Monday, November 14, 2011

The Downfall of Outbound Marketing

As I am finishing up my master's degree in Integrated Marketing Communications at Northwestern University, I find myself more and more interested in the digital revolution. The way we consumer media has completely evolved and has  consumed the focus of my studies. Consumers are beginning to take control of the marketing messages they receive everyday. With the rise of the Internet and social media, outbound marketing is on the way out while inbound marketing is increasing in popularity. This requires companies to earn the trust of consumers first. Consumers must seek out information on their own. The result is a more highly engaged audience that are more likely to be interested in your brand and ultimately purchase.
“Old” or outbound marketing can be characterized by a company attempting to push products and services on consumers with traditional advertising. “New” or inbound marketing requires the consumer to seek out information in the form of blogs, podcasts, white papers, forums, etc. The Internet and social media have created an opportunity for companies to establish a two-way conversation with customers through these new ways of marketing. This type of communication is much more valuable because the consumer has already reached the interest stage of the customer purchase cycle.
This decline of outbound marketing is a result of shifting consumer behavior towards receiving information that is relevant, whenever and wherever they want. New technologies have made this possible for consumers. For example, as a result of DVR and watching TV online, 86% of people skip TV ads. In addition, 91% of email users have unsubscribed from a company email they previously opted into. A lot of the time people unsubscribe because the content is no longer relevant to them or the email is intrusive. As a result, consumers have taken control of the content they receive. The old ways of doing marketing are no longer appealing to consumers.
Many companies are realizing this trend and increasing spend for inbound marketing tactics. Not only is inbound marketing less expensive, but companies are seeing a higher ROI than traditional tactics. Talk about a win-win situation. In fact, inbound marketing costs 62% less per lead than traditional outbound marketing. Inbound marketing is not only great for generating leads, but it also generates revenue when done correctly. Inbound marketing is highly personalized, relevant and builds customer loyalty. For these reasons and many more, 61% of marketers spent more on inbound marketing in 2011. In addition, the average budget spent on company blogs and social media has nearly doubled in the past 2 years.
While these tactics are changing the way we market to consumers, ROI is not always easy to achieve. These outbound tactics are also called “earned media,” meaning a company has to earn the trust of consumers before they can make a profit. Therefore, companies need to be more transparent than ever. Content for inbound marketing is king and this is where companies must invest their marketing dollars to keep the interest of consumers. 

Jessica Wesley is a graduate student in IMC at Northwestern University. Twitter: @jeswesley

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