Companies to spend more on social media

Businesses are to invest more in social media in the coming year in an effort to boost customer engagement, using blogging, community sites and user-generated content, according to research. The third annual Online Customer Engagement Report, produced by online publisher E-consultancy and digital agency cScape, examines the likely impact of a worsening economic environment on customer behaviour and psychology. It says that the predicted rise in investment in social media comes as around 51% companies say that the economic crisis has caused them to place greater focus on customer engagement. However, the research found that only 45% of companies have a defined customer engagement strategy in place. Those that do are looking to invest in areas associated with Web 2.0 and social media in 2009 with 41% saying they are looking at user ratings and feedback; 37% looking at user-generated content and a similar number (36%) examining blogging. Brand presence on social networks is also expected to attract significant sums of investment with 36% of firms prioritising this. The use of Twitter and other micro-blogging tools is also on the increase with 7% of companies saying that they have improved their customer engagement through this channel. There have been a number of high-profile examples of firms using Twitter to deal with customer enquiries, including 02 in the UK and Comcast in the US. Linus Gregoriadis, head of research at E-consultancy, said: "More companies are viewing tactics such as blogging, user reviews and on-site video in the context of a broader customer engagement strategy and pulling only those levers which are most appropriate for their business model and customers." The traditional email newsletter continues to play an important role and the research use of email is the tactic most likely to have driven a tangible improvement in customer engagement. Some 59% of respondents said that their organisations will increase their spending in this area during the coming year.

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