Questions Raised By Cogent's Social Media Research

On Friday Cogent Research released high-level findings of its recent research about social media and affluent investors. I tweeted about the research and posted a LinkedIn status update about it, but I couldn’t quite shake some questions it raised for me.

The work has me thinking about social media measurement, the role that social media participation plays in an overall communications mix and the impact to date of social media in the investment industry.

None of my comments below challenge the Cogent results. (In fact, with so many factors in play, it’s comforting to normalize on something. Cogent’s work is proven, and the firm consistently poses intriguing survey questions.)

The results are what they are, but what are they? Cogent Project Director Remy Domler Morrison patiently answered two rounds of questions emailed from me, and I want to share what I learned and what I’m thinking about.

Affluent investors are moved to take action

First let’s dispense with the more intuitive findings—there's continued progress on investor adoption of social media. 

  • Affluent investors were the focus of the survey. Cogent found that one-third (34%) of those surveyed are using social media platforms like Facebook, LinkedIn, Twitter, YouTube and company blogs specifically for personal finance and investing (PF&I) purposes. Four thousand investors completed the survey, Morrison said, “but many of the questions about social media for personal finance and investing (PF&I) purposes were asked among those investors who said they regularly used social media specifically for PF&I purposes. That number is about 1,340.”

  • And, nearly seven out of 10 of those who do use social media “have reallocated investments, or began or altered relationships with investment providers based on content found through social media.”

Awesome. Content published using social media and/or promoted with social media is reaching investors, and they are taking action as a result.

An advanced look at social media success

This research suggests that there is a return on what has been a significant investment for regulated financial services companies that have dared to go where few had gone before. For the firms on this list, this is an atta-boy on their social media strategy. (Of course, from my perspective, all investment firms using social media today deserve props.)

What’s giving me pause is Cogent’s ranking of the top 10 brands that have created the most positive impressions.

Top 10 Brands With Highest Ratio of Positive to Negative Impressions on Social Media

  • 1. Fidelity Investments

  • 2. ING

  • 3. Vanguard

  • 4. USAA

  • 5. Charles Schwab

  • 6. John Hancock

  • 7. American Funds

  • 8. Wells Fargo

  • 9. T. Rowe Price

  • 10. Janus

Source: Social Media's Impact on Personal Finance and Investing 2012, Cogent Research 

The composition of the list surprised me for the reasons I break down below. This is a long post and it may test your patience. But I understand what happens inside a working group when a ranking like this is published, and I think it's worth us all discussing to see what can be learned.

The research and the ranking it produced sheds light on what has not been easily measured.

Skeptics about the appropriateness of social media for investment brands go right to its big tent nature—why would a firm bother with social media when its audiences are targeted, including affluent investors, institutional investors or financial advisors? Further, it’s been unknown whether social participation would resonate. This research provides insights on both. It's an advanced look at social media success, if you will.


Note: I don’t have a dog in this fight. PIMCO, whose dominance on Twitter has been well documented, and iShares (who's all-in with its blogging and social sites’ presence) are two firms that I would have most expected to see on this list. Rock The Boat Marketing hasn't worked for either firm.

The scope of the survey

The first thing you’ll notice about the list is that the brands are not asset management brands exclusively. Morrison explained that survey respondents were provided with about 80 financial services brands to select from including “most bank, distributor, advisory, mutual fund, ETF, and other investment firms from [the Cogent Investor Brandscape study] and a number of the largest insurance firms in the country."

"We only defined the companies as financial services companies, showing just the major brand name (so just 'Wells Fargo,' not 'Wells Fargo Private Bank,' 'Wells Fargo Advisors,' etc.)," he said. Ah, Wells Fargo is on the list maybe because of the bank's long-time social media presence and not because of Wells Fargo Advantage Funds' singular offering to date (albeit an excellent blog).

In answer to a specific question about ETF providers, Morrison said, “A number were included, though firms with more of an ETF focus were not recalled as often as distributor and advisory firms that also have their hand in the ETF bucket, like Fidelity (who just joined the ETF-hand-bucket group), Vanguard, Schwab, TD Ameritrade, and so on.”

Firm size as the X factor

The firms on the Top 10 list are among the largest and yet there’s no doubt in my mind that taking part in ongoing conversations has elevated the relevance of smaller asset managers who lack the resources to compete dollar for dollar in traditional media.

“What do you think about the potential for a social media-using smaller firm to break onto this list?” I asked Morrison.

His response: “Size clearly played a role in brand-related exposure recall. The bigger the firm, the more likely people are to follow it, talk about it, hear about it, etc., so we see higher levels of exposure for bigger brands.

"I think that social media is a great way for smaller businesses to get their name out there and make a name for themselves, especially if they can produce unique content that engages consumers and that consumers want to share or talk about. For investment/financial firms in particular, it may be a little different (you’re making me wish we asked about specifically learning about new firms via social media)."

Social media and top-level awareness

The majority of the 10 firms on this list are firms that were mentioned in work Cogent produced last year. Its 2012 Investor Brandscape, based on a survey of the "investment momentum" of affluent investors, predicted mutual fund gains for Vanguard, T. Rowe Price, Fidelity, American Funds, Wells Fargo Advantage Funds, Schwab/Laudus Funds, J.P. Morgan Funds and ING Funds. Only JP Morgan is missing from the list of firms producing the most positive impressions in social media.

My question to Morrison: “Do you think investors’ predisposition to these firms in general influenced their impressions of how they do in social media? This could have bearing on our understanding of whether social media to date has been able to create awareness.”

His reply: "I do feel that investors’ predispositions to firms/brands would influence their impression of how well the firms’ do on social media, as well as their impression of the brand-related content they seek and find on social media for those firms.

"However, I don’t have the data to back up that claim right now. However, I could look at the correlation between investors’ impressions of these firms overall and tie that back to some of our social media data—might put that on my to do list, actually.

"In any case, I want to reclarify that the impressions we’re measuring here, while influenced by a brand’s social media activity, are capturing more than just investors’ impressions of that activity, but also their impressions of the content regarding that brand at large. It’s actually possible that our own predictions a year ago, or the actualization of those predictions, inspired a lot of chatter about the brands that reflected favorably on them, and we see the resulting impressions of that commentary here."

Are social communications distinguished from others?

I wondered how confident Cogent was that investors were actually distinguishing between social media activity and general firm communications and brand activities.

Morrison’s response: “I’d say that there’s a lot of evidence...Before reaching even the first question regarding brand exposure recall, investors would have answered about 30 or so questions specifically about social media, their use of it for personal finance and investing purposes, its influence on their financial decisions, what they look for using it, all both in general and by specific platforms.

"The questions regarding exposure to brand-related content are spelled out in almost exhaustive detail with examples. Though our nets were broad in terms of content exposure, they were no wider than the specific social media platform streams we threw them into."

Not all activity can be seen

A favorite question of firms contemplating a social strategy is "How often will we have to post?” It's a question with a simple answer: “Often enough to be effective.”

Making the assumption that the content will be high-quality, overall we have intuitively believed that activity leads to followership which leads to influence and relevance.

But, this report suggests at least three points:

  • Lower levels of activity may be sufficient to make an impact.
  • Perhaps some activity is happening in private networks, available to affluent investors but not observable by the rest of us. If this were a survey of financial advisors I'd definitely expect participation in private LinkedIn groups to be a factor.
  • Tools that are available to help brands understand, measure and benchmark their relative effectiveness have limitations across the board. There’s limited value in them for tracking investment firms because of the shadowing that we know is going on. Other research has found a significant group of financial advisors who are paying attention to content shared via social media but passively. They haven't established accounts, primarily for Compliance reasons. Possibly investors, and affluent investors in particular, also follow in a way that can't be counted. 

American Funds, Janus and John Hancock earned a place on the Cogent list, despite a lack of dominance on any of the top social networks as evaluated by out-of-the-box measures.

American Funds has 4,200-plus Likes on Facebook and about 70 YouTube videos, 159 YouTube subscribers and little more than 10,000 views. The firm has no blog and no Twitter account. By contrast, Franklin Templeton has 23,500 Facebook Likes, 512 subscribers and almost 53,000 views of about 30 YouTube videos, 4,100 followers on Twitter and a few blogs. More than 15,000 follow Franklin Templeton on LinkedIn versus American Funds' 2,061 followers.

Only the Top 10 firms themselves know the composition of their investor base. Only they have a view into the effectiveness of their activity, and into the consumption of content published on their Websites.

Morrison provided this elaboration: “Though not a part of the report itself, we did do some pretty extensive research on the presence and activity of these brands on the various social media platforms. What we found is that brand presence is more than its number of followers, and its activity is more than something like posts per day.

“While those things do matter, a brand’s real presence also includes what everyone is saying about them and, in addition to how much social media content a brand produces, how a brand chooses to respond to what’s said about them influences perceptions of its online activity. The positive-to-negative impression ratio gives us a quick look at how these investors feel about each brand’s wider presence and activity.

“Even though American Funds, for instance, may have a smaller following and produce less content, there’s still a lot of chatter and news being passed around about it, and what American Funds does produce, and in how it responds to what’s said about the firm, is being well received by most investors who’ve encountered that content.”

What does online influence have to do with it?

As one measure of online influence, many B2C brands have turned to Klout. Klout is a system that claims to incorporate 400 social signals (i.e., re-tweets, Likes, etc.) from seven social networks to derive a Klout score for social accounts. The scale is one to 100, with 100 being the most influential.

It's an interesting initiative but I don’t cotton to it, certainly not as a reliable barometer of what’s important to firms in this space. The Cogent findings also suggest that online influence may have little to do with brand impressions.

Participation in Klout is optional and some asset managers, including Fidelity, have no Klout score. But among investment companies that do, iShares has the highest—an 80 Klout score. Second in influence is PIMCO with a score of 69. Vanguard, #3 on the Top 10 list, has a score of 65 (@Vanguard_Group) and 54 (@Vanguard_FA). 

Negative sentiment?

The elephant in the Top 10 list is the qualifier that this is a list of firms that are making positive impressions. I do a fair share of monitoring, and my hunch is that the industry overall does not suffer from negative impressions created by social media.

“Did your research reveal anything you can share about negative impressions—are there any social media-using firms that seem to be hurting their cause?” I asked.

Here’s Morrison’s response: “Some background research suggests some hypotheses, but I’ve not dived too deeply into what is generating negative impressions for some firms. Though I can’t go into specifics, I know that some firms with the lowest positive-to-negative ratio of impressions of recalled brand-related content had a number of unflattering public relations stories being passed around about them, and a lot of complaints (either regarding specific customer service issues or general responses to recent firm actions/decisions), posted to their Facebook pages or Twitter feeds.”

In other words, it's not the brands' use of social media that's creating the negative impressions. It's social media users' commentary that may require some attention sooner rather than later.


We are just at the beginning of understanding what social participation can and cannot do for an investment firm in a competitive and noisy marketplace. Of course, the instinct is to look to the right and to the left to gauge your performance against everybody else. I would fight that instinct and instead focus energies on what you know, what you can control (including what you can produce and share) and measure.

What are your thoughts?