TWITTER ACTIVITY CAN help predict the result of football matches when combined with betting market prices, new research shows.
It’s the tone of a Twitter post that can predict when a team is more likely to win and soccer bets are mispriced, the study by the University of East Anglia (UEA), published in the Economic Inquiry, found.
Researchers examined 13.8 million tweets – an average of 5.2 tweets per second – during an English Premier League season. These were then compared with in-play betting prices available at the same time on Betfair, an online better exchange.
While social media is used as a forecasting tool by a variety of firms and agencies, the researchers wanted to find out just how useful and accurate it actually is.
They measured the tone for all tweets for each time, in each second of the 372 matches that took place during the 2013/14 season.
They found that if the combined tone of tweets in any given second during a match was positive then the team was more likely to win than the better market prices implied.
In particular, tweets in the aftermath of goals and red cards proved very informative.
“We know that prediction markets, such as Betfair, generally lead to accurate forecasts, and outperform individual experts and polls in many settings,” Dr Alasdair Brown, of UEA’s School of Economics, said.
“However, we wanted to find out if social media has anything to add,” he said.
In short, social media activity does not just represent sentiment or misinformation. If sensibly aggregated it can, when combined with a prediction market, help to improve forecast accuracy.
Dr James Reade, a sports economist at the University of Reading and co-author of the study said that it shows that if we listen to the right parts of the crowds, we can gain more information and make better predictions.
“It’s great for football fans, who always want to know what others think of their team. Betting prices, allied with the general mood on Twitter, can give a really accurate picture of where a match is going, in real-time,” he said.
The analysis
To come up with their result, the researchers constructed a number of better strategies to quantify the degree of mispricing that social media predicts.
Using conservative estimates of the commission paid to Betfair, and a strategy of betting when tweets on a team are positive, a better could have earned an average return of 2.28% from 903,821 bets.
This compared favourably with average returns of -5.41% across the matches studied.
Dr Brown said these were significant returns given the size of the Betfair better market for soccer matches.
The authors also examined whether tweets were particularly informative before a goal was scored, suggesting that social media users could break news faster than the betting and prediction markets. However, they found no evidence of this.
“These results fit in with recent evidence that social media content can be useful as a forecasting tool,” Dr Brown said.
At first glance, this may be surprising as we might think that an individual in possession of valuable information would bet or trade first, and post later.
“However, if we think that valuable information is dispersed among a number of individuals, then we might understand why social media content leads market prices, as it does in this study and elsewhere,” he said.
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