2017 French Presidential Election         SMI points towards Macron

Judging from the Social Media Influence (SMI) index, Emmanuel Macron and Francois Fillon will place first and second, respectively, in the first round of voting which will take place on April 23, 2017 qualifying them to pass on to the second round or head-to-head run-off on May 7, 2017.  Macron will then become the French President after the second round of voting.

Before getting too far into forecasts, we should start with some background on the current electoral environment and the importance of making early forecasts using the SMI.

It is early to make predictions.  In France, the election season is much shorter than in the US but France is still not fully in general election mode as major candidates are still declaring themselves and major primaries are still coming.  For instance, in the past few weeks, many of the main candidates have publicly confirmed their intentions to run or not, with the current sitting president, Hollande, having stated that he would not run for reelection.  In addition, of the two main national parties, the Republicans just recently ended its primary with the Socialists having their primary in January.  In short, there is a considerable amount of movement and positioning and social media has been very frothy as a result.  Predictions based off of these datapoints will be more volatile than in just a few months, or as we get closer to voting.

Even with these caveats, it is important to make early forecasts using social media in order to further prove that it is a leading indicator for polls and betting markets.  In the case of the 2016 US Presidential Election, this same form of analysis identified Trump extremely early as the dominant force on the Republican side and identified Sanders as much stronger than generally accepted, strong enough to give Clinton a very aggressive race, on the Democrat side.  At the time, these were well out-of-consensus calls.  Sanders and Trump posted strong early SMI ratings which proved to be an extremely accurate indication of underlying voter support.  Eventually, the SMI was used to forecast Trump winning with 306 electoral votes, the only known forecast to correctly call the US election by electoral votes.  By applying the process to the French election we intend to replicate the success gained in the US election showing that social media is not only an important addition to election analysis but in many cases a leading indicator to other more traditional metrics.

We should start by looking at the state of the current expectations of the French election using traditional metrics to understand how the SMI forecasts compare to the consensus view.  As it stands currently, Fillon is by far the favorite in terms of pundit analysis, betting markets, and polls, with second place going to Le Pen.  Macron is in a distant third place, while the remaining candidates are mostly disregarded.  The ‘consensus view’ is that the first round is for the most part decided and that the run-off second round will have Fillon prevail without much effort.

The basic pundit analysis is that there are two viable national parties in France – Socialist and Republican.  The Socialist Party currently holds the presidency but Hollande is extremely unpopular and is seen by many as the ‘most unpopular French president ever’ (https://www.theguardian.com/world/2013/oct/29/francois-hollande-most-unpopular-president) and has decided not to run for reelection.  Other Socialist candidates do not appear to be strong enough to prevail in a general election so pundits have disregarded the party’s prospects.  In this vacuum, the Republican candidate, Fillon, should win according to this binary approach.  Le Pen of the Nationalist Front Party has performed well in previous elections and, given the perceived global trend to limit immigration which is a hallmark of hers, the consensus view is that Le Pen should perform even better than in previous elections, getting her into the second round run-off.

Let’s look at polls and then betting markets to quantify the current consensus view.  Afterwards, we can compare these traditional metrics to the SMI.  The following table highlights the most recent five polls and an average of them.

Table 1:  Polls for 2017 French Presidential Election

 Source: ELABE, Harris Interactive , Kantar Sofres, BVA, Ifop

According to the most recent five polls (all from the last two weeks), it looks like the top two candidates should handily defeat the remainder of the pack and then move on to the second round.  Note in the table the relatively tight range of the figures – for instance Le Pen posted 24% in ever poll and Macron 13%-14%.  Just looking at polls gives the impression that the electorate is fairly well decided even in this early stage of the election.

Also note that the third place candidate is approximately 10 percentage points under Le Pen who is in second place.  Given such a large gap, the betting markets appear to be placing rather large bets on the top two contenders, as shown in the following table.

Table 2:  Betting Markets, Probability of Winning Election, 2017 French Presidential Election

Source:  PredictWise and PredictIt

Two major prediction sites show that Fillon is by far the favorite to win the election and Le Pen, to varying degrees, is favored to make it into the second round.  Further, they show that on average it would not be very wise to consider Macron, Valls, Melenchon, or Bayrou.

Summarizing the state of the French election according to the consensus view, Fillon is expected to be the next president by a fairly safe margin with Le Pen giving him a slight run.

The SMI tells an extremely different story.  Although varying significantly from the mainstream view, recall that a similar phenomenon occurred early in the 2016 US Presidential Election in that the SMI picked up on trends not confirmed by polls and traditional analysis until much later in the election.  So although SMI insights are not in accordance with the consensus opinion, they should not be disregarded.

According to SMI, Macron is leading and has been the most consistently strong candidate.  He is currently the front-runner for the election with second place going to Fillon.  Having said this, SMI points to a close race especially for second place.  In comparison to the consensus view, the SMI highlights a different front-runner and predicts a much closer race in general.  The following chart compares the average of the most recent polls to the SMI ratings.

Chart 1:  2017 French Presidential Election, Comparing Current Polls to Social Media Influence (SMI) Index Ratings

Source:  ZettaCap, ELABE, Harris Interactive , Kantar Sofres, BVA, Ifop

As previously noted, the polls (and betting markets) show a two person race between Fillon and Le Pen with all other candidates not posing any significant threat.  SMI ratings depict a much tighter race, especially as it relates to which candidate will place second in the first round.

With all the normal disclaimers including it being very early in the race to make firm forecasts, the SMI ratings favor Macron.  Not only is his rating better but it has been fairly consistent and marginally increasing which shows that his candidacy is gaining traction from the ground-up.  Le Pen also has posted fairly consistent SMI ratings, though at a lower level.  Most of the other candidates, including Fillon (Republican candidate) and Valls (assumed Socialist candidate), appear to be more influenced by news and events as their SMIs have been more volatile which makes their future SMIs harder to predict and their rating durability more questionable.  It should also be noted that Fillon’s SMI has recently been trending down which is obviously not a very good sign.

SMIs are insightful as standalone indicators but also are useful in creating secondary observations.  In the current case, the observations drawn from the SMIs reinforce our general analysis while refuting the mainstream analysis.

Given the recent and expected news flow, we would expect Fillon, Valls, and Le Pen to be performing much better in SMI terms than they are currently.  The fact that they are not is a major red flag for each candidate.

The French Republican Primary was decided just in the last few weeks and Fillon’s victory was somewhat of a surprise to many.  We would expect that Fillon’s SMI would get a major boost post primary victory, but in reality the surge was rather minor and his SMI even in the wake of an upset victory has been short-lived.  This fact is even more surprising given that many viewed the Republican Primary to be ‘the real election’ as the Socialist Party, the only other major national party, is seen by the consensus as too weakened by Hollande’s unpopularity to be a real threat.

As for the Socialist Party, Valls’ SMI shows a better relative standing than his poll figures, but given the current environment which is presumably favorable to him his SMI is still lacking.  Hollande’s announcement that he would not seek reelection should have shifted considerable focus to Valls, now the Socialist front-runner, which should have helped Valls’ SMI over the short term.  Additionally, the Socialist Primary is set for January 2017 which implies more news coverage and attention for Valls as compared to most of the other candidates.  The fact that his SMI under these circumstances is still trailing is not a good sign for things to come.  In other words, if Valls cannot outperform in the current news flow environment which should be redirecting social media focus on him, it is very questionable if he can gain traction later.

Also, given the state of global political trends, we would expect Le Pen to be getting more traction in terms of SMI but she is not.  Le Pen’s National Front Party has supported limits on immigration since the 1970s.  As immigration has become much more of an important political topic, many believe that the National Front will finally have its chance at winning the general election.  However, Le Pen’s SMI does not reflect this consensus assumption.  In fact, her SMI implies a performance more or less in-line with previous elections, or a strong third place finish in the first round, without receiving any major boost from global trends.

Macron is arguably the only fresh face in the election which appears to be one of the factors that has helped his SMI.  He has worked in the Socialist led government and was previously a member of the Socialist Party, so he is not entirely new to politics.  However, he founded a new political movement called ‘En Marche!’ (or Forward!) in April 2016 and is running as an independent.  At 38, he is also extremely young for the position of president which potentially helps his ‘newness’ image and his anti-establishment credentials.  With an apparent centrist posture and Socialist Party-leaning, he could pick up many of those looking for someone not dominated by one of the major parties (independent) but who is still fairly orthodox (safe).

Globally, anti-establishment causes and candidates have been doing fairly well.  Most have assumed that this will help Le Pen in France, but it seems that this trend is more likely to help Macron as the independent ‘anti-establishment’ candidate.  At least early on, his SMI has been proving especially strong for an independent candidate whereas Le Pen seems to have gained little in terms of SMI due to this global trend.

Melenchon’s SMI is also significantly outperforming in relative terms as compared to his poll figures.  Like Macron, he had been a member of the Socialist Party and later founded his own political party, the Left Party which is to the left of the Socialist Party.  Melenchon is the dark horse candidate of this election in that the betting markets have almost completely disregarded his chances but his SMI, though showing him in fifth place, is actually within striking distance of the second position which would qualify him for the second round.  Though the SMI is not forecasting him to make the second round, Melenchon shows how betting markets / polls can produce such different observations than those made from the SMI.

Judging from historical norms, France’s final two candidates in the second round will likely include one from the left and another from the right.  On the left, Macron (center-left), Valls (left), and Melenchon (far-left) should battle it out – with Macron prevailing.  And, on the right, Fillon (right) and Le Pen (far-right) will compete with Fillon winning.  This is the scenario that is being painted by SMI analysis and one that is generally supported by the global trends – with Fillon being the fresh face on the right and Macron on the left, both of whom are attempting to brand themselves as anti-establishment to varying degrees.

In the second round, the SMI currently points to Macron.  We will follow this closely in the first quarter of 2017 for further developments.

In the next two months, expectations include:

• Macron surging in the polls,
• Fillon’s poll figures stabilizing or declining slightly while seeing his betting market shares fall dramatically,
• Le Pen declining in the polls to sub-20% levels, placing her more in-line with her performance in the last presidential election,
• Valls and Melenchon fighting it out to see who will be the standard-bearer for the more traditional left (with Macron taking the role of independent and center-left), one will surge in the polls and the other decline.

On a side note, as compared to the 2016 US Presidential Election, the 2017 French Presidential Election appears less certain.  In the US, the SMIs of Trump, Clinton and Sanders were very strong from early in the nomination process.  In comparative terms, the other US candidates did not register significant SMIs for any reasonable length of time to be considered serious contenders.  Of the leading candidates, Trump’s SMI was the most consistently high throughout the election.  In France, however, no single candidate’s SMI truly dominates the way Trump did in the US.  Additionally, there are five candidates currently posting strong SMIs as opposed to three in the US at a similar stage.  The implication is that the French election is less decided than that of the US, at a similar stage, with a less clear SMI front-runner and more potential for a shake-up for the number two spot.

In terms of similarities, there are a number.  The US betting markets clearly chose and stuck with Clinton as the winner of the election even though her SMI trailed that of Trump for almost the entire election season.  Similarly in France, the betting markets have chosen Fillon even though he has been trailing Macron in SMI.  In both cases, the betting markets placed over a 50% probability on candidates that were trailing in SMI from very early in the election process.  In the US, the SMI turned out to be more predictive – in France, the jury is still out.  Also, political analysts in the US put far too much emphasis on traditional advantages such as national-level party organization and extensive political experience of the candidates and not enough on what is and who are resonating on social media.  Similarly, French political analysts appear to be making the same oversight.  Especially in a period when such traditional advantages appear to be worth less (though not worthless) and social media usage has increased in importance, it seems like an obvious error not to look at social media for political insights.

Look for an update as we get closer to the first round vote.