Social tagging is a new way to share and categorize online content that
enables users to express their thoughts, perceptions, and feelings with
respect to diverse concepts. In social tagging, content is connected
through user-generated keywords—“tags”—and is readily searchable through
these tags. The rich associative information that social tagging
provides marketers new opportunities to infer brand associative
networks. This article investigates how the information contained in
social tags can act as a proxy measure for brand performance and can
predict the financial valuation of a firm. Using data collected from a
social tagging and bookmarking website, Delicious, the authors examine
social tagging data for 44 firms across 14 markets. After controlling
for accounting metrics, media citations, and other user-generated
content, they find that social tag–based brand management metrics
capturing brand familiarity, favorability of associations, and
competitive overlaps of brand associations can explain unanticipated
stock returns. In addition, they find that in managing brand equity, it
is more important for strong brands to enhance category dominance,
whereas it is more critical for weak brands to enhance connectedness.
These findings suggest a new way for practitioners to track, measure,
and manage intangible brand equity; proactively improve brand
performance; and influence a firm’s financial performance. [ABSTRACT
FROM AUTHOR]