Much has been written about the impact of high levels of online content publishing around the world and its impact on marketing. In fact, Mark Schaefer was the first to launch the debate in January 2014. To paraphrase his argument: The amount of content published online is growing at an exponential rate and will exceed the ability of people to consume it. He calls this "Content Shock".
Several others, including myself, weighed on its impact by projecting itself into the future. Over time, the impact has become increasingly clear. Many people have seen the impact of surplus content first hand through diminishing returns with increasing time and resources devoted to content and inbound marketing activities.
Largely, this fuels the incredible growth of native advertising and marketing influence. These are paid and deserved media channels, respectively, that are generally considered outside the periphery of the incoming media. Inbound traffic is considered "pull" marketing as opposed to "outbound" or "push" marketing. The words themselves have opposite meanings.
Hubspot Rising to Incoming Size
HubSpot gets credit for inventing the term and making it virtually a household name for sale over the years. They have defined and created whole processes around them, while exposing the virtues of what incoming marketing can accomplish. I have witnessed the incredible impact this can have on hundreds of businesses and industries over the years.
It was in 2006 when HubSpot turned its ideas around inbound marketing into software for execution. The timing could not have been better (more on that later). Just a year or two earlier, SEOmoz (just Moz today) was doing its own form of inbound marketing (whether they knew it or not) and having remarkable success.
Inbound marketing propelled HubSpot from a small software startup to a public company in 2014. It has millions of subscribers to its blog and it is painstakingly harvested for prospects. Their input model has been replicated (or at least attempted) by hundreds of thousands, if not millions, of businesses around the world. This inbound approach to online marketing continues its growth trajectory today.
Can Hubspot afford to do inbound marketing?
This question was raised by Louis Gudema in his article titled the same as above. Mark Schaefer later added his thoughts in a writing that he did, too. Here are the links to each one:
Mark does a good job in summarizing Louis's article in the six points below. No need to make a separate summary:
- Hubspot's entry system relies on the promise of a cost-effective acquisition by the customer. Creating high potential prospects attracted by the content should theoretically be less expensive than having a team of salespeople pounding the streets.
- However, the company's public data shows that their selling and marketing costs are extremely high and that they are increasing. Some analysts have said that these high costs have been a burden that has prevented Hubspot from making a profit.
- In the last two years, Hubspot has stopped releasing information about customer acquisition. Using publicly available data, Louis made his own calculations to estimate that Hubspot's customer acquisition cost increased by 133%.
- HubSpot wrote in its 2014 annual report: "We believe that the cost of acquiring customers, or CAC, is an indicator of the effectiveness of our sales and marketing programs for the company. acquisition of new customers. "Louis makes the assumption that the company has stopped data because it would be embarrassing to share.
- He adds that Hubspot has built a formidable SEO-equity with its content. The company receives about $ 5 million worth of natural search clicks each month, an evergreen asset that will provide search traffic for a long time.
- However, search traffic does not necessarily convert to leads or sales. A customer reports that an incoming contact on 400 becomes a prospect.
Peter Caputa, former vice president of sales at HubSpot and current founder and CEO of Databox, later countered that the value of the HubSpot customer's life span offset his CAC. This led Louis to add an update to his article:
This confirms my previous argument that if a company's LTV ratio is high enough – typically more than 3 times its CAC for a SaaS company – then it can afford a high CAC. However, few companies will be able to develop their LTVs fast enough to support a CAC also in full swing.
Although this is better news for HubSpot, this confirms the point in the introduction to this article: Many people have seen directly the impact of surplus content through diminishing returns with time and resources marketing activities.
The glory years of the industry's content deficits
As stated above, the timing of the Moz and HubSpot implementation could not have been better. Why? Because it was a time when digital marketing as an industry was in a state of online content deficits. In other words, there were more people on the Internet who were looking for solutions to their problems than there was content to solve them.
This meant that internal organic visibility was much easier to gain in the last decade (even a part of this decade, according to the industry) than today. Most industries had deficits in content, with a few exceptions. Today, the opposite is true.
Here's what it looks like graphically:
The graph above shows an organic internal visibility compared to the average domain authority of an industry and juxtaposed with surplus content. In addition to this, there are the number of industries in the incoming success zone (content deficit zone) compared to the number of industries in the incoming frustration zone (content surplus zone) .
The X axis represents the organic visibility and the Y-axis bands represent the average authority of the industry field and the surplus content, 10 being the largest. This is intended to give a general representation of the best and worst online scenarios for a company wishing to implement inbound marketing or content marketing today.
Brands located on the right side of the dotted line may probably focus exclusively on the media owned (inbound marketing) without investing in public relations or the paid media. The more the company is right, the less time, energy and resources it will take to get visibility using only input or output methods.
Surplus content arrived for most industries
The ideal scenario for a company is to have maximum domain authority with little or no excess content in its industry. The worst case scenario for a company is to have a minimum of domain authority and a surplus of maximum content in its area.
In this scenario, marketers can not rely solely on inbound marketing, but must also use the media earned and paid. Thus, increasing the amount of time, energy, effort and budget required to gain the visibility needed to succeed online.
The picture below shows where most industries fall this decade. It's the complete opposite as the last decade.
In this scenario, it is much more likely that a company's industry is in a state of surplus content. It is there that the amount of Internet content for the industry exceeds the average domain authority for said industry. It also means that there is more content on the Internet than people who are looking for this content to solve their problems.
The triangular representation above of the area in which industries fall is generous. If I were more qualified with PowerPoint, the right side would have a lot less represented industries. Instead, the left side would be bigger.
Turning to Hubspot
The above explains the estimated increase in HubSpot customer acquisition costs. He had to invest more in the media owned, earned and paid. In its early years, there was no surplus content for digital marketing and the average domain authority in the industry was weak.
However, HubSpot quickly surpassed the domain authority of most other industry web sites using inbound marketing the past decade. Moz did the same thing. Both are still reaping huge profits today, but with many more online competitors now. This is also why HubSpot could keep customer acquisition costs lower than today.
Ironically, HubSpot is partially responsible for this. Its inbound methodology has encouraged thousands of companies to increase the content deficits of their own industry until they become surplus. Even without HubSpot, most industries would have evolved to surplus content anyway. Just maybe not so fast.
Industries come and go every day in this world. As a result, there will always be industries in a state of deficiency or excess of content. Take a snail farmer for example. It is likely that someone in this industry could replicate the matching methodology that HubSpot has perfected over the last decade today and see a huge return on inbound effort without having to rely on earned or paid media.
However, for the rest of us, we must have a strategy that taps into the media owned, earned and paid – combining both incoming and outgoing. Since most inbound marketing content is considered a first-rate, useful and "non-commercial" tool, our efforts must rely on the channels and methodologies that help improve the visibility of that content.
Inmediate media (or inbound marketing) is today's baseline for marketers wishing to succeed online. What HubSpot has done in the last decade is just the starting line today. Once the incoming machine (owned media) is operational, it must be completed with media earned and paid for content distribution.
The key today is not to rely solely on search engines and organic social media to increase visibility. The key is to tap into other places online with large, cautious audiences and incorporate them into your audience.
Taking advantage of native advertising (outbound marketing) and all its channels (feature film, programmatic, non-programmatic and social paid) represents half of the solution. The second half of the solution involves leveraging the media channels acquired – influence marketing, bylines, syndication, media communication, and so on. Content generated by incoming marketing will be used in the paid and earned distribution.
Details on the promotion of paid and paid content are presented in my books, "The Manifesto of Content Promotion", and "The Native Advertising Manifesto". Both are downloadable for free.