The study, which was conducted by the UK’s University of East Anglia (UEA), discovered that the positive tone of tweets can indicate which team is more likely to cover live soccer wagers.
According to UEA’s website, researchers poured over 13.8 million tweets during the English Premier League season. They then compared these tweets to live wagering prices at a leading online sportsbook.
The university discovered that if the combined tone on Twitter was positive for a specific team, then they’re more likely to produce a successful live bet.
Tweets are especially helpful after a red card has been issued or a goal has been scored. The tone from this content can help assess the implications moving forward in a match.
UEA Wanted to Measure Forecasting Ability of Social Media
Various firms are already using social media as a way to forecast future results. And the university wanted to determine the accuracy of social media as a forecasting tool. They accomplished this by measuring the aggregate tone for all tweets surrounding each EPL team.
The research has been published in the journal Economic Inquiry, and it was carried out by Dr Alasdair Brown, UEA’s School of Economics, and colleagues from the Universities of Dundee and Reading, and Birkbeck, University of London.
Dr. Brown, who’s a senior economics lecturer, told UEA the following:
“The modern forecaster has a number of tools at their disposal. In particular, prediction markets and social media have proved extremely popular.
“We know that prediction markets, such as Betfair, generally lead to accurate forecasts, and outperform individual experts and polls in many settings. However, we wanted to find out if social media has anything to add. Can we combine probability forecasts from prediction markets with social media output to improve our predictions?
“We find that Twitter activity predicts match outcomes, after controlling for betting market prices. Much of the predictive power of social media presents itself just after significant market events, such as goals and red cards, where the tone of Tweets can help in the interpretation of information.
“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.”
More on the Live Betting Findings
The UEA team used a number of betting strategies to determine the degree to which social media can predict live wagering outcomes. Using a strategy that factors in sportsbook commissions and uses the positive tone on specific teams, UEA earned an average profit of 2.28% on 903,821 bets.
This is a very impressive when considering that the average online better loses 5.41% on EPL live wagering (according to UEA research).
Dr. Brown said these are significant returns when considering the size of the EPL market and the volatile nature of live betting.
The only goal that the study didn’t accomplish is determining if tweets are helpful before a goal is scored. UEA was unable to find a correlation between a positive Twitter tone and making successful bets prior to a goal being scored.
Twitter Is a Very Helpful Live Wagering Predictor
“These results fit in with recent evidence that social media content can be useful as a forecasting tool,” Brown said. “For example, there is evidence that social media output, both on Twitter and on financial message boards, predicts future stock returns.
“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.”
Dr James Reade, an economics expert who co-authored the study, also spoke about the findings.
“This is a real ‘wisdom of crowds’ kind of outcome,” said Reade. “It says that if we listen to the right parts of the crowd, 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.”