Xiaxue versus Gushcloud – turf war begins (again)

By Ariffin Sha
On 23 December, Wendy Cheng (also known as Xiaxue), a local well-known blogger published a blogpost which sent a lot of people on the internet on a frenzy. Hashtags like #FaithinGushCloud and #FaithinXiaXue started making their rounds around Twitter feeds and Facebook walls.
The post, titled The Big Gushcloud Exposé, ran up to more than 5,000 words and a whole lot of other external links, numbers and charts, the singular purpose which was to say, “Gushcloud cannot be trusted as a blogger endorsement platform”.
In it, Xiaxue provided “evidence” from her investigation to accuse Gushcloud of faking the reach figures of its bloggers and partaking in other unethical tactics.
Here is a concise summary that covers a quick background, the five allegations Xiaxue made against Gushcloud, and the response by Gushcloud and its co-founder Althea Lim.
Why do we bother? Because an expose is always fun to read, especially one that digs up the figures. Also, the case gives us an interesting perspective on how advertising through bloggers work (or doesn’t work).
Background Information

Gushcloud is a popular social media marketing agency in Singapore which helps advertisers reach out to their target audience through its 10,000 social media influencers.’
Its main rival is Nuffnang. Xiaxue is a shareholder in Nuffnang and has been with the company since its infancy. The owner of Nuffnang, Ming, is a close friend of Xiaxue.
Xiaxue claims to have gone undercover by creating a fake company, SG Private Trainers. She pretended to work with Gushcloud with the intention of collecting evidence of Gushcloud’s unethical behaviour. She also claims to have collected evidence for almost one year before releasing it in her blogpost.
Allegation 1: Inflated earnings

Gushcloud has been reported in November 2012 to have a monthly revenue of $170,000, up from just $25,000 in February 2012. Xiaxue claimed that these earnings were inflated – such earnings would have accumulated to $590,000 for 2012, but Gushcloud’s financial report states that its total revenue for 2012 was only $396,005.
Allegation 2: Astroturfing

Using SG Private Trainers, Xiaxue engaged the services of Gushcloud. She bought an Instagram ad for $300 where she wanted Yilin, one of the bloggers manged by Gushcloud, to promote her the company’s services without revealing the fact that it was an advertisement.
Such a practice is called ad masking, or astroturfing.
Although Gushcloud did not give explicit assurance that it would mask the ad, Yilin’s post on instagram suggested that it was done as such.

Allegation 3: Inflated page views

Xiaxue also bought banner ads from three blogs under Gushcloud, which she then tracked for the amount of views her banner ads receive daily. She claims that the number of views her banner ads received was substantially lower than what Gushcloud and/or the bloggers themselves claim their number of daily page views to be.
Allegation 4: Fake subscribers and viewers on YouTube
While admitting in her blog post that there is no concrete way to proof that YouTube views and subscribers are fake, Xiaxue attempted to prove that Gushcloud was doing this by tracking the exact number of views, subscribers and likes of a YouTube channel under the Gushcloud network called Babe of All Trades, at 11 am every day.

According to Xiaxue’s blogpost, she wrote that more often than not, a YouTube video would have an initial spike of views for the first few days after its release, which then tapers off in the weeks or months that follow. If plotted on a graph, the views will increase steadily and sharply before eventually plateauing off. Xiaxue then plotted a graph to compare one of her videos with one from Babe of All Trades.

Xiaxue also noted a uniform increase of 10 likes everyday on another episode as further evidence of Gushcloud buying views.
To note, these are not the official statistics from YouTube and is in no way provide substantial proof that Gushcloud bought fake likes, views and subsribers. Gushcloud’s co-founder and CEO, Mr Vincent Ha had also previously denied such claims.
Allegation 5: Irregular financial reports
Xiaxue ended by accusing Gushcloud for being financially unsound and almost running on deficits. She suggested that they are unable to pay their vendors and influencers, and backed it up with a “qualified opinion” for the 2012 financial reports and Gushcloud’s balance sheets.
Xiaxue ended her post by advising GushCloud influencers to withdraw their money, terminate their contract and publicly announce that they are no longer associated with them. She even offered legal advice to those who are in need of it by asking them to e-mail her.
Gushcloud responds

Four hours after Xiaxue’s post, Gushcloud announced that it is exploring legal options on Xiaxue’s post. In an Instagram post, it asserted that the article was inaccurate. It also said that it believed that the blogpost was calculated to disparage and injure its reputation. It also attempted to rally its supporters with the hashtag #FaithinGushCloud.
Gushcloud’s co-founder, Ms Althea Lim also penned a personal statement to Xiaxue, refuting the allegations to be “far from the truth”. She also questioned Xiaxue’s ulterior motives, reminding readers that she is a stakeholder and/or a shareholder in Nuffnang, Gushcloud’s rival.
Ms Lim also refuted the allegation of bought YouTube views, by posting two pictures of statistics from YouTube’s Google Analytics.

The peaks indicate spikes in video views. Ms Lim also noted the spikes on weekends. She also noted that the tell-tale sign of bought views, with hits from countries like Russia and Afghanistan that occur as a sudden spike on a single day for a specific video, did not happen with Babe of All Trades. Also, 87% of views for it’s videos come from Singapore and Malaysia.
Before ending her statement, she noted that Xiaxue says ‘standing up to bullies is the right thing to do.” Ms Lim went on to accuse Xiaxue of using ‘bullying antics,’ not only against Gushcloud in her latest post but against many. She also accused Xiaxue of being a liar and challenged Xiaxue to sue her if she believed that she was wrong to say so.
Gushcloud has also released an official statement, which we have covered in a separate article.