How social media influences the market: An analysis of the finance industry post-GameStop
There’s no doubt the GameStop saga caused quite a stir within the finance industry and beyond. From a communications perspective, I’d like to reflect on the reputation of the finance industry and what’s changed as a result of the incident. I’d also like to explore the sentiment towards different financial institutions.
It’s important to delineate between investment banks, hedge funds (including HFTs and other obscure finance organisations) and commercial banks. For all the flak that commercial banks get, on the whole, individual banks are pretty good at communicating with consumers, maintaining their reputation and avoiding healthy skepticism turning into outright criticism.
The sentiment around GameStop
Both professionally and personally I am compelled to regularly read the comments under breaking news articles shared on social media, and no matter what the cause or issues, I cannot recall a single story’s response being so absolutely one-sided.
When Isentia did an analysis of social media conversation relating to the GameStop saga, it found 88% of comments expressed an opinion about the topic supported the insurgent Wall Street Bets group. Approximately 50% of comments expressed a clear statement that hedge funds were losing at their own game and deserved no sympathy. The positively gleeful schadenfreude at the losses sustained by the hedge funds unified groups that in any other contexts would be building strawmen to attack each other in a never-ending battle of replies. Commenters in support of Wall St Bets floated conspiracy theories of the Democratic Party’s and Joe Biden’s personal involvement, while others called for the beginning of a socialist revolution. Robinhood closing positions and restricting trading in GME united such disparate voices as Alexandria Ocasio-Cortez, Ted Cruz and Donald Trump Jr., a potential dinner party for the ages that was cut short by AOC reminding Cruz of his role in the January 6th Capitol storming.
This reaction shouldn’t be surprising to anyone. Recent real-life examples, like the GFC have built up doubt in financial institutions like hedge funds and investment banks, and cultural representations of these organisations tend to be negative.
Opinions of Wall Street
Looking at Hollywood films about investment bankers and hedge funds, we see a list of negative depictions; The Big Short, Wall Street: Greed is Good, Wolf of Wall Street, Margin Call and American Psycho. Indeed, it’s hard to find a positive depiction of Wall Street and high finance with the possible exception of the Pursuit of Happyness.
Opinions of ‘Wall Street’ in the 2017 US YouGov survey, found that 77% of people believed that “most people on Wall Street would be willing to harm consumers if they believed they could make a lot of money and get away with it”, 72% believed Wall St financiers were more greedy and selfish than regular people. By contrast, in 2018, only 66% of 18-24 year olds and 76% of 25-34 year olds said they have always believed the earth was round. Put another way, you would possibly have more success on social media, arguing for a theory of a flat earth, than you would for the idea that there are ethics on Wall Street.
But none of this is new, those surveys are years old, people still talk about the open wounds of the GFC in 2008 and American Psycho was released in 2000. It may have ebbed and flowed at times, but movements like Occupy Wall Street didn’t feel like a response a single moment, but looked to address long-standing grievances. People have long been cynical about hedge funds and investment banks, and it doesn’t appear much has been done by the industry to improve the situation. Thought pieces on public relations and branding express exasperation with the financial services sector, generally acknowledging early in the text; ‘we know you don’t like it but here’s why you need it’, much like a dentist explaining flossing.
And who could blame hedge funds and investment banks for being ignorant in the modern world of communications? They are non-consumer facing businesses. They don’t have issues like other non-consumer-facing businesses (mining companies) that regularly seek community and environmental project approvals and face a highly organised and powerful climate change movement. They also don’t have an easy story to tell. The mining sector’s blue-collar jobs and regional economies have a more convincing message than providing liquidity to financial markets and diversifying risk.
The power of social media
So if the reputation hasn’t changed why would we suddenly talk about it from a communications perspective? Because the consequences have changed. The power of social media and accessible trading platforms has meant that suddenly the poor reputation of these firms not only makes them a target for activist financial consequences, but also an entirely unsympathetic one (again, 88% of commenters on social media supported the actions of Wall Street Bets, and celebrated hedge fund losses). The question of regulating future market distortions such as GameStop is made politically complicated by this sentiment.
The other thing that’s changed; the messaging is clearer. People often distrusted Wall Street, but the usual attacks of income inequality and regulation tend to be murky and complicated. The frequent usage of the word democratisation is probably the most interesting development in the entire GameStop saga from a communication perspective.
What about regulation?
Anyone who has studied or read about behavioural economics and knows about experiments in the Dictator Game will readily understand there is an innate drive towards fairness in our dealings with others, and perceptions of unfairness encourage us to punish the perpetrators, even if it’s to our own detriment. Thus, generating a clear narrative of unfairness is a powerful tool to generate support for a cause. The traditional attacks of income inequality are often the flagship of anti-Wall Street or anti-finance messaging and are often blurred enough to create a reasonable level of debate. Even if everyone agrees that regulation isn’t working, surveys in the US show deep divides between whether people believe the problem is about not enough regulation, not adequate enforcement of existing regulation, or if it’s the wrong type of regulation. This disagreement makes it difficult to build a clear policy of reform.
Democratisation, however, feels like it is a more powerful and clearer message. Propelled into the limelight most clearly by the actions of Robinhood, it asks a question of fairness that is far harder to obscure or dispute. We can argue whether or not the game is rigged, but no one can deny it’s unfair if you’re not allowed to play.
What’s next for investment banks and hedge funds?
As a communications professional I am interested in the development of the narrative of democratisation and accessibility, and how those who support regulation in the post-GameStop era find ways to attack this sentiment. I am also interested to see how investment banks and hedge funds respond. They’re clearly starting with a difficult story to tell. While none of this has been a problem before, they now need to find a way to communicate with the wider public, particularly young people. They also need to shift a narrative that has existed for decades if not longer. In this partisan era one might avoid consequences from the antipathy of either progressives or conservatives, but the concentrated and focused antipathy of both, united by a simple and powerful message, is something to be concerned about.
Responsible for providing clients with analysis of key messages, favorability of coverage, and the performance of proactive efforts for organisations to generate media activity.
Isentia, with its leading media intelligence and insights capacities, identifies the relevant trends and innovations in digital banking that digital banks in Indonesia carried out. The paper discusses how netizens responded to the trends and innovations relating to digital banking in Indonesia.
Fill up the form below to download the whitepaper and read more.
ISENTIA ID TRENDSPOTTING STUDY – From Invasion to Innovation: The Rise of Digital Banking
Isentia, with its leading media intelligence and insights capacities, identifies the relevant trends and innovations in digital banking that digital banks in Indonesia carried out. The paper discusses how netizens responded to the trends and innovations relating to digital banking in Indonesia. Fill up the form below to download the whitepaper and read more.
The state of the electric vehicle industry in Malaysia
Malaysia's automotive industry is one of the more environmentally-friendly industries. Various parties, such as the government and local automotive industry players, have continuously sought to promote electric vehicles (EVs).
The subject of electric vehicles (EV) is growing among the Malaysian public in the social media sphere due to continuous efforts to promote EVs by various parties such as the government, local automotive industry players as well as companies directly involved in several aspects of EV (charging facilities/networks etc.)
Using data from Pulsar, Isentia analysed the conversations surrounding the topic of EV amongst Malaysia's social media users.
In this word bank powered by Isentia’s vast datasets, some of the most common keywords used by Malaysians when discussing EVs, apart from the topic itself, are 'drive', 'chargers', and 'battery'. EV is also associated with ‘future’ and ‘expensive’.
Across the country, social media users agreed that Malaysia is lagging behind neighbouring nations (such as Indonesia and Thailand) in EV facilities and vehicle development. They also agree that EVs are only accessible to rich people in the country because of a lack of affordable options and that the Malaysian government and other players should do more to promote electric vehicles as a practical form of transportation.
What are the audience segments that have been talking about electric cars online?
Malaysian social media users who are more interested in electric vehicles are most interested in watching movies and TV. The three main audience segments include the Conservatives, Technology Enthusiasts, and Innovation Seekers. They are predominantly male audiences aged between 18 and 24.
They also have high media affinity with Malaysia's prominent media outlets, such as Astro Awani, Bernama, and technology-focused outlets, such as Amanz and Digital News Asia.
Conservatives follow social media accounts of mainstream news outlets and the government (ministers, ministries, agencies etc.) They believe government policies would benefit their daily lives, such as EV-related ones.
Technology enthusiasts seek out exciting posts on new technologies and actively participate in discussions surrounding them. They are advocates of technologies that would make the environment that they live in better, as well as efficient technologies.
Innovation seekers are actively sharing news and involved in conversations about innovations that enhance the development of industries relying on the newest technology. They tend to evolve their lifestyles accordingly and embrace innovations available at their disposal.
Several points between April and July 2022 peaked due to active discussions among Malaysians on EV:
Launch of Automotive High-Tech Valley on 14 April - The launch would assist in positioning Malaysia as a hub for EV manufacturers and component suppliers to the ASEAN market.
Foxconn announced plans to build a facility in Malaysia on 19 May - Taiwanese company Foxconn plans to build a chip production facility in Malaysia with Malaysia's Dagang NeXchange Berhad to fulfil the demand for EV semiconductors.
Criticism of parking at charging facilities on 10 June - There was criticism towards road users in Malaysia who parked their vehicles at EV charging facilities.
Samsung develops plant in Malaysia on 21 June - Samsung SDI Energy Malaysia Sdn Bhd announced that they are developing a RM7 billion plant in Negeri Sembilan to pioneer the EV battery cell industry in the country.
First Range Extended EV developed in Malaysia on 21 July - Mimos Berhad has developed the first Range Extended Electric Vehicle (RE-EV) in Malaysia with the cooperation of Motosikal dan Enjin Nasional Sdn Bhd (Modenas) and Universiti Malaysia Perlis (UniMAP).
Get in touch with Isentia today to learn more about what consumers are saying about your brand.
How the recent Therapeutic Goods Advertising Code is changing the rules around skincare advertising in Australia.
What has an influencer endorsement or testimonial influenced you to buy lately? Would you have purchased it otherwise? Well, you may see less of this type of advertising in the coming years in Australia. Using Pulsar's recent report on the online conversation on sunscreen and SPF, we can understand how audience intelligence and media monitoring can help organisations direct and target their messaging and operations in response to (for example) significant regulatory changes.
The code allows for genuine, unpaid testimonials in advertising. Still, it prohibits influencers from making testimonials or endorsements based on their own experiences due to using a product. They can only stick to communicating the product's aims and purpose as claimed by the product's labelling and instructions. The recommendation must also align with the product's purpose, as the Australian Register of Therapeutic Goods records.
So why is this happening, and how can influencers still operate under these new regulations? The TGA ensures that consumers can trust that recommendations are unbiased without the influence of incentives, including gifts. There is a further requirement for social media influencers to include mandatory statements in their advertisements depending on the type of product and its availability to the public. The TGA also highlighted that they aren't making any unusual changes but are just aligning advertising on new platforms with code that previously targeted more traditional forms of advertising.
The code requires all testimonials that are in breach to have been taken down by July 1st.
But some influencers have not taken to the new regulations well, believing the new rules will hinder a critical source of information for consumers and audiences. Australian sunscreen (Naked Sundays) owner Samantha Brett, told the Sydney Morning Herald Emerald City she believes sunscreen should be exempt from the laws asking, "How else will those who are influenced by social media, particularly Millennials who are most at risk of melanoma, be encouraged to use sunscreen every day."
On August 22nd, Got-to Skincare's founder Zoe Foster Blake posted a statement on Instagram to announce the release of a new SPF 50 sunscreen product and how the code impinges people's sun protection practices and knowledge.
“I believe elements of the code have the potential to reverse the momentum public health, cancer awareness groups, and skin specialists have been building for years to ensure Australians wear sunscreen daily”.
Foster-Blake goes on to highlight how some still find sunscreen polarising and unappealing.
“Many consumers still believe sunscreen is gross, thick, greasy. It’s not.”
But are younger demographics, influenced by social media, confused about sunscreen use? Social discussion would say the answer is yes. Where to apply, how many times to reapply and in what settings is wearing sunscreen necessary are some questions people are asking.
Social media conversation around sunscreen is evolving and recorded by Pulsar as a therapeutic good that goes beyond a necessary use case. Sunscreen is feeling the influences of climate change activists and holistic beauty trend-setters tied to long-term health values.
Promoting sunscreen and daily SPF use on social media has a positive impact on long-term health and beauty maintenance and protection against skin cancers; 51.1% of Australians' reasons for applying sunscreen, as discussed in online conversation, is to protect against skin cancers.
There is still confusion around SPF levels and growing concerns around online conversation promoting misinformation that sunscreen use increases the likelihood of ailments like melanoma, reportedly one of the most common cancers in young adults.
Social media conversation and prolific posting of beauty & wellness-related content frame spaces where skincare brands can find their niche. Brands like Cerave and Supergoop are finding ways to differentiate their branding to appeal to specific communities (meet their communities in the full report). Is this new code holding social media influencers to account for their sway over masses of followers? Or is it taking away a vital information-sharing source? Time will tell if the regulations will significantly impact beauty and wellness influencer marketing in Australia. However, the effects may be taking hold now. If you look up sunscreen and SPF on tiktok, you will notice a decrease in related content since the end of 2021.
Avoid the risk of getting burnt and check the code to ensure you’re not in breach.
Will wellness brands need to rethink how they use and apply influencer marketing?
How the recent Therapeutic Goods Advertising Code is changing the rules around skincare advertising in Australia. What has an influencer endorsement or testimonial influenced you to buy lately? Would you have purchased it otherwise? Well, you may see less of this type of advertising in the coming years in Australia. Using Pulsar’s recent report on the online […]
Sustainability in businesses, and where to draw the line
With consumers taking more of an interest in living a sustainable lifestyle, many companies are prompted to take steps to reduce their environmental impact and embrace sustainability.
However, what happens when companies make false claims that they are more sustainable than they actually are? This is where greenwashing comes in. Greenwashing is when a brand frames itself to be environmentally conscious for marketing purposes but is not making any notable sustainability efforts.
We analysed conversations on greenwashing among Malaysia's social media users powered by Pulsar's data.
Our study shows that the term "greenwashing" is not as widely used when consumers call out practices that mislead the people with positive communications on environmental and sustainability practices when it is not.
'Investment', 'banking', 'ESG', and 'sustainability’ are just some of the keywords most commonly used when Malaysians talk about greenwashing.
Consumers tend to be sceptical and raise concerns with sustainability claims as they question the effectiveness and legitimacy of such initiatives. Some have linked such "green efforts" as a tactic for cost-cutting and even for financial gains.
Malaysians talking about greenwashing online lean slightly more towards males. In terms of age group, the 18 to 24 years old have shown stronger interest in the topic.
They are most interested in watching movies and TV and have high media affinity with some of the nation’s prominent media outlets such as Astro Awani, The Star, and Bernama. They tend to be sentimental, particular, and analytical.
The top three audience segments we have identified talking about greenwashing are The Green Lovers, The Informers, and the Activists
The Green Lovers who are passionate about sustainable lifestyle are highly interested in entertainment and social issues. Their choices are driven by a desire for well-being.
The Informers, on the other hand, follow media outlets such as Astro Awani, The Star, and Bernama and tend to share content that concern the people with their networks. Their desire for organisation drives the choices that they make.
The Activists describe themselves as advocates for social issues. They follow political figures such as Khairy Jamaluddin, Syed Saddiq, and Hannah Yeoh. They are philosophical, authority-challenging, and empathetic.
Despite having different interests, their purchase decisions are likely to be influenced by online advertisements, brand names, and social media.
Sustainable businesses are focused on continuous improvement and long-term goals. They seek to promote the health of a company and the community in which it operates while balancing these goals with the need to develop profit.
However, despite efforts to campaign for sustainability and adhere to ESG (Environmental, Social, and Governance) standards, some industries such as banking, oil and gas, and fast fashion have been called out for greenwashing. Consumers have also pointed out initiatives such as the RM0.20 plastic bag pollution charges by the public sector for missing the ESG mark for seemingly profiting from the use of plastic bags.
Generally, these sectors have been criticised for failing to fulfil their 'green commitments’ adequately.
Greenwashing can be harmful to a company’s reputation in the long run. As many consumers are focusing on ‘conscious consumerism’, companies are expected to live up to their sustainability goals.
Get in touch with Isentia today to learn more about what consumers are saying about your company and brand in relation to greenwashing.
