Inbound Marketing vs Outbound Marketing - Marketing ROI
Inbound Marketing vs Outbound Marketing – Look at today’s big spenders – my, how times have changed!

Marketing ROI has been historically difficult to track and measure.  The biggest reason for this is that the vast majority of traditional marketing outlets are one-way.  These outbound marketing channels allow advertisers to present messages to an audience, however, they have no mechanism to track the effectiveness of that message.  Sure, you might have data that shows how many listeners tune into a radio station, but you have no real way to show who listened to your ad or who was ordering drive-thru while your ad was playing. It just isn’t possible.  Below, we will look at average costs of typical outbound marketing tactics compared to inbound marketing expenses.  We will look at the effectiveness of each and how you can track the Marketing ROI of Inbound Marketing endeavors.

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Average Traditional Advertising Costs by Media Type

What is your Return on Investment?

This will be a very small paragraph.  Why?  Simply because it is practically impossible to calculate effectiveness of the above types of advertising.  Sure the newspaper might have a circulation of 50k readers, but you have no idea how many actually looked at your ad.  A billboard might be in a high traffic area but you’ll never know how many people were persuaded by it.  Traditional outbound advertising

Average Costs of Inbound Marketing Components

In contrast to traditional marketing outlets, or outbound marketing – let’s look at some average costs of internet marketing which falls more under the category of inbound marketing.  In other words – instead of disruptive and interruptive advertising that we have all learned to tune out, inbound relates to an audience that is actively seeking you out.

Return On Investment for Inbound Marketing

In stark contrast to traditional outbound marketing activities, every single aspect of online marketing can be measured, tracked and analyzed.  A website doesn’t guarantee increased business – that all depends on how persuasive the website is and how well it is used within your strategy.  However, you will know exactly how many visitors you have had, what pages they looked at, and how long they spent looking at them.  You will know where they came from and what keywords they used to arrive there.  In fact, you will be armed with lots of marketing intelligence, that, when used properly, will help you hone your online marketing strategy into an efficient lead generating tool.

Tracking Marketing ROI for Inbound Marketing Strategies

Now we can get down to the nitty gritty.  Tracking return on investment for Inbound Marketing strategies is easy.  For instance, let’s say you employ an inbound marketing firm to handle all aspects of your inbound marketing strategy, creating content, generating leads and tracking your customer’s behavior.  At any point the agency will be able to talk with you about statistics concerning your marketing strategy.  We’ll use the following table to illustrate.

Monthly Inbound Marketing Service Fee $5000
Monthly Traffic Generated 100,000 Visitors
Monthly Leads Generated 2000 (at 2% conversion)
Monthly Sales Generated $12,000
Monthly ROI 140% Return

The numbers above are simply an illustration and are designed to make the calculations simple.  The point is, however, with outbound marketing you will never have the kind of data to even perform this kind of Marketing ROI calculation.  With Inbound Marketing, however, you will have this kind of data and more.  Sometime actions will show a return. Sometimes they will not, but having the power to measure means that you can intercept poorly performing strategies and make adjustments to protect your investment.  That billboard you spend $5,000 on last month… you’ll never really know if it was worth it or not!

For more information on Inbound Marketing, click below to download a free whitepaper.

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