A Social Divide in the City: 2019 Edition

Mining for Impact

The seventh edition of FTI’s Social Divide in the City report reveals new insights relating to the social media performance of the UK’s FTSE 100 companies, with paid-for activity on the rise, and the mining sector in particular coming to prominence with impactful content and a focus on engagement.

We were pleased to have been joined this year in assessing 2018’s full- and half-year results reporting by Dr Pawel Bilinski of the Centre for Financial Analysis and Reporting at London’s Cass Business School. Reviewing our performance data for each constituent of the FTSE 100 alongside the share price performance and analyst ratings pre- and post-results for the last five years, Dr Bilinski argues that social media communications around results can lead to a stronger price reaction, particularly for firms with high retail ownership, while Twitter plays a role in investors reacting more strongly to news content.

Our analysis leads us to suggest that, while positive news is more likely to be communicated on social media than negative news, where negative news exists, posting on Twitter can help to minimise the impact of a negative price reaction. We can therefore say that companies use social media in a strategic way to communicate with investors when they know there’s a positive story to tell, but should also be making sure to create content when performance is worse than expected.

In a year when the overall number of results-related posts declined, engagement increased markedly as corporates deployed video, live streaming and more dynamic content to land their messages, making strategic choices about the volume and cadence of messaging. For every results-related post shared on Twitter, for example, the average engagement was 160 likes, re-tweets or comments.