Companies Are Far From Tapping The Full Potential Of Social Media As Marketing Instrument

More than one fourth of businesses in Germany now offer customers the possibility of rating their products and services on their own company website. Some businesses evaluate online information about themselves in order to obtain a picture of their current company or product image. Companies are very hesitant compared to other online advertising channels, however. Only seven percent have their own blog and only six percent have their own profile in social networks. This are the findings of a current representative survey conducted by the Centre for European Economic Research (ZEW.) A total of 4,400 firms in the manufacturing industry and selected service sectors with more than five staff members were surveyed.

The internet provides companies with a way of registering their clients’ suggestions more quickly and immediately. It thus helps improve products and services. For this reason, 27 percent of the surveyed companies already offer their clients to rate products and services on their company websites. About the same amount of businesses systematically browses the internet for consumer-generated content about their products and services or the company itself in order to obtain a clear picture of their own and their products’ image. Twenty-three percent of the companies use social networks and search engines to place advertisements tailored to a profile or search command to directly address customers’ preferences. Only a few businesses take a step further, choosing an individual web presence such as a blog (seven percent) or even their own profile in social networks (six percent).

It seems that many companies are not sure as to how to use these tools. "The proactive use of social media for marketing purposes can bring a company closer to its clients or contribute to a good image and thus greater success," says Dr. Irene Bertschek, head of the ZEW research group Information and Communication Technologies. However, many companies may be reluctant to the risks associated with a continuous exposure on the social web, because bad ratings and news travel at least as fast as good ones. A presence in social networks or a company blog certainly are platforms for critique and discussion which are accessible for the public and can potentially harm a company’s image.

For further information please contact

Dr. Irene Bertschek, Phone: +49 (0)621/1235-178, E-mail: bertschek@zew.de