Inbound Marketing = Lower Cost Per Lead
More and more organizations are shifting their marketing energy from outbound to inbound marketing approaches. One of the biggest reasons is a growing awareness that inbound marketing techniques result in a dramatically lower cost per lead.
According to the 2012 State of Inbound Marketing
report from HubSpot, published in February, the average cost per lead for an inbound marketing dominated organization is $135 – 61% lower than the $346 average for outbound marketing centric firms.
Given those statistics, it’s not surprising that 47% of the survey’s 972 respondents plan to increase their inbound marketing budget in 2012 over 2011, while only 11% plan to decrease it. Growing success with inbound marketing was cited as the key reason
for a budget increase 54% of the time, whereas economic conditions were cited as the reason to decrease inbound marketing budgets in 62% of those cases.
Overall, respondents said they were allocating 35% of their lead generation budget to inbound marketing, versus 23% for outbound – a 12% differential. (For 2011 the differential was 8%.) Blogging
and social media
will garner 24% of these expenditures and 14% on SEO. Meanwhile, the chunk of the lead gen budget devoted to telemarketing has, on average, plummeted to 5% in 2012 from 10% back in 2009. Likewise, direct mail’s share of the pie has shrunk from 9% to 6% over that time.
The HubSpot report also indicated that small businesses with just one to five employees plan to spend more on inbound approaches: 43% of their lead gen budget on average, whereas larger businesses (500 or more employees) plan to spend 21% of their budgets on inbound lead gen. Small companies plan to devote 14% of their budgets to outbound approaches, versus 33% for larger organizations. The smaller businesses also plan to spend far more, percentage-wise, on social media versus larger firms (18% versus 7%) and blogging (11% versus 3%).
The low-cost leader in inbound lead gen appears to be blogging: 52% of survey respondents who blog cite blogging based leads as below their average cost per lead, whereas only 10% put blogging at above average in cost per lead.
And blogging overall appears to be worth the effort. According to a January 2012 study by the Center for Marketing Research
at the University of Massachusetts Dartmouth, entitled The 2011 Inc. 500 Social Media Update, a whopping 925 of businesses using a blogging platform in 2011 said their program was successful.
In terms of lead generation costs, other cost-effective marketing approaches were:
• Social media (below average cost for 45%, above average for 14%)
• Search engine optimization (38% below, 14% above)
• Telemarketing (33% below, 26% above)
Seen as more expensive in terms of cost per lead were:
• Pay-per-click advertising (28% below,, 25% above)
• Trade shows (19% below, 46% above)
What’s it all add up to? Inbound marketing costs less
, which is probably why small businesses are embracing it faster. Many larger companies are also moving quickly to leverage inbound techniques, but these comprise a smaller percentage of their larger lead generation budgets.
What’s your marketing budget look like for 2012? How much will you spend on blogging, a LinkedIn presence and other inbound marketing techniques?
About Murray Sye – Hi there. I’m an inbound marketing evangelist, a blogger, and a social media enthusiast. I specialize in helping businesses grow and thrive by leveraging the power of the internet.