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Kiwi businesses slow on the social uptake – but do consumers want to engage?

New Zealand businesses are still behind the ball when it comes to social media, but less than half of users actually want to engage with brands.

Businesses in New Zealand are still behind the ball when it comes to social media, but less than half of users actually want to engage with brands.

New Zealand businesses trail behind the rest of the world in the use of social media, according to the latest findings from Grant Thornton's International Business Report (IBR).

The research reveals that 38 percent of businesses in New Zealand use social media in some capacity compared with a global average of 43 percent.

We lag behind Australia, where 44.9 percent of businesses use social media, and the United States with 46 percent.

According to Grant Thornton New Zealand partner Greg Thompson, the findings are a "wake-up call to business leaders reluctant to embrace digital opportunities".

“We are ahead of the United Kingdom at 32.2 percent, but surprisingly, we are well behind Latin America where 52.7 percent of businesses use social media, and the BRIC countries (Brazil, Russia, India, China) at 50 percent,” Thompson said.

“The IBR results are fascinating to note. They show businesses in emerging markets embracing social media much faster than their peers in mature markets. They appear to have much more faith in the impact that an active social media presence can have on their relationships with clients, with customers, and ultimately on their bottom line."

But are brands wasting time and money in the social space? TNS’s Digital Life study, a comprehensive overview of online consumer behaviour that surveyed more than 72,000 consumers in 60 countries, including over 1000 New Zealanders, suggests many consumers  resent brands invading their networks.

For starters, 54 percent of Kiwis said they do not want to engage with brands via social media. But we want to have our cake and eat it too, with 67 percent admitting to joining brand communities for a promotion or special offer.

TNS managing director Jason Shoebridge said the push for all brands to engage with customers on social media has created a huge volume of noise or "digital waste".

“Whether it’s their email inbox or Facebook news feed, consumers are sick of being constantly bombarded with brand messages ... Now more than ever, firms need to deploy precisely tailored strategies to realise the massive opportunity that the online world presents.”

Nearly 40 percent of Kiwis think social networks are a good place to learn about brands (compared to 54 percent globally). And they're more likely to compliment rather than criticise companies online, with 15 percent and 11 percent saying they have posted positive and negative comments online respectively.

Business use of social media appears to mirror economic health, according to Thompson.

"The emerging markets, where pickup is highest, are experiencing strong growth."

He said internet use among the wider population in emerging markets still lags behind Europe and North America, but the sheer size of those populations represents a huge market.

"In China for example, there are 485 million internet users, which is only 36 percent of the current population. In India less than 10 percent of the population access the internet. The challenge to the rest of the world’s business leaders, including New Zealand, is clear: catch up, or lose out," he said.

According to Thompson, social media is of particular importance to New Zealand businesses because of our geographic location.

"Understandably, many businesses are preoccupied with the current economic difficulties, but they shouldn’t lose sight of the longer-term opportunities social media offers. It is inexpensive and far reaching, allowing remotely located businesses to stay in touch with customers and suppliers."

The IBR report found that for New Zealand businesses, the key reasons for using social media are advertising at 30 percent, 20 percent recruitment, 24 percent to communicate with customers, 12 percent for staff communications and 6 percent to communicate with suppliers.

Globally, advertising is the most common reason companies use social media (53 percent), followed by communicating with customers (51 percent)  and recruitment (43 percent).

Advertising is the most common use in the EU (64 percent), whereas recruitment came top in North America (63 percent). Meanwhile, communication with customers emerges as the key practice in Latin America (72 percent) and ASEAN (65 percent).