HBR said that many of the 2,100 firms surveyed seemed to concentrate primarily on using social media as a one-way promotional channel. “They had yet to capitalise on their ability to listen and analyse customer conversations so that the information could be used to impact the bottom line,” HBR said.

According to the report: “While more than half [of companies] are using social media, only about one quarter of users said they could identify where their most valuable customers are ‘talking’ about them. And less than one quarter ( 23%) are using any form of social media analytic tools, with only 5% using some form of customer sentiment analysis.”

Indeed 40% of respondents cited their most pressing challenges as understanding the potential of social media to make a difference to their business, and measuring the effectiveness of social media activities. When asked to rank the top three benefits of using social media, just 20% of respondents pointed to ‘better understanding of consumer perceptions of brands’ while 19% said ‘improved insights about our target market’.

One survey participant, a vice president of strategy for an international construction company, said: “It’s like the old joke of asking five blindfolded people to touch an elephant and describe what it is. Social media is different things to different people and there is no good analytical framework to measure it. Just as TV advertising had to figure out an ROI, there will be the same evolution in social media.”

“Most organisations are in discovery mode when it comes to social media,” said Alex Clemente, managing director of HBR Analytic Services.