Sociagility

In our latest study, Social Media in The City, we found that only 20% of the FTSE 100 are actively engaging on the professional social network LinkedIn. The rest, we conclude, are missing out on opportunities to drive word of mouth by engaging its members, who now number over 187 million.

Key findings

• 96% of the FTSE 100 companies have a corporate presence on LinkedIn with a combined 2.6 million followers and 978,000 employee accounts
• Yet only 20% appear to be actively engaging via their LinkedIn Company Pages by posting status updates on at least a monthly basis
• As a result, just 12% are seeing regular engagement with their company pages from LinkedIn members, in the form of like or comments on their status updates over a one-week period
• We also found that 87.5% of those listing products or services received endorsement and recommendations, and all those who posted status updates in the 30 days to 8 November 2012 saw some form of engagement by LinkedIn members

Analysis

The research, published this month, found that while almost all the FTSE 100 have a corporate presence on LinkedIn, few actively manage it. Less than a quarter of FTSE 100 companies list any of their products and services on their company pages and a mere 13% posted a status update in the 7-day study period. As a result just 12% saw regular engagement by users of the largely business-focussed social network.

However, those companies that do take the time to list products and services and post status updates see high levels of engagement in return. The study shows that the vast majority (87.5%) of those listing products or services received endorsements and recommendations, and all those who posted status updates in the 30 days prior to the study received at least one ‘like’ or comment.

LinkedIn company pages can be created manually by companies but are often created automatically by LinkedIn based on employee accounts. They allow members to stay up to date on company news, products and services, business opportunities and job openings.

In a news release issued today, Josh Graff, director of LinkedIn Marketing Solutions EMEA, said: “With four out of five British professionals on LinkedIn, a Company Page gives businesses a social media presence that counts. Whilst most UK businesses have a company page, as this research highlights, many are not yet making the most of it. I’d encourage them to log on, add their products and services and start actively engaging.”

The FTSE 100 companies – who together attract a combined 2.6 million followers of their LinkedIn company pages – are represented by 978,000 employee accounts on the professional social network.

A new LinkedIn performance metric

To undertake this analysis, we developed a unique performance algorithm for LinkedIn, which measures company pages on three attributes: popularity, activity and engagement. When applied to the FTSE 100, it found that Royal Dutch Shell led the overall ranking and received the highest levels of engagement, although Unilever was the most popular company and Experian was the most active.

With LinkedIn being a business-oriented social network that many companies seem to hold in such high regard, it is extraordinary that so few of the FTSE 100 are using it well. In our view, this lack of engagement represents a lost opportunity and a competitive disadvantage.

Contrary to expectation, markets are very emotional places…and individual share prices are often influenced by sentiment as much as the fundamentals. Every IR and PR professional knows this and they know the power that 3^rd parties like the financial press have to drive sentiment.

Many believe that social media can have a similar impact but there’s not been much hard data to support that view.

However as reported, our recent Social Media and the City study DID find some pretty interesting links between strong social media performance as measured by PRINT™ and positive share price movements.

The detail is in the study but, for the statistically challenged (like me) the scattergraph below shows the correlation between the PRINT™ Receptiveness score at the beginning of November and the monthly change in share price to 28 November. These were all statistically significant (r > 0.207, N = 100, p < 0.05). This effectively means that if one variable were to rise or fall, chances are that the other would too. The p bit means there is at least a 95% probability that this relationship is not happening by chance – a level at which studies in the social sciences are generally accepted to be true.

On the basis of these initial findings we think someone should fund a longer, more detailed study to determine whether or not this represents a real and consistent lead indicator.

We’re open to offers!

Yesterday we looked at how the primary sectors represented by the FTSE 100 fared in our Social Media and The City report. Pharmaceuticals & Biotechnology companies put in the best combined performance, followed by Oil & Gas Producers, both ahead of more consumer-facing industries like Retailers and Media.

Today, we’re looking in a bit more detail at the Banking, Financial Services and Life Insurance sectors – a collective group of 14 companies that have seen their fair share of criticism over the last few years.

By plotting these companies on the chart below, which maps their respective Awareness Quotients (a measure of status) and Engagement Quotients (a measure of participation and interaction), we see that only Barclays and Aviva occupy a leadership position. HSBC’s score seems mainly driven by status, with little social media engagement. However, RBS, Hargreaves Lansdown and Standard Chartered show higher engagement than awareness scores, suggesting a willingness to listen and participate.

Although spread across all four quadrants of the grid, the banks perform best overall within this combined financial sector group. With the exception of Aviva, life insurance companies lag the rest of the financial sector – a big surprise given that most are well-known, consumer-facing household names.

The Social Media in the City report we launched this week looks at the comparative social media performance of the FTSE 100 companies. But we also looked at how FTSE 100 sectors with 3 or more companies perform: to see how average sector performances compare; and to highlight any major variations within sector.

There are some surprises.

The table below, ranked based on the average Social Performance Index (SPI) scores, shows that seven sectors score above average (100). They are not necessarily the most obvious, consumer-facing candidates. Shell’s and AstraZeneca’s individual strong performances helped their respective sector groups, with Pharmaceuticals & Biotechnology and Oil & Gas Production sectors commanding the two highest average SPI scores. Unsurprisingly, General and Food & Drug Retailers take the 3rd and 4th positions and Media the 5th, but Aerospace & Defence in 6th place is a surprise above Banks, Food Producers and Gas, Water & Multiutilities.

The chart below maps two general factors that contribute towards this performance – the Awareness Quotient (a measure of status) and the Engagement Quotient (a measure of participation and interaction). A low EQ combined with a high AQ suggests the PRINT™ score is driven disproportionately by scale rather than social engagement.

Awareness Quotient (AQ) bundles the PRINT™ attributes Popularity and Network and tends to favour larger, more established companies with larger communications spends. Engagement Quotient (EQ) bundles the Receptiveness, Interaction and Trust attributes.

The full study data allow us to analyse each sector in much more detail, and we’ll be highlighting some of these over the coming days.

One of the most challenging aspects of researching for our recent Social Media in The City report was identifying the 400 URLs and social media accounts needed to assess the performance of all FTSE 100 companies. It’s made even more difficult by companies who do not provide obvious links from their consumer-facing websites to their ‘corporate’ ones, let alone provide links to their Twitter accounts, Facebook pages and YouTube channels, even when they have them.

We spent a lot of time researching and wrote to every one of the 100 companies to give them the opportunity to validate or correct them (a huge thanks to all those that responded).

Now, as well as making our findings available for download, we’re also making the list of URLs and social media accounts available. They can be found in the interactive version of our full rankings where you can sort by any one of our performance metrics, search for a particular company and copy, save or print it.

We had a feeling all was not well in corporate use of social media…

Our new Social Media in the City report, published today in association with the PRCA, shows that the majority of the FTSE100 are failing to engage effectively with social networks. As a result they may be at a competitive disadvantage by not connecting well with corporate stakeholders. Our research also suggests a link between social media performance and share price movement.

There are some creditably strong FTSE 100 performers, including companies from surprising sectors, but it seems that most still do not regard social media and networks as important for corporate communications. This is despite the fact that social media are used by a variety of stakeholders, by commentators and by mainstream media.

Research highlights and lowlights

• Our study has found statistically significant correlations between social media performance and subsequent daily share price movement; higher social media performance scores associated with positive changes in share price
• Two-thirds of FTSE 100 companies perform below average on main social media networks
• Shell, AstraZeneca and Sainsbury lead new ranking of best-performing companies
• Best performers come from some surprising sectors, e.g. mining firm Vedanta and computer chip maker ARM Holdings both appear in the top 10
• The highest performing FTSE sector is pharmaceuticals & biotechnology, followed by oil & gas producers and retailers
• Only 20% of FTSE 100 companies are actively using LinkedIn company pages to engage

The research was conducted in November this year. We used our quantitative PRINT™ performance measurement system to assess the corporate social media profiles of all FTSE 100 listed companies. Performance scores were derived for each social media network and combined to create an overall Social Performance Index (SPI).

The SPI leadership group is unexpectedly diverse. While the top 20 includes four of the FTSE 100’s six retail companies, this group also includes non-consumer facing brands like mining firm Vedanta, computer chip-manufacturer ARM Holdings and BAE Systems. Only one bank, Barclays, makes the top 20 group.

There are some surprising sector laggards. The Insurance sector as a whole, for example, scores well below the FTSE 100 average and only one company, Aviva, even makes the SPI top 30.

Most FTSE 100 companies (95%) have LinkedIn company pages, attracting a combined 2.6 million followers. However, less than a quarter of the FTSE 100 list any of their products or services on company pages, which are usually not actively managed – only 20% posted a status update in the 30 days prior to the study.

Is social media performance a lead indicator for share price movement?

Previous Sociagility studies have shown similarly close correlations between PRINT™ scores and measures of brand value and growth, as well as market share.

This study shows a statistically significant correlation between the SPI score and market capitalisation. It also shows statistically significant correlations between PRINT™ Receptiveness attribute scores at the beginning of November and share price movements during the rest of the month (r>0.207, N=100, p<0.05), indicating a 95% probability that this is not happening by chance. Higher social media performance scores were associated with positive changes in share price.

Health warning: correlation is NOT the same as causation… However, we think these results are interesting and at least give in-house corporate comms teams a strong argument to get the resources they need to up their game.

Different strategies … or none?

This study suggests that under-performing companies are incurring a reputational disadvantage internationally compared with competitor companies that engage with social media successfully. Yet social media performance really matters for corporate brands: it is a competitive issue and this should be of concern to the whole C-suite, and to investors.

Specific company plans to improve social media performance must of course depend on an individual approach, taking into account a host of factors we cannot know about. We have made no attempt to investigate or understand individual company strategies. But major differences in performance do emerge purely from the data. In some cases these are clearly driven by a deliberate strategy – in others, apparently, by the absence of one.

We understand that, for many corporate communicators in more traditional companies, the #1 priority is brand defence and that social media may seem risky but as Francis Ingham, Director-General of the PRCA says: “It is a far greater risk to let social media policy simply stagnate.”

We’ll be focussing on different aspects of our findings in the coming days. Meanwhile, if you’d like to download a copy of the full report, you can find it at http://www.sociagility.com/ftse.

Some say that in order to credibly advise others about social media, marketing agencies need to be participating first hand. So this week, the Sociagility Social Performance Index looks at the social media performance of 25 leading digital agencies. We’ve compared them all to see which ones are using social media best to engage and interact.

Our findings show that The Interpublic Group’s R/GA tops the social charts with the strongest awareness and engagement scores and an SPI of 455 against the average of 100, driven primarily by its Twitter account. WPP’s AKQA takes second place, with the highest popularity, interaction and trust scores according to our methodology. An honourable mention goes to independent agency Essence, Chime’s VCCP and WPP’s G2 Joshua who deliver above average engagement scores, despite lower than average levels of awareness..

Just six of the 25 agencies included in this study recorded a Social Performance Index (SPI) score above the average, with overall leaders R/GA and AKQA outperforming the rest of the group by a considerable margin. Other leaders include SapientNitro, iProspect and TBG Digital.

Awareness Quotient (AQ) and Engagement Quotient (EQ) scores show that whilst many of these agencies appear to be demonstrating an ability to build popularity, they are less successful when it comes to interacting and engaging with their communities. Only Essence, G2 Joshua and Kitcatt Nohr Digitas show a delta sufficient to suggest that they are punching well above their weight.

Considering the services these agencies provide, one particular surprise is that only two-thirds appear to be using all of the most popular social media channels (with fewer still providing visible links from their home pages).

At the bottom of the table, a number of agencies clearly have some way to go in order to compete effectively with the leaders.

What do you think – are the agencies best at being social always the best at doing social for their clients?

We’re just starting our study of how well the UK’s largest public companies, the FTSE 100, perform on social media platforms. But does a good social media performance actually matter for corporate audiences?

We wouldn’t be in business if we didn’t think so, and it’s reassuring that a majority FTSE 100 companies apparently do too… or at least they think it matters enough to have a social media presence of some kind. But not everyone’s equally keen.

Who’s on what?

First, by ‘corporate’, I mean the overall business, rather than its constituent companies or brands – although for some ‘company brands’, this is the same brandname. Specifically, for the purposes of this study we are looking at the entity actually listed on the London Stock Exchange, the plc.

Others may have done more complete breakdowns of which companies are on which platforms but these often look at the consumer-facing brand(s), not the corporate entity. For our study, the percentage breakdown for the four common platforms that PRINT™ assesses is as follows:

• Website: 100% of the FTSE 100 have something aimed at corporate audiences.
• Twitter: 72% have created some kind of corporate Twitter account
• YouTube: 65% have a corporate YouTube channel
• Facebook: Only 56% have a corporate Facebook page, perhaps indicative of a platform perceived as being more consumer-focused

It’s hardly surprising that all the companies have a corporate website – even if some are pretty basic. But the numbers drop off after that. So which audiences are the companies that do have a corporate social media presence trying to reach and why is that relevant for the others?

Corporate & financial audiences

Of course there are a whole host of potential ‘corporate’ audiences: employees, trades unions, suppliers, local communities as well as regulators, legislators; not to mention commentators and a broad spectrum of ‘traditional’ media. All these groups include many important individuals who are active users of social media. For them, it’s just another way to have a relationship with a brand or company – or simply keep track of what they are doing.

But what about investors? Do they really care about tweets and Facebook likes… they are just interested in facts and figures, right?  And in any case, surely better for listed companies to avoid the risk of engaging via these informal forums and channels and stick with the safe formalities of the annual report, face-to-face presentations, earnings statements and the traditional mediated route of the financial press.

This view is short-sighted for a variety of reasons. For a start, shareholders and potential investors are people too – and likely to be participating in social media, especially in the UK and USA.

Second, both private investors and the ‘wholesale’ City institutions like insurance companies, banks and brokers, routinely use social media analysis to help in their buy/sell/hold decisions on individual shares. Furthermore, City commentators, not least the financial press, use social media to track news and opinion – and themselves engage in creating social media content.

Fragmented control = fragmented corporate messaging

Ever since the advent of the web 20+ years ago, the Internet in all its forms has become a public mirror (sometimes distorted) for brands and companies, showing the good and the bad, highlighting successful strategies and exposing corporate fault-lines. Yet some FTSE 100 companies still seem to be adopting an old-school, pre-Internet (let alone pre Web 2.0) approach to managing the social media aspect of their online presence. Specific audiences are assigned specific platforms leading to a dangerous potential for gaps, contradictions and confused or incoherent messaging.

A typical example is Twitter. Many companies just use Twitter corporately as a broadcast channel devoted to journalists with content consisting almost entirely of references to news releases. Why is this happening? Well, it could be a well thought out strategy but my guess it’s probably because someone in the Press Office was seen to ‘get’ Twitter, so he/she got it forever.

There’s similar issue with Facebook. The perception – aided and abetted by Facebook and digital agencies – is that it’s purely a consumer platform and the only role for companies is advertising. Yet many organisations use it successfully to reach out to local communities, job seekers and even business partners – all traditionally within the remit of the corporate communicator.

A competitive issue

Unsurprisingly, our own point of view is that social media undeniably have a large and increasing important part to play in corporate communications – including the daily struggle for investors’ confidence and money. Furthermore, how well a company engages corporately through social media is a competitive issue – both as a risk to be managed properly and an opportunity to gain advantage.

It’s therefore an important issue not just for corporate communicators and marketing directors but for company Chairmen, CEOs, Finance Directors and their Boards.

And because of that, we’re really looking forward to seeing how the FTSE 100 stack up!

Recent pre-Winter price hikes of over 10% in the UK have put the spotlight on electricity and gas suppliers – and put pressure on their relationships with customers. So for this week’s Sociagility Social Performance Index we have focused on the 26 energy companies serving Britain, according to Which?, comparing them all to see which ones are using social media best to engage and interact.

Our findings show that it’s one of the lesser known brands, Ecotricity, that tops the social charts with the strongest engagement score and an SPI almost five times the average. British Gas commands the highest awareness levels and Scottish Power was the most receptive brand over the week.

Just eight of the 26 companies recorded a Social Performance Index (SPI) score above the average, with overall leaders Ecotricity and British Gas outperforming the rest of the group by a considerable margin. When it comes to Awareness Quotient (AQ) and Engagement Quotient (EQ) scores* however, the two brands show strength in different areas with British Gas having greater awareness (as one might expect) but the lesser known Ecotricity achieving higher engagement.

There is a further contrast a little lower down the ranking. Scottish Power – with a higher EQ than AQ score – is punching above its weight, whereas nPower – with a lower EQ than AQ score – is perhaps relying too heavily on its heavyweight status, with comparatively lower levels of engagement.

At the bottom of the table, a number of brands are struggling to differentiate, despite using all four social media channels analysed. LoCO2 has perhaps the biggest task on its hands if it is to improve its social media performance.

Has ‘the City’, that bastion of British financial institutions, heard about social media yet? Well some parts certainly have. The Bank of England, the Financial Services Authority and the City of London Corporation itself have all embraced social media to at least some degree.

But what of the big companies listed on London’s Stock Exchange?

Anecdotal evidence is that participation is patchy so we thought we would carry out a comparative study of the FTSE-100, the largest UK-listed companies.

Many of these companies own famous and well-promoted consumer and B2B brands but we’re keen to focus on the City/corporate social media profiles (i.e. the owned social media) that serve the entity which is actually listed on the London Stock Exchange.

So, this week we’re contacting all the FTSE-100 companies we can (unfortunately some don’t list any contacts at all on their websites!) to help validate the online profiles we’ll be assessing as part of our biggest comparative analysis of social media performance yet (here are some of the others).

Then next week we’ll start our research and, by the end of November we hope, we’ll publish the results.

If you want to register now for the report, just send an email to [email protected].