Michael Dell gets a lot of the credit for pioneering the direct sale of PCs to the public. The reality is that there is a legion of now long-forgotten mail order entrepreneurs who came along earlier. He just did it better than all the rest.
Earlier this week, InternetNews.com published a piece in which Dell's eponymous company claimed that sales alerts on Twitter had resulted in about US$1 million in sales.
Before anyone sneers that a million bucks to a multibillion dollar company is relative chump change, who can afford to get blase in an economy where every technology company is super-anxious about making its numbers.
Fact is that while Twitter is still figuring out what it wants to be when it's all grown up, this may be a turning point. I'm hedging here because I can't pretend to know whether Twitter will make it as an independent company, or wind up as a cool feature in a bigger software maker's product line. (And anyone who says they do know is just full of it.)
Regardless, the Dell experiment is important because it suggests that Twitter can be a lot more than a boy toy for the cool kids. Indeed, the technology's potential role as a supplementary sales channel has not gone unnoticed by some of Dell's rivals.
"It's not rocket science, but give them credit for jumping on it," said an executive with another PC maker. "Everyone can do the same thing--and they likely will."
Sour grapes aside, that's an accurate reading. What Dell accomplished isn't difficult to replicate. The company exploited Twitter's broadcast appeal to spread the word about periodic online specials. Call it another form of direct marketing, albeit with a Web 2.0 twist. But at its core, Dell simply tapped another channel to communicate with potential sales leads.
"We did it as an experiment," said Dell's Bob Pearson, who heads up communities and conversation for the company. "We wanted to see whether people would sign up." By that measure, it was a success. Pearson said that about 65 Twitter groups had formed in the last half year. "It showed us that there are a certain number people who want alerts about certain types of products."
Thinking about the future of online advertising, this much is clear: Customers want to share ideas and in online world people are likely to respect what their peers tell them. If you buy into the argument that the Web reflects reality, then it's better to be part of the conversation than a bystander.
Companies are salivating over the sales potential of social networks. With Dell racking up US$1 million in sales from Twitter, this is long past the proof of concept stage. Imitation being the highest form of flattery and all that. But Twitter is just a delivery vehicle. The bigger question is whether the suits restrain their basic instincts and not turn into spam-happy pains in the neck.
To be continued.
This article was first published as a blog post on CNET News.com.
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