Social Media Metrics and Corporate Transparency
By Enrique Bonsón and Francisco Flores
The concept of corporate dialogue in a web-dominated world presents information professionals with a new situation regarding corporate information. Social media encourages corporate transparency. On the web, companies can offer their various stakeholders (shareholders, other investors or depositors, analysts, employees, customers, suppliers, public agencies, ecologists, and citizens) the possibility of analyzing the information on its activities made public by the company. It enables these stakeholders to express their own opinions publicly in the same virtual space. In our opinion, global banking firms in particular, which are under close scrutiny by some stakeholders following the recent economic crisis, could take such a step forward by implementing the so-called corporate dialogue as a means of recovering, on a solid basis, the trust they have undoubtedly lost.
The term Web 2.0 dates from 2004, coined by Tim O’Reilly to refer to a second-generation web that encouraged information sharing and reuse. Technologies such as RSS (really simple syndication), podcasting (syndication of audio content), mashups (combinations of pre-existing applications), folksonomies (popular labeling or categorizing systems), widgets (web tools embedded in other sites to perform a particular function), and sharing facilities (options for redistributing the contents of websites to other users) helped define Web 2.0.
From this technological base sprang social media tools such as blogs, social bookmarking, and wikis, as well as media sharing and social networks that promote collaboration, joint learning, and the speedy exchange of information among users.
David Stuart (“Social Media Metrics,” Online, Vol. 33, No. 6, November/December 2009, pp. 22–25) identifies the core set of social media as blogs, wikis, social network sites, and microblogging. He recognizes that they are powerful tools but states that their impact and value is not always easy to measure. In fact, Marydee Ojala (“Business Research 2.0,” Online, Vol. 32, No. 2, March/April 2008, pp. 45–47) points out that, in a 2.0 environment, discovering information and validating it are twin problems. This could, in principle, make it difficult to analyze the extent to which the leading corporations use social media.
In this context, we carried out an exploratory analysis of the use of social media by leading financial corporations. We consider the financial entities to be of special interest, given their high profile and role in the current economic situation. Hence, we analyzed the financial entities operating on the global scale. We have examined 46 entities listed by STOXX (www.stoxx.com), of which 23 are European and 23 are North American. The metrics utilized are the primary indicators provided by each platform.
BROAD SET OF METRICS
Instead of comparing the results of certain metrics with others, we utilized a broad set of metrics and made comparisons between entities. Recognizing that each of the two samples, North American and European, are heterogeneous, the results obtained from each are shown in the table. The metrics are used to detect the existence of the applications studied at two possible levels, passive and active, in the social media sphere:
• Passive existence or conversation: This consists of detecting the name of the entity in the conversations that are taking place in the blogs indexed by Google Blog Search, Twitter (figures of tweets obtained through SiteVolume), or the entity’s passive presence by contents. That is, contents relating to the entity that are generated by online communities as YouTube videos, Facebook groups and pages, and LinkedIn groups, all of these without the support of the corporation in question.
• Active existence or direct presence: This involves locating official Facebook pages or groups, LinkedIn groups of current employees, Twitter channels supported by the entity, and various metrics related to them.
On all the social media platforms, we searched the official name of the entity as provided by STOXX.
The principal results of this exploration can be summarized as follows:
• The entities present diverse types of behavior, with high percentages of complete inactivity with respect to the social media, both in North America (30%) and in Europe (13%), and with much variability within each group.
• The European entities have a greater active presence on Twitter and Facebook, whereas the U.S. corporations appear more on LinkedIn with active communities of employees.
• With respect to passive presence, the YouTube videos refer more frequently to U.S. entities, whereas the blogs indexed by Google make reference on more occasions to the European banks.
• In general, the activity of the entities, when they are present actively on the platforms, is not very intensive, with averages close to a half-yearly post; this leads one to think that these are initiatives that are very much on the mere threshold of their potential; the active presence data are from 2007 and 2008 in the majority of cases.
• There are some entities with a very significant presence, both active and passive, that are acting as leaders in this new initiative, but they still focus on the commercial aspects of their corporate communication. They don’t provide financial or other information relevant for analysis by their various different types of stakeholders; their main concern is the customer.
With particular reference to these pioneering banks, the following aspects of interest can be highlighted:
• Bank of America (BOA) has more than 7,000 followers on Twitter, established as a service for attention to the customer; has more than 3,600 members in its Facebook group, which is aimed preferentially at employees and students of its training systems but which is also open for the public to participate in; almost 1,000 people have contributed to the corresponding Facebook page; and BOA also has more than 12,000 members in its LinkedIn group.
• Citigroup has 3,600 followers on Twitter and actively utilizes the platform for publishing employment opportunities. Its Facebook group has more than 5,500 members. There are also some 15,700 members of the LinkedIn platform, facilitating communication between present and past employees, and these in turn are divided into more than 20 subgroups, such as one for veteran employees with more than 25 years of service in the entity.
• JPMorgan Chase has 880 fans on its Facebook page, where customers and prospective employees post doubts on banking activity and the users themselves resolve these doubts; it also has a LinkedIn group with more than 6,000 members.
• BNP Paribas has 2,500 members of its Facebook group, and there are nearly 112,000 fans on its Facebook page who offer videos, references to cultural events, and other relevant information and opinions; there are also some 2,100 members on LinkedIn.
The principal financial corporations in America and Europe present disparate attitudes, with certain entities playing the role of pioneers and with a high degree of concentration of efforts on the commercial area. In the current context of crisis, only some of the global-scale financial entities are marking out positions in the new social networks as preferred marketplaces.
HOW THE BANKING INDUSTRY COULD USE SOCIAL MEDIA
What is certain is that the new technological base is now available to all companies, allowing them to take action on two fronts—the mass distribution of the content of the corporate website as an amplification of the pre-existing unidirectional system and the implementation of corporate dialogue.
In the first case, companies can make use of the Web 2.0 technologies to facilitate the mass redistribution of content, making them more visible but staying with a unidirectional model. An example of this approach is the implementation of functionalities that allow users to redistribute the contents of a corporate website in their own blogs or social networks (like ShareThis) or to syndicate them (using RSS or Atom). The object is to have updated information available at all times. This approach is not true dialogue but does involve the much greater expansion, if appropriate, of the corporate website content.
In the second case, the use of the social media represents the utilization by the company of social network platforms to open up corporate dialogue. They could, for example, generate Facebook and Twitter groups and pages, YouTube channels, or SlideShare and Docstoc spaces. Another option would be to create blogs where not only the members of the management but also individuals associated with the principal groups of stakeholders would have the opportunity of publishing their own points of view on the material distributed. In the implementation of a strategy for corporate dialogue, as stated by Joel Postman (SocialCorp: Social Media Goes Corporate, Berkeley, Calif.: New Riders, 2009), use of social media can lead to increased transparency and immediacy and can make it possible for all the users to participate and get involved directly in the process of communication through the contribution of contents, comments, tagging, etc.
Even though the stakeholders may have available the best sources of digital information (such as XBRL reports) for performing their own analyses, the corporations still do not allow feedback to their systems. They have not equipped the existing channels (social media) to make possible publication of the conclusions of those analyses on the same platform; that is, the concept of corporate dialogue (from the press room to the conversation room) is still only in its infancy. If we believe that every stakeholder is also a “customer” for a “product” called corporate trust, then this claim by Mitch Joel (Six Pixels of Separation: Everyone Is Connected. Connect Your Business to Everyone, New York: Business Plus, 2009) is very applicable: “When you engage in a conversation and treat your consumers with respect and as your peers, magical things will happen.”
NEW RESEARCH AGENDA
As a result, a new research agenda is emerging from this first exploratory analysis:
• It is becoming necessary to calibrate the instruments of measurement, the social media metrics.
• We will need to widen the study to other productive sectors and to the regulatory authorities.
• It will be useful to characterize the entities, evaluating their attitude toward the social media against a battery of financial and nonfinancial variables such as stock market capitalization.
• Similarly, it will be interesting to examine whether the tendencies apparent from the comments and conversation in the platforms studied are significantly influencing the way these firms are treated on the stock market.
For our part, we have been working on XBRL (eXtensible Business Reporting Language)—a language derived from XML for transmitting business information across applications—for 10 years. We have an academic perspective and collaborate with various companies and bodies at the global level. Now, firstly thanks to the arrival of Web 2.0 and secondly to the subsequent development of the social media, the ideal user of XBRL reports has finally appeared.
Eventually, the spread of these usage practices from the social media to the rest of the corporations, together with the growing relevance of these new channels, will lead to their utilization for distributing corporate information. This information will, in turn, be increasingly complemented with the perceptions of members of the public, who will become better equipped to process digitalized corporate information and to generate added value from it. One stakeholder group sure to benefit from the increased transparency is information professionals, who must begin to include social media when researching a corporation.