THE POWER OF SOCIAL MEDIA ON COMMODITY


DRIVEN BUSINESS Facebook’s Mark Zuckerberg has been quoted as saying “by giving people the power to share, we’re making the world more transparent”. Ideas are now no longer controlled by a person or a company, but by what others say or share about them.


Since the internet’s birth Marketers have been using it to target consumers, and the dawn of social media has enabled consumers to use social networks to find the best products, but this is not the only level these platforms are influencing. Whether we like Twitter or not, social media has penetrated the world of commerce. 84% of people share information on social media because they support a cause or issue; and 94% do so to pass on what they deem to be important information, with 49% of these shares then influencing action on products they are sharing. Decisions are being made more rapidly than they ever have been. With more than 350,000 tweets being posted every minute, information is available in an instant, and not only to those in the trading industry.


In the week that I wrote this article, an Iceland (supermarket) advert about a little Orangutan telling her story of loss due to Palm Oil, sheltering in a child’s bedroom from loggers destroying her habitat in Borneo, has grabbed the headlines. The advert was banned from airing on television for being too political, primarily due to its affiliation with previously being a Greenpeace campaign. Yet through the social media platforms the advert was made public, creating a huge following with thousands signing a petition for it to be aired, and thus making it on to our television screens on UK morning chat shows.


The UK consumption of this commodity is estimated to be at 1.6 million tons of Palm Oil/ Palm Oil derivatives, with 68% of that being used in, or for food. The supermarket’s choice to ban Palm Oil in all their own brand products, instead of following the rest of the industry in using RSPO certified sustainable Palm, has had a strong reaction. The sentiment being seen from the general public is for this to be the way forward.


The knock on effect of this has been Fortune 500 companies such as Mondelez being brought into question by its customers for their use of Palm Oil in their products, despite the fact that they have been a huge supporter of the use of sustainable Palm Oil in the industry for many years. Its products have been 100% RSPO certified material since 2013. It must be made clear that this article is not attempting to examine the debate on whether we should use Palm Oil or not, but rather that this is a good example of the significant role emotion can play in investors’ decision making, as well as the extent of the potential change social media can make to an industry, be that right or wrong. In this instance, the long term impact on this commodity will be a slow burn. Still, the effect of emotions about the companies which get featured in this debate, whether positive or negative, will inevitably have an effect on the price of the shares of those companies.


12 | ADMISI - The Ghost In The Machine | November/December 2018


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