectiveness. 

Elephant in the room

The development has laid bare China’s perennial struggle with data faking in social media and has attracted heated debate.

China commerce and social media sectors have become closely integrated over the last decade thanks to the wide adoption of mobile payment services. The shadowy practice of inflating statistics has accompanied the growth seen in the sectors, eroding consumer trust, especially in the retail and entertainment industry.

The fake data problem has long been a major pain point for Chinese social platforms. Last year, a single post from Chinese singer Cai Xukun was reposted more than 100 million times. The numbers were almost certainly inorganic as the volume equates to roughly one-third of Weibo’s 337 million users. The incident prompted the youth wing of China’s communist party to accuse the celebrity of buying fans. 

Another high-profile case was that of online Chinese travel site Mafengwo, accused of faking 85% of all user-generated content last year.

The Hive Media case has sparked heated discussion because it sets out the impacts of fake data on the retail sector. 

Despite the shock among outsiders, insiders of the industry are less surprised. The experts that TechNode talked to all agreed that web traffic inflation has been an “open secret” across the whole industry, and is not just a problem in China.

“I think this is an open secret for a long time and it’s not unique to China. Of course, as a big country, it’s amplified in China because of the bigger population and bigger numbers,” Nicolas Chan, head of digital APAC at The Hoffman Agency, told TechNode.

Watershed moment

Although moving slowly, a campaign against fake social media accounts is forming in China.

Beijing issued a warning in December last year prohibiting government bodies from “purchasing fans” for their social media accounts. China’s market monitoring watchdog launched a year-long campaign this September to crack down on unscrupulous business practices from user review manipulation to faking orders generated via KOL content.

Social e-commerce platforms are also taking actions to crack down on fake comments and reposts. Weibo issued a new rule in January limiting the count of the total number of interactions such as sharing to one million

Hive Media, the MCN involved in this case, was once a partner of Weibo, has suspended all services for now. Similar KOL platforms are unlikely to attempt a similar scam for the time being out of fear of a media backlash and a possible halt on services. 

This incident might be a turning point, but the change will be very slow, according to industry watcher Steven Yan.