What's the Difference Between Inbound and Outbound Marketing? And Which One is Right for Your Business?
One of the main questions that my coworkers and I get from people when we mention we work at an inbound marketing agency is: “what is inbound marketing?” This is usually immediately followed by, “How is it different from outbound marketing?” Even though inbound marketing has been around for some time now, there is still a mystery associated with it for those who have not been involved in practicing it on a daily basis. So the goal of this blog will be to explain some of the differences (and similarities) between both methodologies.
As with any other good explanatory article, let us begin with the actual definitions. A quick visit to the online encyclopedia know as Wikipedia will tell us that Inbound Marketing is defined as “marketing activities that bring visitors in, rather than marketers having to go out to get prospects' attention.” In contrast, the same website defines Outbound Marketing in its newest negative adaptation (a.k.a. Interruption Marketing) as “term that refers to promoting a product through continued advertising, promotions, public relations and sales.”
So why does outbound have negative connotations? Is inbound the end-all and be-all solution to fix the animosity towards marketing thanks to outbound’s reputation? The answers to these questions depend on the ultimate goal for your company. Let’s dig into the differences between the two.
Permission vs. Interruption
One of the main differences between inbound and outbound marketing is how consumers come into contact with each style. Inbound marketing is usually described as permission based, whereas, outbound is also known as interruption marketing.
The goal of inbound is to provide knowledge based information from subject matter experts; this is usually provided via helpful content such as blogs, eBooks or whitepapers. Whichever form is chosen for the informational content to be promoted (SEO, social media, etc.) they are then made available to consumers who are researching for more information on the topic. These consumers are in return giving “permission” to said company or brand to market to them because they want to make an informed decision prior to committing to an actual purchase.
In contrast, outbound marketing is purposely created to interrupt consumers when they might not be receptive to obtaining the input on a particular subject. The most well-known forms would be telemarketing, print, direct mail and broadcast media.
The biggest example of this difference is seen in email marketing; for inbound, emails are only sent to those who subscribe to receive more information; in contrast, outbound emails are sent to purchased lists of consumers who are not likely to be expecting said information.
One of the more obvious dissimilarities is the outlets for providing content. Inbound provides content via blogging, podcasts, whitepapers or eBooks, which are then promoted via SEO and social media. The theme is consistent with the permission aspect of inbound; the consumer has recognized there is a need/problem, they begin looking for help to get a better understanding with a simple keyword search in their engine of choice, and they tend to trust that the sources being provided are specialists based on their position. This position is called “ranking” and it can definitely impact how often a business is chosen to provide a service or product. The great thing about inbound is that providing great content also affects the ranking of a website. The more often people look at a specific website for help, the better it scores in the search engine algorithms.
On the other hand, outbound is served as online ads such as popups, paid display advertising, email/mail spam, telemarketing or TV/radio advertising. While it is possible for either popups or paid display advertising to appear when a consumer is searching online, neither one helps to influence the ranking for a business’ website. And as discussed previously, telemarketing, broadcast advertising and email/direct mail ads are all forms which most consumers just find to be nuisances. The one thing about outbound promotion that could be seen as a benefit is the massive reach that it can achieve. Inbound is mostly a niche method where specific consumers are reached, while outbound is seen by a much larger audience. If your business service or product is appropriate for a large number of viewers or trying to brand itself in the eyes of many, then outbound might be a good approach for your strategy.
For many years, outbound marketing was king, and this shows when you examine the costs behind an average campaign. According to Hubspot’s 2014 State of Inbound Report, cost per lead for outbound is between $45 and $220. Meanwhile, in the same report we are shown that the cost per lead for inbound is between $27 and $70. So if your business has a limited budget, there is a clear winner in cost effectiveness.
Now let’s discuss the similarities between both marketing methodologies. When we say similarities, we do mean similar and not identical. We already discussed how emails for inbound are sent to subscribers, so although they are sent with different expectations, both styles utilize emails to reach potential clients. That process is exactly the same when it comes to direct mail. In certain cases, it makes sense to send mail to current or potential customers, but for inbound it is once again only done to subscribers who have given permission to receive the marketing materials being sent.
Another likeness between the two is SEM (Search Engine Marketing). SEM for inbound comes in the form of PPC or pay-per-click, and its outbound brethren is called display advertising (which shows ads based on what keywords and websites consumers have previously visited.) The main difference when comparing them is the cost associated with running a campaign. Pay-per-click is – as you can probably guess – when you pay only for clicks to your ad; in display advertising you pay for viewers, which means even if someone does not click on your ad you will still pay for the privilege of showing up on their screen. The biggest complaint about display ads is that the stats are not encouraging. According to a DoubleClick report, the click through rates for display ads average at only 0.1%. Those odds are not inspiring unless, of course, your ultimate goal is pure branding.
So hopefully this is helpful in gaining a better understanding of the difference and some similarities between inbound and outbound marketing. Earlier I questioned whether inbound was the end-all and be-all to solve any problems faced due to any missteps caused by outbound methods, and my answer would be that it depends on:
- What are your business goals?
- What resources are available for any potential campaigns?
A complete marketing strategy should be based on these two questions which may determine that you need a combination of both approaches of marketing. If you need help answering these questions or creating a well-rounded strategy for your business, feel free to read any of our success stories or contact us to have one of our experts evaluate how we can help.