DEFINITION of 'Social Sentiment Indicator'

A measurement based on aggregated social media data that helps businesses understand how they are performing in the eyes of their consumers - what they’re doing right and how they might improve - and gives investors an idea of how the company’s stock might perform. Social sentiment indicators help companies identify trends that they can use to target new customers, develop successful marketing campaigns, create profitable products and services and protect and improve their brand identity and image. Social sentiment indicators also help investors identify information in social media that could cause a stock’s price to increase or decrease in the near future.

BREAKING DOWN 'Social Sentiment Indicator'

Social sentiment indicators are based on information users post publicly to Facebook, Twitter, blog posts, discussion groups and forums. If the social sentiment indicator shows a negative change in reputation, the company can address the problem before it grows. Companies can also use this information to reduce the burden on customer service email and call centers by addressing questions and problems en masse via social media. Collecting information from social media about how consumers perceive a brand can help companies identify individuals or businesses who have a strong social media influence. By identifying those who are dissatisfied with the brand, the company can reach out, try to remedy the problem and hopefully improve its social sentiment indicator. They can also make contacts with these highly influential individuals with an eye to boosting their brand image in social media.

Social sentiment indicators can also help companies determine how successful a marketing campaign is by analyzing reactions on social media to determine whether they are spending marketing dollars wisely and whether they should pursue similar campaigns in the future. Social sentiment indicators can further identify how consumers feel about competitors and similar products, and companies can use this information to improve their own offerings. Also, by paying attention to what consumers are praising or criticizing about their products and services using social media and other online venues, companies can assess what to expand on and what to drop or change.

Sports and entertainment companies can also use social sentiment indicators that they share with customers to give them a more engaging viewing experience. For example, IBM developed a social sentiment indicator that U.S. Open viewers could use to see the volume and negative or positive trend of tweets about each player, giving viewers a real-time idea of how fellow viewers were perceiving a match.

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