The 2011 State of Inbound Marketing

www.HubSpot.com The 2011 State of Inbound Marketing February 2011 Tweet This!

THE STATE OF INBOUND MARKETINGContentsIntroduction ............................................................................................................................................ 3The State of Marketing Costs & Budgets ............................................................................................... 4Inbound Channels Convert Leads into Customers ............................................................................... 10What‘s Important to Marketers? ........................................................................................................... 13Conclusion and Additional Resources.................................................................................................. 16Appendix.............................................................................................................................................. 17 HubSpot.com 2

THE STATE OF INBOUND MARKETINGIntroductionSummaryThis report is based on a January 2011 survey of 644 professionals familiar with their business‘marketing strategy.1 The key takeaways are:  Inbound marketing channels are maintaining their low-cost advantage: Inbound marketing-dominated organizations experience a cost per lead 62% lower than outbound marketing-dominated organizations.  The gap between spending on inbound vs. outbound continues to widen: In 2009, inbound marketing had a 9% greater share of the lead generation budget; in 2011 its share was 17% greater.  Blogs and social media channels are generating real customers: 57% of companies using blogs reported that they acquired customers from leads generated directly from their blog.  More and more business are blogging: Businesses are now in the minority if they do not blog. From 2009 to 2011 the percentage of businesses with a blog grew from 48% to 65%.  Businesses are increasingly aware their blog is highly valuable: 85% of businesses rated their company blogs as ―useful,‖ ―important‖ or ―critical;‖ a whopping 27% rated their company blog as ―critical‖ to their business.Overview of Inbound MarketingThis report is designed to help businesses and marketers understand the current usage and results ofinbound marketing. Inbound marketing is a set of marketing strategies and techniques focused onpulling relevant prospects and customers towards a business and its products. Inbound marketing isbecoming widely accepted because it complements the way buyers make purchasing decisionstoday—they are using the Internet to learn about the products and services that best meet their needs.Inbound marketers offer their audiences useful information and tools to attract these people totheir site, while also interacting and developing relationships with individuals on the Web. Inboundmarketing tools include blogging, content publishing, search engine optimization and social media.Inbound marketing contrasts with traditional outbound marketing, in which businesses push theirmessages at consumers. With techniques that include direct mail, telemarketing and trade shows,outbound marketing has become less effective over time as buyers have behaviorally andtechnologically (e.g., TIVO, spam filters, ‗do-not-call‘ lists) tuned these interruptive campaigns out.1 For more information about the survey please see the appendix. HubSpot.com 3

THE STATE OF INBOUND MARKETINGThe State of Marketing Costs & BudgetsInbound Consistently Delivers a Cost per Lead Dramatically Lower Than OutboundSurvey participants were asked to report the distribution of their spending and their average cost perlead. Respondents who spend more than 50% of their lead generation budget on inbound marketingchannels report a significantly lower cost per sales lead than those who spend 50% or more of theirbudgets on outbound marketing channels:  In 2011, the average cost per lead for outbound-dominated businesses was $373, while inbound businesses reported their leads cost on average $143.  Inbound marketing-dominated organizations experience a 62% lower cost per lead than outbound marketing dominated organizations.This finding is remarkably consistent from year to year. The previous study showed strikingly similarresults: the 2010 survey showed that inbound marketing-centric organizations experienced a 60% lowercost per lead. Average Cost Per Lead Inbound vs. Outbound $400 $373 $332 62% Lower Cost per Lead Avg. Cost per Lead $200 $134 $143 Outbound Marketing Dominated Inbound Marketing Dominated $0 2010 2011 HubSpot.com 4

THE STATE OF INBOUND MARKETINGThree Out of Four Inbound Channels Cost Less than Any Outbound ChannelWhen asked to classify each lead generation category as ―below average cost,‖ ―near average cost,‖ or―above average cost,‖ businesses consistently ranked inbound marketing channels as having costslower than outbound channels. PPC was the only inbound channel that was ranked among theoutbound channels.  Blogs, social media and organic search maintained the top slots as least expensive.  Blogs had the highest instance of being reported as ―Below Average Cost:‖ 55% of companies who blog indicated leads from this channel were ―Below Average Cost.‖  Trade shows, PPC, direct mail and telemarketing were most frequently ranked as more expensive. Below Average Cost per Lead, % Respondents by Lead Channel 60% Majority reported blog leads are cheaper. Outbound % of Respondents Inbound 40% 55% 47% 20% 39% 36% 33% 27% 19% 0% Blogs Social Media SEO Telemarketing Direct Mail PPC Trade (Organic (Paid Shows search) search) Above Average Cost per Lead, % Respondents by Lead Channel Trade Shows were most frequently Outbound 40% % of Respondents reported as more expensive than average Inbound Channle 47% 20% 29% 27% 21% 13% 13% 9% 0% Trade Shows PPC Direct Mail Telemarketing SEO Social Media Blogs (Paid (Organic search) search) HubSpot.com 5

THE STATE OF INBOUND MARKETINGThe Majority of Businesses Are Increasing Their Inbound Marketing Budgets―How does your 2011 Inbound Marketing budget compare to your 2010 budget?‖ the survey asked. ―Ifyour 2011 inbound marketing budget changed from your 2010 budget, what drove that decision?‖ Theanswers to these questions show that the majority of businesses are consistently increasing inboundmarketing budgets:  54% of those surveyed are increasing their inbound marketing budgets.  89% are either maintaining or increasing their inbound marketing budgets.  This increase was observed two years in row.  Among the 54% of respondents with increased inbound marketing budgets, the most commonly cited reason was ―past success with inbound marketing.‖  The majority of businesses attributed their decreasing budgets to the ―economic conditions‖ (71%) or ―a change in management‖ (15%). How does your Inbound Marketing budget for the current year 60% compare to your budget for the previous year? Majority reported increases in inbound % of Respondents 40% budgets two years in a row. 2010 2011 51% 54% 20% 37% 35% 12% 11% 0% Higher No Change Lower Why Businesses are Increasing Why Businesses are Decreasing Inbound Budgets Inbound Budgets Past Success with 50% Economy 71% Inbound Change in Other 21% 15% Management Economy 15% Other 11% Change in Past Success with 14% 3% Management Outbound Past Success with Past Success with 0% 0% Outbound Inbound 0% 20% 40% 0% 25% 50% % of Respondents % of Respondents HubSpot.com 6

THE STATE OF INBOUND MARKETINGDistribution of Budgets Continues to Shift To Inbound ChannelsWe asked survey respondents what percentage of their lead generation budgets would be spent oneach of 9 marketing channels: ―direct mail,‖ ―telemarketing,‖ ―trade shows,‖ ―email marketing,‖ ―PPC(paid search / AdWords),‖ ―SEO (organic / natural search),‖ ―social media,‖ ―blogs,‖ and ―other.‖ Thosenine channels were grouped as follows (email marketing can be used both as an inbound and anoutbound marketing tool so it was not classified): OUTBOUND NOT INBOUND CHANNELS CHANNELS CLASSIFIED PPC Direct Mail Email Marketing SEO Telemarketing Other Social Media Trade Shows BlogsThe results show that:  The average portion of budget dedicated to inbound increased from 38% to 41% from 2009 to 2011.  The net effect is that the gap continues to widen - inbound marketing had a 9% greater share of the lead generation budget in 2009 in comparison to a 17% greater share in 2011. Lead Generation Budget Average Distribution, 2009 v. 2011 40% 9% gap Outbound 17% gap Inbound Avg % of Budget 20% 41% 38% 29% 24% 0% 2009 2011 HubSpot.com 7

THE STATE OF INBOUND MARKETINGA more granular view of the data shows that:  Marketers are allocating more of their lead generation budgets to social media and company blogs.  The average budget spent on company blogs and social media increased from 9% in 2009 to 17% in 2011.  Marketers are decreasing the portion spent on PPC, direct mail and telemarketing. Inbound Lead Generation Budget Average Distribution, 2009-2011 50% 40% PPC 10% Avg % of Budget 11% SEO (organic 30% 16% search) 13% Blogs & Social 20% 13% Media 13% 10% 18% 15% 9% 0% 2009 2010 2011 Outbound Lead Generation Budget Average Distribution, 2009-2011 40% Avg % of Budget Telemarketing 10% 5% Trade Shows 20% 6% Direct Mail 11% 11% 13% 9% 7% 6% 0% 2009 2010 2011 HubSpot.com 8

THE STATE OF INBOUND MARKETINGSmall Companies Continue to Spend More of Their Budgets on Inbound MarketingIn a continuation of a trend identified in previous reports, small businesses are attempting to level theplaying field by focusing on lower-cost inbound lead generation techniques.  In 2011, small businesses (1 to 5 employees) plan to spend 49% of their lead generation budgets on inbound marketing.  In comparison, medium-to-large businesses (50 or more employees) only plan to spend 36% of their lead generation budgets on inbound marketing.  Small business are only giving 10% of their budget to outbound, while medium-to-large business are allocating 28% of their budget to outbound channels.  Small businesses plan to spend dramatically more of their budgets on social media and blogs.  Medium-to-large businesses plan to spend more of their budgets on outbound methods, including trade shows, direct mail and telemarketing. Avg. Distribution of Lead Generation Budgets Small vs. Medium to Large Businesses 20% 19% 16% 17% 1 to 5 Employees Over 50 Employees 13% 13% Avg % of Budget 12% 10% 10% 10% 8% 6% 7% 4% 3% 3% 3% 3% 0% Social Media SEO Blogs Email Trade Shows PPC Direct Mail Telemarketing (Organic Marketing (Paid Search) Search) HubSpot.com 9

THE STATE OF INBOUND MARKETINGInbound Channels Convert Leads into CustomersSocial Media and Blogs Generate Real CustomersThe use of social media and company blogs as marketing tools not only gets your company betterbrand exposure, but it also generates leads that result in real customer acquisition.  57% of those using company blogs have acquired a customer from a blog-generated lead; this is an increase of 11 percentage points since 2010.  Similarly, 57% of companies using LinkedIn have acquired a customer from that channel.  Facebook and Twitter users reported customer acquisition rates of 48% and 42%, respectively. Customer Acquisition by Channel 60% 57% 57% 46% 48% 44% 41% 41%42% % of Channel 40% Users who Acquired a 2010 Customer Through that 2011 20% Channel 0% Company Blog LinkedIn Facebook TwitterCustomer Acquisition through Blogs is Directly Related to Frequency of PostsIf your blog is underutilized, you are leaving customers on the table. The 2011 survey shows a directcorrelation between blog post frequency and new customers acquired. Blog Post Frequency vs. Customer Acquisition 100% 89% 76% 78% 72% % of BlogUsers who Acquired 49% a customer 50% through 33% their blog 0% Less Than Monthly Weekly 2-3 Times Daily Multiple Monthly a Week Times a Day Frequency of Blog Posts HubSpot.com 10

THE STATE OF INBOUND MARKETINGMost Company Blogs Publish at Least WeeklyDespite the evidence showing that increased blogging correlates with increased customer acquisition,blogging frequency remained relatively steady between 2009 and 2011.  In 2011, 71% of respondents indicated they blog at least weekly. Frequency of Blog Posts 2009 v. 2011 80% 2009 62% 61% 60% 2011 % of Repsondents 40% 29% 23% 20% 15% 10% 0% Daily Weekly Monthly or lessFacebook Is More Effective for B2C; LinkedIn Is More Effective for B2BThe effectiveness of a particular social media channel depends upon the type of business. While bothB2B and B2C companies are able to acquire customers through any of the four channels surveyed,Facebook is clearly more effective for B2C businesses and LinkedIn is clearly more effective for B2Bbusinesses. Both business types found similar and relatively high success with customer acquisitionthrough a company blog. Customer Acquisition by Channel B2B v. B2C 80% B2B 67% B2C 61% 63% 60% 55% 53% % of Channel Users who 41% Acquired a 39% 39% 40% Customer Through that Channel 20% 0% LinkedIn Company Blog Facebook Twitter HubSpot.com 11

THE STATE OF INBOUND MARKETINGChannel Effectiveness by IndustryA deeper dive into the customer acquisition results shows how the effectiveness of blogs, Twitter,Facebook and LinkedIn varies by industry. The major takeaways from this data include:  Higher Education, Professional Services & Consulting, and Software & Biotech found blogging was highly effective. All of those industries had over 50% of respondents indicating customer acquisition through their blog.  The Retail industry experienced the most success through Facebook and Twitter.  Communications & Media, Banking/Insurance/Financial Services, Manufacturing, Professional Services & Consulting, and Technology Hardware found LinkedIn was highly effective. Customer Acquisition by Channel by Industry 61% Banking/Insurance/Financial Services 66% Communications/Media LinkedIn Twitter Higher Education 72% Facebook Blog 60% Manufacturing 59% Professional Services/Consulting 58% Retail/Wholesale 80% 50% Technology (Hardware) Technology (Software/Biotech) 58% 0% 20% 40% 60% 80% 100% % of Channel Users who Acquired a Customer Through that Channel HubSpot.com 12

THE STATE OF INBOUND MARKETINGWhat’s Important to Marketers?Inbound Marketing Channels Continue to Grow in ImportanceBased on the data regarding customer acquisition and lower average costs for inbound marketing, it isnot surprising that inbound marketing channels continue to grow in importance. Looking at the last sixmonths:  62% of businesses rated social media as being more important.  Social media and SEO were the channels most frequently reported as MORE important.  Direct mail was the channel most frequently cited as LESS important.  Businesses rated every outbound channel as LESS important than any inbound channel. Which sources of leads have become MORE important to you over the last six months? 70% 62% 60% 51% Outbound % of Respondents 50% 38% Inbound 40% 30% 22% 20% 16% 11% 10% 10% 0% Social Media SEO Blogs PPC Trade Shows Telemarketing Direct Mail (Organic (Paid search) search) Which sources of leads have become LESS important to you over the last six months? 60% 50% 50% Outbound % of Respondents 38% 40% Inbound 33% 30% 25% 20% 12% 10% 10% 0% Direct Mail Trade Telemarketing PPC Blogs SEO Shows (Paid (Organic search) search) HubSpot.com 13

THE STATE OF INBOUND MARKETINGBlogs Remain Most Important Social Media ChannelSurvey respondents were asked to indicate if theirbusiness publishes a blog. From 2009 to 2011, the Do you publish a company blog?volume of respondents indicating that their 100%company publishes a blog has shown rapid 35% % of Repsondents 39%growth: 52%  From 2009 to 2011, the percentage of 50% No respondents with a company blog grew 61% 65% Yes 48% from 48% to 65%.  On the flip side, the likelihood of a not 0% having a blog has been reduced from 52% 2009 2010 2011 to 35%.Respondents were also asked to rank the services that they use as ―critical,‖ ―important,‖ or ―useful.‖The results indicate:  A whopping 27% of users rated their company blog as “critical” to their business.  85% of users rated company blogs as “useful” or better.  LinkedIn, YouTube, Facebook and Twitter were considered ―useful‖ or better by over 60%.  In contrast, MySpace, StumbleUpon, Digg and Flickr all had user bases where over 70% considered the channel only ―somewhat useful‖ or ―not useful.‖ How important are these services to your business? 27% reported their blog was “Critical”. Company Blog 27% 35% 23% LinkedIn 16% 34% 21% YouTube 14% 30% 28% Facebook 18% 26% 23% Critical Twitter 14% 25% 25% Important Flickr Useful Digg Somewhat Useful StumbleUpon Not Useful MySpace 0% 20% 40% 60% 80% 100% % of Users HubSpot.com 14

THE STATE OF INBOUND MARKETINGCompany Blogs, YouTube, Facebook and Twitter Increasingly Valued by BusinessesThe results of both the 2009 and 2011 studies reveal that certain channels are gaining importance overtime. The graph below shows the percentage of users who rated the channel as either ―critical‖ or―important‖ in 2009 and 2011.The results of this comparison show:  Company blogs are increasingly valued. The blog is the channel most frequently reported as critical or important, both in 2009 and 2011.  YouTube, Facebook, and Twitter are also increasingly important. Facebook and Twitter gained an additional 18%, and YouTube gained 20%.  Flickr, Digg, StumbleUpon, and MySpace had reduced importance. % Respondents indicating Channel was Critical or Important 2009 vs. 2011 Gaining Importance 62% 60% 52% 2009 % of Repsondents 44% 44% 2011 38% 40% 26% 24% 25% 21% 21% 20% 14% 13% 11% 9% 6% 4% 0% Company YouTube Facebook Twitter Flickr Digg StumbleUpon MySpace Blog HubSpot.com 15

THE STATE OF INBOUND MARKETINGConclusion and Additional ResourcesTraditional outbound marketing techniques – including direct mail, print advertising and telemarketing –are becoming less effective. Buyers are not only finding ways to tune these messages out, but moreimportantly, they now have the capability to evaluate the products and services they need on their own.As a result, businesses are transforming their marketing efforts to focus more on inbound programs thatallow customers to find them. The State of Inbound Marketing report shows that businesses that moreaggressively practice this are capturing leads more effectively. Given the digital nature of inboundmarketing, the marginal cost per customer acquisition is typically close to zero, meaning that as buyerscontinue to shift how they make purchasing, the cost per lead for a given business will continue todecrease.While it is clear that businesses are gravitating towards inbound marketing, some are moving moreaggressively than others. Those who move first are more likely to reap the tremendous businessbenefits of this new era of marketing. If you are interested in learning more about inbound marketing and how to combine blogging, SEO and social media for results, try HubSpot‘s free 30-day trial! http://www.hubspot.com/free-trial HubSpot.com 16

THE STATE OF INBOUND MARKETINGAppendixWe asked respondents to name the best and worst marketing programs they‘ve executed to drive leadsand sales over the past year. Represented below are their answers in a word cloud.Best Things People Did in Marketing Last Year:Worst Things People Did in Marketing Last Year: HubSpot.com 17

THE STATE OF INBOUND MARKETINGRespondent ProfilesThe State of Inbound Marketing report is based on surveys conducted in early 2009, 2010, and 2011.The 2011 results are based on responses from 644 professionals who were familiar with their business‘marketing strategy. These professionals included marketers, business owners, entrepreneurs, andexecutives at companies of various sizes. 76% of these professionals worked in business-to-businesscompanies and the range of industries varied greatly. Industries represented in the sample includedRetail, Technology, Professional Services & Consulting, Banking/Insurance/Financial Services andCommunications & Media among others. How many full-time employees does your My business primarily sells to other company have? businesses (B2B) or consumers (B2C) 201 or more B2C 17% 24% 1 to 5 39% 51 to 200 15% 26 to 50 8% B2B 11 to 25 6 to 10 76% 12% 9% What industry best describes your company? What best describes your role? Other Technology Business 27% 19% Owner / Retail / Partner Wholesale 33% 6% Marketing Banking / 50% Insurance / Professional Financial Services / Services Consulting 4% 30% Other Communicati CEO / 8% ons / Media Executive 14% 9% HubSpot.com 18

THE STATE OF INBOUND MARKETINGSample Questions AskedThe survey was designed to collect data on the marketing practices and results for a wide range ofbusinesses. This is the third consecutive year in which this survey has been conducted. Respondentswere asked a series of questions related to their business‘ marketing programs the results they haveseen. Most of the questions fell within three categories: - Marketing budget and sources of leads, including: o What percent of your sales leads come from each of your lead channels? o What percent of your lead generation budget do you spend on each of your lead channels? o Estimate the cost per lead for each of your lead channels. - Trends in ―importance‖ and ―usefulness‖ of marketing channels and leads, including: o Which sources of leads have become MORE important to you over last six months? o Which sources of leads have become LESS important to you over last six months? o How useful are social media sources to your business? - Focus on blogs and social media o Do you publish a blog? o How often do you publish a post? o Have you ever acquired a customer from the following social media / blog channels? HubSpot.com 19

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The 2011 State of Inbound Marketing

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