narrator: So far, 2020 has been a difficult year to say the least. The COVID-19 pandemic, economic collapse in various countries, Hong Kong autonomy protests, protests against police brutality and racism in the United States, and a massive chemical explosion in Beirut have all shaken public consciousness. Some of the major events and conflicts that have dominated. slow. So it’s not only a turbulent time, but an emotional one, and it’s no surprise that the way we talk on social media reflects that.
Chicago Booth’s Pradeep Chintagunta and his co-authors have been testing the positive emotionality of tweets and how they changed from January to May 2020. And, perhaps to no surprise to most people, tweets are down.
Pradeep K. Chintagunta: There are many different ways of thinking about positive emotions. Back before computer text analysis was possible, people would look at the text of a document and try to count the number of words that expressed positive emotion and the number of words that expressed negative emotion. Of course, this is very difficult to do if you have a large amount of text. Nowadays, with computer-aided text analysis, the only option is to use software to help with this.
So in our case we used something called LIWC. LIWC actually stands for Linguistic Investigation and Word Count. And it tells you the percentage of words that contain positive emotions in the document.—“I’m happy” etc.— words with negative emotions— “Sad”, “Unfortunate”, etc. This software allows you to calculate the percentage of words that express primarily negative or positive emotions within a particular document or tweet.
narrator: On May 25th of this year, George Floyd was killed by Minneapolis police officer Derek Chauvin. This event sparked a highly agitated and polarized racial equality movement in the United States.
Many activists have taken to Twitter to slam companies and pressure them to take a stand against racial inequality, putting them in unfamiliar territory.
Pradeep K. Chintagunta: Companies try to avoid highly controversial matters, primarily because of the considerable degree of heterogeneity among their customers, employees, and other stakeholders. Therefore, it has always been somewhat difficult to take a politically or socially stigmatized position.
Some companies clearly responded. They reacted in distinctly different ways. I think many of the companies that have responded are becoming more consumer-facing, but there are many others who have chosen not to respond at all.
narrator: The researchers selected five customer-facing companies: Airbnb, Apple, Amazon, Netflix, and Pepsi. They used a control to compare the emotionality of tweets about themselves one week before and one week after they released a statement in support of racial equality. The data showed some interesting results.
Pradeep K. Chintagunta: Most of these companies had positive results. In other words, the sentiment of the tweets tended to be more positive than before the announcement. But it didn’t happen instantly. Therefore, it largely depended on the nature of the announcement made.
Often, companies may simply make an announcement without any commitment behind it.—Commitment basically means financial commitment—It turns out that the sentiment in tweets is actually more negative than positive. And it’s only when these companies decide to put real resources into these causes that we see a change in sentiment and actually see an increase in the positive sentiment in their tweets.
narrator: Netflix is a great example of a company that faced negative sentiment after its initial statements because it did not make any financial commitments for racial justice. A second announcement with financial promises was also poorly received. The public did not seem to think that the commitment was large enough to be persuasive. So they made their third announcement, committing $100 million to support America’s black communities. From that point on, the sentiment of tweets about Netflix became more positive.
After the Netflix episode, many companies debated how they could or should respond internally.
Pradeep K. Chintagunta: Much depends on the company itself, such as its position and values. And if these are issues that resonate so closely with the company’s values, it makes sense for them to voice their opinions.
Another thing to keep in mind is that many customers of these companies now want to associate a more consistent product or product image with the way they do business, so they tend to demand this from the companies they tend to do business with. That means there is. they feel. We find that millennial customers in particular are very interested in understanding the story behind a brand. What does a brand actually represent? What is the positioning behind the brand?
Therefore, companies’ responses vary widely. For example, Ben & Jerry’s is a great example of a company that is very closely tied to a social purpose. Therefore, they have played a very active role in various activities such as LGBTQ issues. These issues are deeply ingrained in their DNA. And I think part of that is the expectation from your own customers and other stakeholders to actually say something when issues like this arise.