Digital Media Metrics for Valuing Knowledge Assets

Abstract

A growing literature is exploring the potential of using new sources of data to estimate knowledge asset levels and intellectual capital.  In particular, digital media and related metrics (such as sentiment analysis), thought to be related to brand equity, show potential for assessing the intangible assets of the organization, particularly relational capital.  Previous presentations at the European Conference on Knowledge Management have explored this topic in different industries and with different metrics.  On the digital media side, metrics such as volume, engagement, impact, and sentiment are readily available as well as more in-depth details such as preferred platforms.  Studies have suggested that high levels of digital media activity are strongly associated with brand equity, a marketing concept that can reasonably proxy relational capital. More recent work has expanded this relationship, specifically looking at whether the digital metrics can capture all of intellectual capital or knowledge asset value—to the extent that digital chatter reflects brand quality as well as the customer’s brand perception, one can make the case that human/structural capital delivering superior customer experiences is also a part of digital-oriented values.  So last year’s ECKM paper included not just brand equity as the outcome predicted by sentiment analysis but also price/book value, a recognized proxy for overall intellectual capital drawn from financial statements. This study draws on that foundation to further explore the digital media metrics and price/book relationship.  Price/book can be calculated for any listed public company, greatly expanding the range of firms that can be studied.  Price/book can also be adjusted as stock price changes, so rather than a single annual value like brand equity, price/book can be recalculated on a monthly or weekly basis and directly compared to weekly sentiment analysis results. The paper will report on an initial investigation of correlation results from digital media metrics related to brands and price/book ratios recalculated on a weekly basis from a range of B2B technology companies. These can be compared to findings from using the previous brand equity methodology.  Deeper analysis is possible from the results, including firm-by-firm calculations or variable manipulation (e.g. lagging) and can be extended from this preliminary work.