December 16, 2008

Dell And Twitter Revenue: Keeping Perspective

There's no doubt that Dell's $1,000,000 of Twitter revenue is good ... something that points to Twitter as a possible sales channel (from Venturebeat via SmartBrief).

Now for the bad news. Dell generated $63,000,000,000 last year. This means that Twitter sales represent 0.0016% of annual revenue.

Let's say you are as successful as Dell is, but you manage a $50,000,000 business. 0.0016% of $50,000,000 is $794.

Somebody might blast me for this analysis, suggesting that something like 80% of volume is B2B, therefore excluded from Twitter. Let's go with your assumption. Now the comparison results in $4,000 for your average $50,000,000 business.

I am not criticizing marketing via Twitter, nor am I criticizing Dell, who is clearly innovating. About twenty percent of recent visitors to this blog come from Twitter, so I understand how the micro-channel can be used in a beneficial way.

I am simply asking you to carefully study the magnitude of the numbers the media share with us. Be willing to consider any bias in the information, and how that bias benefits those who write the articles.

4 comments:

  1. Mark Brownlow1:06 AM

    And I guess as a follower of your blog I have to ask whether that revenue was incremental: would it be entirely lost if there was no Twitter or would those poeple have heard of the deals some other way?

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  2. Anonymous7:46 AM

    I understand the need to justify investments, but the impact of social media is less in the direct sales that it generates than in the cloud of comments/buzz your product or brand shows up in. For good or bad, it is in the same relm of advertising and aided/unaided awareness.

    Just a thought
    aseem

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  3. Thanks Mark :)

    Anonymous --- good thoughts. How would you advocate folks use this medium, or would you advocate that they don't "use" it in a traditional sense ... that they should simply listen? Seems like marketers are so confused over all this social stuff.

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  4. Anonymous8:25 PM

    Very thought-provoking post. According to a recent NY Times article Twitter plans to "figure out a way to charge businesses who use Twitter to talk with customers or sell products. Companies like JetBlue Airways, Dell and Whole Foods Market have used Twitter in these ways."

    I know I would think very differently about using twitter if I were forced to add a "Twitter fee" to my dwindling marketing budget for 2009. Don't know how I could justify that in 2009.

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