A new Innovation Image Study substantiates a positive correlation between the media’s usage of emotionally charged words in describing a set of 20 publicly traded technology companies and the financial performance of those companies.
Technology public relations giant Waggener Edstrom Worldwide has released the initial findings from the study, validating the connection between the perception that a company is innovative and an improvement in its stock price, underscoring the business value of successful corporate communications around innovation.
“This is the first study we’re aware of that quantifies the business value of a corporate innovation narrative,” says Marianne Allison, chief innovation officer at Waggener Edstrom Worldwide. “The Innovation Image Study substantiates that not just doing innovation but communicating it, and being recognized for it, really matters. Through sound storytelling that engages and involves constituents, whether partners, elites or customers, companies can not only drive innovation adoption, but also enhance their corporate reputation.”
Basing the study on a proprietary algorithm, Waggener Edstrom Worldwide Research & Discovery conducted an extensive pilot project in text mining that analyzed the media coverage of 20 major technology companies in 15 significant business publications over an 18-month period. The company compared each company’s business performance indicators, including fluctuation of stock price in that same period.
The study shows that an association with emotional innovation keywords such as “pioneering,” “breakthrough” or “creative” correlates with strong stock market performance. The correlation does not hold up among companies that are simply associated with rational facts about innovation, including keywords such as “research and development,” “patents,” “engineering” or “labs.”