Why Inbound Marketing Will Cost More

Joyful SimplicitiesInbound marketing leads, according to Hubspot, cost 62% less than leads from outbound marketing. But don’t expect that cost advantage to last.

One of two things is happening:

  1. Inbound isn’t really more cost effective. Maybe Hubspot’s sample is biased or methodology is bad, but for whatever reason, the 62% isn’t true.
  2. Inbound really is more cost effective today and early adopters are reaping the benefit.

If reports of inbound marketing’s cost effectiveness are wrong, then inbound today may be far more expensive than Hubspot’s research indicates. If not, it will be soon.

The Cost of Inbound Marketing: An Economics Primer

Remember the old supply and demand curves from Economics 101? Here is the Cliff Notes version you need for today:

  • Price will eventually be set where the supply and demand curves meet in a competitive market. Supply increases as cost increases, while demand decreases.
  • Inbound and outbound marketing can be substitutes for each other.
  • The utility (value) of perfect substitute products will eventually be equal as demand shifts from one product (outbound) to another product (inbound) in order to equalize value. This shifts the demand curve for inbound out, increasing the cost to marketers, until the value of outbound and inbound are in equilibrium.

How Inbound Marketing Costs Will Increase

If inbound is more cost effective, investment will shift from outbound marketing to inbound marketing. As investment shifts, we will see at least three changes that drive up the cost of inbound marketing:

  1. More Content. When more content competes for attention, marketers need to produce more content, produce higher quality content or invest more in promoting their content in order to get the same attention.
  2. Better content. As marketing content competes for attention and at least some marketers increase quality, the overall standard for content quality will increase. Good enough content will no longer be good enough!
  3. Shorter Forms. Forms are a barrier to attention. As competition for attention increases, companies will drop or shorten forms, making it more difficult to capture leads.

What Happens When Inbound Costs More?

If inbound marketing and outbound marketing have the nearly the same return, smaller marketers may choose to focus on inbound or outbound marketing.

Larger marketers will almost certainly view it as part of the full marketing portfolio, with inbound and outbound marketing working together.

In short, inbound will become one more valuable tactic in the B2B marketer’s blended portfolio rather than an opportunity for a whole new level of ROI.

Your Turn

Will the return on inbound marketing be in line with outbound marketing over time or will inbound always have a cost advantage. Share your view in the comments below or with me on Twitter (@wittlake).

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