Quantipulation In Action: Inbound Vs. Outbound Marketing

Mashable (that highly reputable source of marketing theory and research) recently published an article called Inbound Marketing Vs. Outbound Marketing, which claimed:

“Thanks to the Internet, marketing has evolved over the years. Consumers no longer rely on billboards and TV spots — a.k.a. outbound marketing — to learn about new products, because the web has empowered them. It’s given them alternative methods for finding, buying and researching brands and products. The new marketing communication — inbound marketing — has become a two-way dialogue, much of which is facilitated by social media.

Another reason why inbound marketing is winning is because it costs less than traditional marketing. Why try to buy your way in when consumers aren’t even paying attention? Here are some stats from the infographic below.

–44% of direct mail is never opened. 
–84% of 25 to 34 year olds have clicked out of a website because of an “irrelevant or intrusive ad.”
–The cost per lead in outbound marketing is more than for inbound marketing.”

My take: Total garbage. This attempt on the part of people looking to differentiate the “new” marketing from “old” marketing completely misses the boat. 

Let’s look at this point by point:

“Consumers no longer rely on billboards and TV spots — a.k.a. outbound marketing — to learn about new products.” Who said that consumers relied on billboards and TV spots to learn about new products? Marketers relied on billboards and TV spots to make consumers aware of their products, to increase recall of their products, and create positive affinity. As long as people continue to drive along the highway (how’s the commute in your city? Yeah, sucks in mine, too) and watch TV, marketers will find that billboards and TV spots to be at least somewhat effective at those objectives. 

The new marketing communication — inbound marketing — has become a two-way dialogue, much of which is facilitated by social media. Got news for all the inbound marketing alarmists out there: Marketing has always been a two-way dialogue. It just wasn’t as easy to execute as it is today. Marketers have relied on various mechanisms — postcards, focus groups, toll-free phone numbers — to encourage feedback from consumers. Claiming that the “old” marketing was “one-way” is false.

44% of direct mail is never opened. First off, how do they know that? Think about how much direct mail you get. I challenge you to come up with even a reasonably accurate estimate of how much of it you open and how much you throw away before opening. Second, even if this were true, then I’d say: WOW! More than half of direct mail is opened. That’s pretty damn good in this marketing environment!

84% of 25 to 34 year olds have clicked out of a website because of an “irrelevant or intrusive ad.” What the hell is wrong with the other 16%?

The cost per lead in outbound is more than for inbound marketing. Stupidest claim I’ve heard all month. Just because there is no measurable media cost associated with this thing you call “inbound” marketing doesn’t mean there aren’t costs associated with the efforts. Somebody has to create and manage the social media site, right? Or, if the inbound marketing channel is the phone, do the costs of staffing the call center not count as part of inbound marketing efforts? And given the incredibly inexact science of attribution in the marketing world, how does anyone really determine that a generated “inbound’ lead wasn’t influenced by outbound marketing efforts?

———-

The infographic included in the Mashable goes on to claim that in the “old” way of marketing, marketers rarely sought to “entertain or educate.” Seriously? The ad industry has a RICH history of attempts at being funny and entertaining. Print ads have LONG been focused on education. 

The article also tries to differentiate “new” marketing from “old” marketing by claiming that in the new marketing, “customers come to you”, while in the old marketing, marketers sought out customers. 

Customers come to you? Really? And how do they find out about you? Simply by word-of-mouth? Good luck with that. Listen to what Groupon had t say:

“After a two-year holdout, we finally decided to run real television ads. In the past, we’ve depended mostly on word-of-mouth and limited our advertising to online search. This year, we realized that in spite of how much we’d grown, a ton of people still hadn’t heard of Groupon, so we decided to give in to our Napoleon complex and invade the rest of the world with a proper Super Bowl commercial.”

Bottom line: Trying to make inbound marketing sound like something superior and new is total BS. Marketing is a complex process. There are parts of the process that are inherently outbound and parts that are inherently inbound. There are new channels of communication that create new opportunities for both outbound and inbound communication.  Oh, and real marketers don’t take marketing advice from Mashable. 

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21 thoughts on “Quantipulation In Action: Inbound Vs. Outbound Marketing

  1. It is getting more and more difficult to cut through the constant buzz around ‘new’ media as opposed to ‘old’ media. The best practitioners in the marketing world are finding ways to integrate and leverage all channels based on the product marketed and consumer target audiences. Great marketers are not basing the media mix on ‘what’s cool’ or ‘gut’ but are measuring the impact of channels and asking for client preferences. They are not foregoing one channel for another, but are finding the best mix of channels to achieve the desired result. Based on several new research studies done by unbiased sources, email continues to be the best channel on a ROI perspective with direct mail being second. This will not be the case for all programs, but shows that these channels are far from dead. What is most frightening on this Halloween is that many marketers are using Mashable as a source to support their social media marketing budget allocation without adequate planning on how social media can bring value to the marketing mix.

    Marketers would be much better served if they took marketing advice from Snarketing 2.0 as opposed to Mashable.

  2. I was recently in a bank strategy session where they hired a brand research firm to see where this bank ranked. Near the top of the brand recognition ranking (second, as I recall) was Ally Bank. That’s right, the old GMAC bank that used to utilize wholesale funding to fund auto loans. They drop millions of dollars for traditional TV spots and *poof*, they have one of the most recognizeable brands.

    I think the love affair we are having with social media may be hurting our execution of marketing efforts to integrate all marketing into one cohesive strategy.

    ~ Jeff

  3. I am so blown away by the stupidity recommended in this Mashable article that I am sitting here wondering if commenting on it gives it attention it does not deserve.

    But I was encouraged by the comments coming from the Mashable website. A good number of the readers there recognized that the conclusions drawn by the writer were simply wrong.

    These inexperienced writers and marketers are suffering from lack of knowledge, critical thinking skills and poor training. We can only hope that somehow they will discover what marketing is all about.

    The sad thing is that companies invest in inexperienced talent and they cannot see beyond last month’s bottom line to train them to discern truth from platitude. No wonder corporate leaders do not respect their marketers more than they do.

  4. There is plenty of Quantipulation occurring on both sides of the argument. There are a few factors that are undeniable:
    1) for many SMBs (which includes the vast majority of Community Banks and Credit Unions), traditional outbound marketing is prohibitively expensive based on pure cost (TCO). The affordability metric becomes worse when considering ROI from traditional channels such as TV ads, direct mail, billboards, etc..
    2) the conversation in traditional outbound marketing is limited to a select few consumers (you mention focus groups, post cards, marketer calls at dinner time, etc.) Inbound marketing enables smart marketers to engage in a 1:1 conversation as well as many:1 (many consumers to one company). Perhaps more importantly, inbound marketing enables (near) real-time conversation without adherence to publishing schedules, mail time, etc.. Inbound marketing enables professionals to adjust in real-time based on feedback, to refine their message and mediums so as to enhance the impact. Truthfully, this has never been an option before, postcards and focus groups notwithstanding.
    3) ROI for inbound marketing has been shown to be far superior to traditional marketing. There are clearly some organizations that are doing a great job and earning high ROI (eg. new customers, deeper wallet share, more revenue and higher profits), and as always, there are many who choose not to make the right investments (research, skills, tools) thereby generating disappointing results.

    For most SMBs with a $50,000, $250,000, $500,000 or even $1MM marketing budget, the impact from a solid strategy, well-planned and well-executed inbound marketing campaign will trump the results from outbound marketing by many multiples.

    PS: Groupon became a $1b revenue company primarily through inbound consumer marketing – oddly you neglect you mention this… a spell of Quantipulation?

    • Serge:

      1. I would disagree that “traditional OB mktg” is “prohibitively” expensive. Community banks and CUs use TV and print regionally. Second of all, although not “traditional”, online banner advertising is “outbound” (as is email marketing) and is not “prohibitively” expensive.

      2. Inbound marketing may “enable” marketers to engage 1:1, but how many customers are actually doing so? Answer: Very few. Arguably no more than the number of consumers outbound marketers reach thru other methods.

      3. I’m surprised that you, of all people, would reference published ROI stats on inbound or outbound marketing. We’ve both been there — we both know that the data that goes in to many ROI calculations are suspect at best, wrong at worst.

      4. Groupon’s revenue claims are quantipulation, judging from their accounting practices.

      5. I didn’t just coin the term quantipulation, I’m a practitioner. :)

      • Ron – consistent use of TV and print is prohibitively expensive for Community Banks and Credit Unions. Even local TV is challenging to maintain. Let’s face it, a typical Community Bank will not rank well with the exposure for well known consumer brands such as Toyota, Ford, Coca-Cola, etc.. Smaller Financial Institutions may run a TV ad campaign for a short period of time (often in a less desirable time slot) but they cannot maintain the presence. Thus, TV is really prohibitively expensive. I believe that the same applies to online marketing (eg banner ads). The CPCs for most desired key words are expensive (often well in excess of $10) and conversion rates are very low – resulting in extremely poor (if not negative) ROIs. Email marketing is perhaps the exception, yet, most consumers are now trained to delete marketing emails from their FIs without reading them. And even if they do read these email, most of them lack the ‘Call to Action’ / the ‘Offer you cannot refuse’ needed to generate conversations.

        You are of course right that far too few bank marketers are succeeding in the 1:1 or the many:1. However, I would argue that this is more a function of the program design and execution rather than anything else. Why would a consumer engage with a Bank whose Facebook page is 90% devoted to their store hours and their community activities?

        You have me on the ROI point … very clearly there are challenges with ROI measurement. However, when comparing inbound and outbound ROI from the same source we have added assurance that errors in ROI calculations will offset each other. We need a way to compare performance across many campaigns… unfortunately, we have few options other than to use the provided findings while acknowledging potential data issues. In these types of comparisons, it isn’t about the absolute levels of performance, but rather relative performance. On that basis, every report I have seen confirms that inbound outperforms outbound for customer acquisition (branding may be a different topic, but I believe that very few Community Banks and Credit Unions spend … or should spend … on branding exercises).

        I am sure that we have all, at one time or another, been guilty of quantipulation. It is too easy and too tempting to avoid at times.

        • Ron, another level of analysis shows that pure ROI analysis omits a key business objective. The volume generated by pure inbound often fails to bring sufficient revenue volume to sustain the business. Eliminating outbound acquisition efforts from the marketing mix would cripple most businesses that rely on acquisition for long term survival.

          • Ted: Spot on. The Inbound folks aren’t necessarily advocating for the elimination of outbound marketing efforts, however. But their arguments for the “superiority” of the approach don’t hold water.

          • The pure ROI analysis will illuminate the cases where there is not “sufficient revenue” and more importantly profits or cash flow (which is the “R” in “ROI”). ROI analysis continues to be a fine tool for measuring performance, however you are 100% right in suggesting that marketing campaigns must be aligned with strategic goals.

  5. Ron, thank you for this post. You state the obvious but many still do not get it.

    @Jim, thank you for your comment.

    It’s not new marketing vs. old marketing. It’s do the research and find out what customer segments will accrete your balance sheet and use the appropriate marketing channels to engage, retain, and acquire more. Well, it’s not that simple, I just hope you get my point.

    @dmgerbino

  6. Shevlin strikes again! (I hope you don’t mind that I used social media to hype the post.)

    Here’s my favorite example of the “superiority” of inbound marketing: Hubspot (the self-proclaimed experts on inbound marketing) recently cold-called me. Yes, they picked up the phone. I wish I could have heard the strategy meeting in that office… “Hey, Bob, you know all that inbound marketing that we keep pushing?”… “Yeah?”… “It’s, uh, not working for us.”… “No shit, Jerry. I’ve been sitting here playing Angry Birds for three weeks”… “So take this.”… “What is it?”… “It’s called a ‘phone’…”

    Look around and you’ll also notice more ads on Facebook, LinkedIn, even newspapers from so-called inbound and social media experts. Since SEO and blogging hasn’t been generating enough leads for them, and they’ve discovered that they’re waist-high in competitors, they’re also appearing at trade shows and speaking at conferences. Yes, that in-person selling is really efficient. Last year, one large social media agency in Texas ran half-page ads in the L.A. Times for their free promotional lecture at a Beverly Hills hotel. I guess their tweeting wasn’t enough.

    I love social media and other forms of inbound marketing. I use it, I teach it, I plan it for clients. But to proclaim social media’s superiority over another form of marketing is to fundamentally misunderstand marketing strategy. It’s akin to proclaiming that one color is better than another. “Chartreuse… the future is all about chartreuse!”

    Keep fighting the good fight, Ron!

  7. A commentator on the Mashable posted a link to this response. I found this piece refreshing after reading the Mashable article which unnecessarily raised my blood pressure. I suspect that the “infographic” was nothing more than advertisement from the firm which created it (irony, perhaps?).

    What frustrates me is that readers who influence decision makers at their organization or are small business operators may read articles such as these and take the lessons to heart, likely making catastrophic strategic errors. Deconstructing marketing strategies into two silos where new social media channels are the end-all, be-all and “old marketing” is useless, is simplistic and could lead to destroying a firm’s value.

  8. Thanks for being a voice of reason and offering an even-keeled approach to the subject of marketing. Not “new” marketing, not “old” marketing, but marketing. The bottom line I found – Join the conversation. Remind them of it wherever they go.

    What irked me about this whole post is that Mashable reported it like they were industry experts on marketing. It seemed like such a half-baked infographic that I went to Voltier Digital’s website – they clearly advertise that they create infographics (shoot, they have a page title, and it’s “infographics design). They don’t do the research, they don’t do the leg work, they create a (beautifully misinforming) .gif that makes tough analytics easily digestible for any human being. They’ve made them for everyone from Allstate to eBay.

    Then they go on to say that they also “offer” a slew of trendy ideas like social media marketing, web development and SEO, but show nothing in their portfolio.

    And they have 73 Facebook fans. So to call them an industry leader on the bleeding edge, to me, is insane.

  9. Social Media experts are the new Snake Oil salesmen.

    Now, excuse me while I get back to preparing our Social Media strategy…

  10. Pingback: Quantipulation In Action: Inbound Vs. Outbound Marketing | The … | The Way Of Making Money Online

  11. I agree with Ron, I’ve been watching TV since 1958 and I found some commerical funny and entertaining.
    Even the odd educational one. Billboards are ment to grab your attention as your drive by at 50 MPH .

  12. Pingback: Quantipulation In Action: Inbound Vs. Outbound Marketing | The … « ABC Marketing Direct

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