Monday, 4 April 2016

Weekly Wrap Up: Predicting the future with social media

Last week it was revealed that a new trading platform,, aims to inform traders about potentially market-moving events hours before they hit mainstream news outlets. How do they do this I hear you ask? No, not through a call center like room filled with psychics. The platform simply tracks social media conversations.

I use the word ‘simply’, as the website actually analyses 22bn bits of data every day from various social media channels, including twitter and blogs, alerting users if it spots a spike in activity or sentiment. So, just a bit of light cyber stalking then.

Closer to home, such technology could change the way PRs handle crisis communications for their clients. Imagine if your organisation’s communications advisor could pick up a potential crisis situation before the press did, even if it was only by an hour or two. That way you and your advisor would have between 20 and 120 minutes (that is the length of time estimated by between the event being flagged and a price movement) to calm the waters, correct the error, prepare for the storm, and mitigate the situation.

The platform uses an example that it identified the Smiler roller coaster crash at Alton Towers within minutes, nearly an hour before media reports were published and Merlin Entertainment’s share price dropped by 10pc. Another example where the algorithm caught on was with the public opinion fallout regarding Volkswagen. By picking up the words “recall”, “pollution”, “cheating”, “EPA”, “scandal”, “tests”, “pollution” and “emissions”, the platform caught wind of the potential story around two hours before markets closed that Friday. News outlets subsequently picked up the story after trading hours and shares in the car manufacturer had fallen 16pc when markets opened on Monday.

However Gareth Mann, Chief Executive of stresses that “it’s not a predictive analytics engine, it’s an indicator that something’s going on that you need to look at.” In case you were wondering too, the algorithm, which continually evolves and learns as it goes along, uses only 10pc of the data available to it, ignoring information that would not be relevant to the markets such as a person tweeting ‘I don’t like my phone’ compared to a conversation about company results or a CEO’s behavior.

If this technology is proved to consistently work, it is a real game changer for all industries that involve reacting to unexpected human or business catastrophes. That also includes the media, who wouldn't want to miss out on this prediction tool. This shows how much social media has taken hold of our daily lives. We look to social media platforms for news and more specifically flash news before traditional media outlets. Even the press now look to these areas by way of informing themselves.

Social media platforms are becoming the first port of call where customers or the public make complaints or voice their grievances, therefore it is important for organisations to be fully engaged with these outlets in order to get a better grasp on public sentiment that could potentially affect their reputations. Perhaps it is time for the communications industry to adapt this technology so that in the near future, it can benefit clients and Companies by helping them to be better prepared to respond to special situations.

Last week, Crowe Clark Whitehill appointed Lisa Mead as its Private Client tax partner. Ashurt appointed Nick Elverston and Amada Hale to its global TMT team.

Cyber stalking – The action of searching for people online in order to find more information about them whether this is for business purposes on LinkedIn.

Sunset Boulevard
Glenn Close will be performing in her West End debut in Andrew Lloyd Webber's celebrated musical Sunset Boulevard at the London Coliseum 1 April–7 May.

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