• What does Dell’s $3 million in sales from Twitter really mean?
Dell recently announced that over the past two years it has made $3 million in sales on Twitter, one third of that during the last six months when the Twitter population grew by 1,000%.
Predicatably, the news media and social network proponents are ecstatic. Sky news calls it “the latest example of how brands are generating profits from social media,” while Clive Maclean Consulting calls it “Another social wakeup call for ad agencies.”
According to Dell, they created their own tracking software for the project, and issue six to ten Dell specials a day. That is a not-insubstantial allocation of resources being used for a following of 779,010 people — although the initial outlay for creating the software is a one-time cost. Upkeep, however, will be continuous.
And what have they got? $3 million sounds like a lot, but their quarterly intake was $12.3 billion, which makes their two-year Twitter take equivalent to 0.024% of what they’ve made through three months of sales procured through the boring, traditional methods.
To put it another way, in two years they’ve earned 0.006% of their sales for a single year.
While the social media pundits may be fooled, there’s no doubt that Dell is aware of the marginality of this experiment. PC Magazine says that the Twitter sales figure “further bolsters Twitter’s case for charging businesses,” but Dell is quick to disagree. “If it becomes complicated and costly,” the magazine quotes a Dell representative as saying, “our instinct would be to move elsewhere.”
Translation: “For free, we’ll be happy to pick up 0.006% of our yearly sales through a social marketing ploy — but if we’ve got to put out any money, it ain’t worth it.”
Is it a failure? No. Dell is using Twitter the way another company might put up posters on telephone posts: it’s cheap, and any resulting sales are pretty much pure profit. But Dell is definitely not fooling themselves into believing that the experiment is worth any real outlay on their part. If Twitter collapsed tomorrow Dell would barely notice — although a couple of their employees might be yanked away from the Internet and have to go back to real work.
Clive Maclean suggests that Dell’s two-year involvement with Twitter probably “did not happen as a result of an agency recommendation.”
He means this as a knock at agencies, but I hope he’s right and no agency recommended this endeavour — at least not as anything more than an extremely low-priority experiment. The real wakeup call here is for the clients, not the agencies: if your agency is pushing social marketing in a really big way — get another agency.
Don’t believe me? Just take another look at the latest social marketing “success” figures from Dell.
If you've got something to say...
Search this blog
See Chuck Nyren's "King of Madison Avenue," about the new Ogilvy biography.