Businesses are failing to make the cultural and budgetary commitments required to maximise the potential of social media, according to a new report.

The study by Econsultancy and bigmouthmedia indicates that 73% of companies now spend more on social media and the vast majority predicted budgets will increase again in 2011.

However, 76% of the companies surveyed admitted to not having an ROI figure for most of the money they invest in social media. Furthermore, two thirds of companies acknowledged the need to improve their social media techniques, illustrating that business use of the medium is far from perfect.

Although 83% of companies expect social media spending to increase, the actual amount being spent remains modest. More than 28% do not spend anything on social media marketing and a further 33% claim to invest less than £5,000 a year.

For many, lack of investment is damaging: around half of responding companies (49%) say the limited resources is a huge barrier to success.

Many companies struggle to integrate social media activities with other aspects of the business such as sales, PR and customer services.

Econsultancy research director, Linus Gregoriadis, said: "2010 has been a year in which companies have tried to become more focused in their social media marketing activity.” He added that, while newer areas such as location-based marketing and social gaming are being hyped in the media, the data shows that very few companies have so far become involved.