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Ad Realities: Outbound vs. Inbound Marketing
Posted on May 19th 2014
The global community perceives the term “outbound marketing”, also known as “interruptive marketing”, as the direct interaction with potential customers without their initial interest in a product or service. This includes TV ads, direct mass e-mailing, cold calls and other conventional strategies.
Unlike the outbound approach, the essence of inbound marketing lies in the “acquisition” of customers through various media channels by offering them high-quality, useful content which matches their interests and preferences and encourages them to find out more about a company’s product or service. Inbound marketing generally includes content marketing activities in social media, posting on blogs, sharing insightful industry research results, etc.
Even though many companies still spend enormous budgets on outbound marketing activities, the approach is gradually losing its popularity among businesses.
Some of the core reasons why outbound marketing is less trendy than a few years ago lie in a range of substantial drawbacks it presupposes. These happen to include the following:
High budget spending
Either a company opts for running TV ads or funds cold-calling activities in-house, the required budget can be huge. Of course, large enterprises can afford spending large amounts of money on their marketing, but the mid-size businesses might find it more difficult.
Hurdles in calculating ROI
Even though the so-called “straightforward” advertising tactics can be somewhat effective, it generally takes a lot of time and effort to calculate the actual ROI. The definition of KPIs and the process of granular data measurement and analysis are generally hard to handle.
Most e-mail services are continuously updating their spam filters, which makes mass e-mail campaigns less efficient. Additionally, it becomes almost impossible to calculate precise audience reach and conversion rates in large campaigns of this kind.
TiVo & other TV services
Like it or not, but demand generation via TV ads is falling these days. This mostly happens because people prefer recording TV shows or movies using TiVo or other similar services. Additionally, it has already become a common practice for viewers to opt for online TV subscriptions, which also takes a toll on the efficiency of TV ad campaigns.
Largely because of these obvious drawbacks in an outbound marketing approach, inbound marketing has become more popular over the past years, and here are some of the reasons why:
It facilitates a more precise ROI calculation.
Since inbound marketing presupposes precise KPIs, it happens to be rather easy to measure them and further estimate received ROI For example, it is easy to count the number of registrations through a specific link posted on a company’s Facebook page using Google Analytics.
It does not require excessive spending.
Inbound marketing activities usually do not require excessively large budgets either on staff salary, or on expensive direct ad campaigns. Even if a company runs ads via various online media channels, it generally does not take much money to develop a concept and determine ways to reflect it in ad creatives.
It enables businesses to drive engagement and generate demand naturally, without irritating potential or existing clients.
It is clear that today, customers are exceptionally demanding and fastidious in their preferences, so they will hardly tolerate intrusive advertisements. At the same time, what they value is high-quality content, which appeals to their interests, e.g. insightful whitepapers, surveys, research results, etc.
If a company analyses potential target customers and determines what they might find interesting to browse, it becomes easy to offer them relevant content via numerous available channels and to generate more interest in the promoted product.
As for direct ad campaigns, an inbound marketing approach presupposes running more tailored ads, depending on who the target audience is and where they view each particular ad. Most industry analysts agree that if a business opts for applying an ad server, it becomes even easier to target only the top-value customers and thus maximize ad efficiency. According to Anton Ruin, CEO of Epom ad serving company, for example, the range of available targeting options is really stunning, which enables to segment ad display precisely the way a company needs to.
All in all, it is hard to argue with the fact that every business is unique, no matter which market niche it occupies. Therefore, the best way to decide which marketing approach to select is to conduct deep analysis of the competition and the target audience beforehand. No matter which approach a company eventually chooses, a clear understanding of what consumers are searching for and what they expect to get from a certain product can decrease the risk of spending marketing budgets in vain.
Photo Credit: Marketing Techniques/shutterstock