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.