No patience for the ROI of Social Media discussion

In a blog post last week, Dell revealed that it has generated more than $2 million in revenue from @DellOutlet, one of its many Twitter sites. Late last year, there were some headlines about Dell crossing the $1 million mark via Twitter and it’s only gotten bigger since then.

How did they do it? With a coupon code!

Wow, now that’s inventive. But this is not a dig at Dell it’s a dig at all of us marketers who say they don’t understand how to calculate an ROI from Social Media. My point is Dell isn’t using any secret sauce – its just plain old common sense. And at this point in social media or even in the development of the web – we have plenty of ways to track and measure lead generation coming from Social Media. So much so that I have lost all patience for this discussion.

In a blog post a few weeks ago called – Why is measuring Lead Gen in Social Media so hard? – I detailed a few ways that companies used to track lead generation such as: a unique 800 number in their white papers or a unique hotlink or email address embedded in their white papers. These would be only accessible via the various social media outposts they use to share their story like on RSS, syndicated Blogs, Facebook, and Twitter. Same goes for Video or Podcasts – have a strong call to action and send them to a unique URL. Don’t have a call to action try sharing it with a service like Bit.ly – a unique service that shortens your URL’s and then provides unique tracking of them.

If that’s not enough try flipping the equation around and using Google Analytics to find out how much traffic was driven to your website from services like Twitter, blogs you syndicate to etc … If your tracking system isn’t robust enough to do that then remember back in the early days of Pay Per Click advertising when we used to create separate pages (I called them Ghost Pages) to track the traffic and conversions of each keyword. So for example if you had purchased a keyword such as: VoIP, I would set up a landing page on the website for that, a unique page for Google clicks, a unique page for Yahoo clicks and a unique page for AOL clicks (remember when we used to buy keywords there – sorry Tim Armstrong).

My point is back in the early days of the web marketers found ways to measure and track lead gen with a lot less sophisticated tools then we have now. True the number of channels have blossomed but that shouldn’t have changed our creativity when it comes to measuring the ROI of Social Media!

11 comments to No patience for the ROI of Social Media discussion

  • dominic

    Thanks for the reality check.

    One point though.

    This Dell campaign is not "social" at all. It's traditional marketing on twitter with the "funnel" logic: 100K will read; 10K will check and 500 will buy. Very much like an emailing except that opt in in emailing makes the consumer more in charge of what he accepts or not.

    There is nothing specific for me nor for my community in the message and no attempt to build trust, or establish a relation. Very little value in the message.

    The paradigm of social media is usually the reverse: 100 will buy and they will be so delighted they will spread the word.

    I personally would not retweet this tweet and if Dell would be using too many of those, I would report them as a spammer, like I do with emails.

    Won't you ?

  • Paul Dunay

    @ dominic – thanks so much for reaching out – you are absolutely right there is nothing social about their message – they are using a social channel to broadcast a message of a discount

    same goes for the Asian BBQ truck which uses twitter to disclose where it will be that evening

    I would argue that the Asian BBQ truck while doing the same as Dell is still communicating to a group of followers that rival a community

    perhaps we are seeing some community building but of a one way nature using these tools

    great comment

  • Edward O'Meara

    Hey Paul,

    If you assume that an average Dell ticket is $750, that means only 2.6k units were sold. With a reported 200 Dell people Tweeting, that's only ~13 units each – and one might expect a good amount of cannibalization from a Dell-favorable audience. While it's nice to see a brand publicly talking about sales, I'm still wondering at what investment and margin? At what point would a senior exec seriously embrace twitter as a channel with a P&L target? My guess is that these sales are gravy and the best way to view these efforts are as customer support costs & benefits.

    And, fwiw, like dominic I am one of those that would shift tweets with too many coupons into my spam list. I've already noticed more than a few brands who don't realize that Twitter is not simply an alternative to e-mail spam offers…

    Hope you're happy with the new gig.

    Edw.

  • Paul Dunay

    Hey Ed – thanks for reaching out and commenting

    I Love your thought about how to calculate the dollars per rep on twitter – overall I think it is safe to say 3 million for a company that size is a drop in the bucket – but hey you have to start somewhere right?

    Also your theme of cannibalization is very interesting – I feel if they were just doing straight promotions on all Dell gear it would cannibalize their revenues but since it is close out material it is pure gravy

    Yes – enjoying my new Avaya gig alot – its great to be in such an innovative communications firm in the middle of a communications revolution!

    best
    P

  • TravisV

    Dell could also pass out flyers in Times Square and kick off $3-mil in new sales. Why? Because they are Dell, and because they sell a great product. I don't think that mega corporations that already have enormous followings are the best examples for the effectiveness of social channels (b/c those companies would get those results regardless).

  • Paul Dunay

    @ Travis – fair point

  • The Retail Advertising and Marketing Association lists COUPONS as the top media influencer for purchases.

    If it was a piece of paper, banner ad, commercial or social media, Dell would have likely received the same response. This is no proof that “Social Media” was the driver for the purchase. If Twitter did not exist and Dell had sent out the same coupon to EXISTING customers that ALREADY like their product, would the same sales response happen? Very likely.

    Just like most people in this country, I am very busy. I see most of the micro-blogging blasts that I get as digital white noise. Even my techno-junkie 18-year-old and his friends say they hate Twitter and find it annoying. (Yet they use it.)

    I maintain that social media is like a social disease. Very few people know about it or pay attention, unless they are your close friends and it impacts their lives in a significant way.

    Social media is digital narcissism, where everyone is waving a flag about themselves, with little care for building authentic relationships with the customer. Until I see genuine NEW relationships being built, I am not sold.

    We sit here arguing about the ROI of Twitter, but give it a few years and yet another mindless digital robotic service will have taken over and we will be having this same argument. Right now everyone is so enamored with technology systems and platforms that they ignore one simple fact – the same old things still work, they are just repackaged.

    Coupons did the job, not Twitter.

    Carl Hartman | brandgineering.biz | Denver

  • @Carl – I agree – and that’s my point to the reader that Dell is not using any special magical sauce – they are using a coupon (might as well have given out S&H green stamps 😉

  • Great post. I find it funny that many of the comments seem to be coming from the converted. I disagree with the comment that says the tweet you’ve posted doesn’t offer anything for a community or establish a relationship only because we don’t know what tweets came before this one. I would suspect that Dell knows how to use their feed to establish it as a valuable resource for information so that when a coupon is offered it is read and not considered white noise. (That’s an assumption on my part that may not be true.) Even with that disagreement, I would also suspect that most of the folks posting here would agree that so much of the discussion taking place in the social media world is centered on squishy metrics and buzz. I find it incredibly frustrating when I start having discussions that involve simple ways to track clicks, “feed the funnel” or calculate some type of value only to be met with objections from social media “experts” who have no clue what I’m talking about. My hope is that Carl is correct and another bright shiny object will attract these experts sooner rather than later so we can all go back to marketing. 🙂

  • @James – LOL – some great points but dont lose your focus on the feed the funnel angle – I think we really can use social to identify conversations where there is a potential sale developing – thanks for commenting!

  • […] No patience for the ROI of Social Media discussion In a blog post last week, Dell revealed that it… […]

Leave a Reply

You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>