Social media key to corporate performance
A new report on the social media performance of the FTSE 100, Social Media in the City, concludes that the majority are at a competitive disadvantage by failing to engage effectively at a corporate level with social networks like LinkedIn, Twitter, Facebook and YouTube. It also suggests a link between social media performance and share price movement.
The report, based on a quantitative research study by social media consultancy, Sociagility, says that two-thirds of FTSE 100 companies perform below the average for their peers. However, the group also includes some high performers. Royal Dutch Shell leads the pack, followed by AstraZeneca and Sainsbury.
The research was conducted in November this year in association with the Public Relations Consultants Association (PRCA). It used the 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 network based on more than 50 public metrics and combined to create a Social Performance Index (SPI) and other rankings.
Leaders and laggards
The overall 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, 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 of its constituents, Aviva, even makes the SPI top 30.
Social media performance a lead indicator for share price movement?
The 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.
Previous Sociagility studies have shown similarly close correlations between PRINT™ scores and measures of brand value and growth, as well as market share.
LinkedIn – an ideal corporate social media platform?
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.
Corporate social media performance is a competitive issue
The Social Media in the City study argues that a good corporate social media performance is a competitive issue. Co-author of the report and Sociagility principal, Tony Burgess-Webb, said:
“Social media are playing an increasingly important part in the daily struggle for stakeholders’ confidence and support. How well a company engages is therefore a competitive issue internationally – both as a risk to be managed and an opportunity to gain advantage. This is as important for the C-suite as it is for corporate communications professionals.”
Francis Ingham, Director-General of the Public Relations Consultants Association, added:
“The performance of the FTSE 100 companies shows that whilst some are doing well, almost everyone can do better. PRCA research earlier this year revealed that nearly 1 in 5 board members still do not understand social media. We have now reached a time where social media must be seen as a fact of everyday life for companies communicating their message and managing their reputation.”
The Social Media in the City report and FTSE 100 Social Performance Index can be found at http://www.sociagility.com/ftse100.