“In this age, in this country, public sentiment is everything.” – Abraham Lincoln
Public perception of a company is relevant to both the company and its investors. Brands have value. Products sell when people talk about them. Before social media we had to rely on surveys and other active measures to determine public sentiment. Today with the popularity of social networks we can automatically gather and evaluate what people are saying about a company and its products. This is called social media sentiment analysis.
Sentiment Analysis
Posts are added to social media at an incredibly high pace. Imagine searching Twitter for just one popular company. In that moment, reading through a sampling of posts, you can gather what people are saying and how they feel about the company. Now imagine searching throughout the day and night to see what’s trending. And doing that for all of the companies you invest in. It’s more than anyone could handle.
That’s where automated sentiment analysis comes in. The vast amount of computing power available today combined with the latest in machine learning technology can be leveraged to watch social media for us.
Now we can do more than just watch the news. We can see how people are reacting to it. Beyond just sales numbers we can analyze customers’ posts about their products. After a product launch we can immediately gauge public reaction. All of this activity on social media can affect sales and brand value.
Disney
Let’s take a recent example: the opening of Star Wars: Rise of the Resistance at Disney’s Hollywood Studios. We can read the reviews and news after the fact, or we can go straight to the source and watch the public reaction.
The DIS chart for the first half of December tells the story.
Social media activity for Disney was already generally positive from the earlier launch of the Disney+ streaming service. On opening day of the new Star Wars ride, December 5, we see a huge spike in positive social sentiment. On the bottom chart we can also observe an increase in likes and shares of social posts. Fans are clearly excited for the new ride and visitors are enjoying it.
Not everything went smoothly for Disney. Outages and delays at the ride impacted patrons the following days. We can see the corresponding drop in social sentiment. Comments from customers are still positive overall, but tempered by the issues at Hollywood Studios. The SocialSentiment.io charts reflect the aggregate sentiment, taking the popularity of posts into account.
Just based on this sentiment analysis it’s likely that theme park ticket sales for this company will rise. That’s valuable and actionable information.
Daily Tracking
There are a number of activities which investors should watch on social media:
* Product launches which trigger positive sentiment can drive up sales
* Reviews from influential posters can affect the bottom line
* Reaction to company news
* Stock analysis and trades are often posted directly to social networks
One way to keep track of stocks on social media is to visit aaii.com. Charts are updated daily. Keep a watch list and get notified of the most significant activity on social networks by signing up.
Don’t just track the news. Keep an eye on how people react to events and it will add another valuable angle to your investment analysis.
