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Social media in the city: Better social, better share prices – yet the FTSE 100 is losing out

Submitted by on December 5, 2012 – 10:31 am2 Comments

The majority of the FTSE 100 may be at a “competitive disadvantage” by failing to use social media networks effectively, a new report states.

According to Sociagility’s ‘Social Media in the City: Benchmarking the corporate social media performance of the FTSE 100’, while there are some good efforts from surprising sectors, “most” companies do not regard social media as important for corporate communications:

The research found that two-thirds of FTSE 100 companies perform below the group average on the major social networks, and that only one-fifth of FTSE 100 companies  have an active company page on LinkedIn.

And yet, the report found statistically significant correlations between social media performance and subsequent daily share price movement. In other words, the better the social, the better the share price.

As director-general of the Public Relations Consultants Association, Francis Ingham, states in the reports foreword: “To consider social media as irrelevant, or to continue to misunderstand it, places organisations at a competitive disadvantage to their rivals.”

Certainly this was previously known in terms of reputation, brand value and, for relevant industries, sales and revenue. Now though, with evidence that demonstrates a direct link between social media and tangible market value, will companies wake up to what the report calls the “social revolution”?

Many already have, and as the report indicates, in surprising sectors, too. Mining firm Vedanta and computer chip-maker ARM Holdings both appear in the top ten, with the highest performing sector pharmaceuticals and biotechnology, followed by oil and gas producers and retailers.

Of course, these are industries that are often the subject of debate and controversy, so it’s no surprise that they’re pushing the boundaries of social engagement in order to get people on side. It may be the case that ‘safer’ industries have, until this point, seen no merit in doing so. But as Ingham points out: “We should view social media as a fact of everyday communications… Senior managements and their communications teams must make it their duty not to be left behind.”



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