An Accepted Inefficiency
For generations, businesses have built their marketing strategies largely around what is now referred to as outbound marketing. This term describes the traditional method of reaching out to customers with an intrusive form of advertising such as television commercials, direct mail, newspaper ads, and yellow pages. This is a flawed and dated system of marketing. These marketing techniques:
- Are hard to evaluate from a return on investment perspective (limited analytics),
- Are often expensive (i.e. $2+ million for a Super Bowl ad),
- Are vehicles increasingly filtered by the target prospect (unread periodicals, fast forwards through commercials, ignored general clutter).
Advertising men – the Mad Men of recent TV fame – made billions beginning in the mid-20th century by creating a pseudo-science of measuring the effectiveness of their efforts. However, in spite of extensive investments in research and other methods, their results are still largely guesswork.
Yet, for lack of any better methods, many billions were and continue to be spent on those marketing vehicles. As John Wanamaker, one of the earliest merchant marketers, said, “I know at least half of my advertising dollars are wasted. I just don’t know which half.”
The New Marketing Paradigm
These limitations explain in part why marketing dollars have moved to the new medium of Internet-based inbound marketing techniques. Google became a multi-billion dollar company in record time through this massive influx of advertising money from marketers. According to a report from Accenture, this transformation of market channels has impacted marketing more than any single technology since the introduction of radio and television.
The love affair with online marketing is well-earned. Various sources from the Direct Marketing Association to CRM Daily and the Wall Street Journal all indicate that online marketing expenditures provide a return on investment of 25 to 40 percent higher traditional media advertising. Other studies have found conversion rates of 20 to 30 times that of print direct mail – and at a fraction of the cost per conversion.
Add the impact of Facebook, Twitter, and many emerging social media platforms of advertising to these studies and the result is impressive and growing.
As the concept of letting the prospect and customer initiate the conversation has transformed the approach to marketing, it has become somewhat fashionable to disdain the traditional vehicles for the reasons discussed above.
The Baby and the Bath Water
Now, however, there is a slow awakening to the fact that the earlier concepts and methods of building a sales funnel were not all wrong. Today’s qualified email list is, after all, no different from the catalog mailing lists of the ‘60s. Email lists are more flexible, cheaper, and powerful, but are conceptually the same.
As inbound marketing continues to grow, analytics and attributive models will reach out and initiate cost-effective conversations of which those prospects and customers captured with the effective inbound methods. Savvy marketers will take the advantages and meld them into an even more effective overall marketing strategy.