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INBOUND MARKETING

sector: SERVICES (B2B) | company: HUBSPOT

JAKUB RŮŽIČKA

jameslittlerose@gmail.com

linkedin.com/in/littleROSE
Jakub Růžička
jameslittlerose@gmail.com

CONTENT
(I.) INBOUND MARKETING & HUBSPOT BACKGROUND
THE FOUNDATIONS OF INBOUND MARKETING .................................................................................... 2
CONTENT MARKETING & INBOUND MARKETING................................................................................. 2
INBOUND MARKETING TECHNIQUES .................................................................................................... 3
THE LONG TAIL ...................................................................................................................................... 7
HOW TO MAKE MONEY USING FREE CONTENT ................................................................................... 8
HUBSPOT‘S EMPLOYMENT OF INBOUND MARKETING & MARKETING TOOLS .................................. 13
INBOUND MARKETING RESEARCH BY HUBSPOT ................................................................................ 15
(II.) INBOUND MARKETING & HUBSPOT COMMENTS
INBOUND MARKETING (GENERAL) DISCUSSION & LIMITATIONS ....................................................... 16
COMMENTS ON HUBSPOT .................................................................................................................. 16

LITERATURE ........................................................................................................................................ 22

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(I.) INBOUND MARKETING & HUBSPOT BACKGROUND1
THE FOUNDATIONS OF INBOUND MARKETING
HubSpot founders, Halligan and Shah, coined the term ‘inbound marketing‘ in 2006. [08] Inbound
marketing is based on the assuptions of ‘integrated marketing‘, as opposed to ‘traditional marketing‘. The
differences are shown in the table below, based on Schultz [01]:
TRADITIONAL MARKETING
•company/product/service-based
•mass communication
(reach as many people as possible)
•one-way monologue focused on sale
•offensive (repetitive persuasion)

INTEGRATED MARKETING
•customer-based
•selective communication
(reach those who care)
•two-way dialogue focused on lasting
relationship with customers
•defensive (specific information on request)

The focus on customer satisfaction by the means of selective communication and long-lasting relationship
directly stimulates data collecting and analysis. [01] Such data-driven mutual (supply & demand)
facilitation of closing a deal is a subject of a popular book by Seth Godin, ‘Permission Marketing‘ [02]
(‘permission marketing‘ is analogous to ‘inbound marketing‘), which is compared to the traditional
‘interruption marketing’ [02]:
INTERRUPTION MARKETING
•interruption
•one-to-many
•reactive
•return on investment
•public promises
•attention request
•directors

PERMISSION MARKETING
•engagement
•many-to-many
•participatory
•return on influence
•intimate conversations
•attention to given
•connectors

CONTENT MARKETING & INBOUND MARKETING
Both, content marketing and inbound marketing, are about seeking for recognition by proving your
expertise. However, there are some minor differences in their definitions. The definitions below are based
on Sheridan [07]:

1

This text contains excerpts from a draft (/working paper) of the authors dissertation at the Charles University in
Prague ‘HOW TO CREATE SELF-ENGAGED E-DU(ɔ): (Not only) Electronic and Online Copyleft (Lifelong) Education in
the Age of Information, Availability, and Accessibility & Collaboration, Self-Engagement, and Flexibility.‘ [00]

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jameslittlerose@gmail.com
INBOUND MARKETING

CONTENT MARKETING

•The process of attracting customers to
you vs the 'traditional' method of
interruption (aka 'outbound marketing').
Instead of using mediums like radio,
print, TV, direct mailers, etc. — you
create content and strategies, through
the use of blogs and social media, to
attract qualified leads to your website
and business.

•Very similar to inbound marketing, but
you use informational blog posts, videos,
etc. to teach consumers, thus earning the
trust of search engines (SEO) and
customers, resulting in more business
and sales.

According to Handley [09], creating content as a cornerstone of your marketing can [09]:

attract customers

educate your
buyers about a
purchase they are
considering

overcome
resistance or
address objections

etablish your
credibility, trust,
and authority in
your industry

tell your story

build buzz via
social networks

build a base of
fans and inspire
customers to love
you

inspire impulse
buys

Especially on social media, creating an engagement is crucial. Kerpen [10] argues that creating true
dialogue between you and your customers results in [10]:
authenticity &
highlighting brand
core values

building
communities
around trust &
loyalty

customers solving
customer service
issues

INBOUND MARKETING TECHNIQUES
In their 2010 ‘Inbound Marketing‘ book [08] Halligan & Shah sum up the basic principles of applying
‘inbound‘ to a business [08]:

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GETTING FOUND
BY PROSPECTS

BASIC
•shift to inbound
thinking
•website as a
marketing hub
•creating strategy
•tracking progress

•creating
remarkable
content
•getting found in
the blogosphere
•getting found in
Google
•getting found in
social media

CONVERTING
CUSTOMERS
•converting
visitors into leads
•converting
prospects into
leads
•converting leads
into customers

MAKING BETTER
DECISIONS
•making better
marketing
decisions
•picking and
measuring your
people
•picking and
measuring a PR
agency
•watching your
competition
•commitment,
patience &
learning

As Halligan & Shah [08] argue: ‘Magnetic or pull marketing is very effective today because prospects are
better educated. When they want information, they go to Google first and look for relevant content.‘
Therefore the techniques of the pull marketing are [08]:

SEO
(Search Engine
Optimization)

social media

video

blogging

podcast

websites

host of other
content generating
devices

Inbound marketers are creating useful content, while trying to specialize – to become a leader in a
particular field. Measurement and the word-of-mouth effect are integral to such marketing strategy. The
point of inbound is letting your prospects find you when they are looking for the products or services you
sell. Your website should be the destination for online searches, while all your communication channels
serve as a knowledge resource that people trust (helpful content). While ‘outbound‘ marketing success
might be highly dependent on your marketing campaign budget, inbound marketing should rather be
based on ‘hacking‘ – using keywords, creating, optimizing, promoting, converting & analyzing. [08]

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Create
Convert &
Analyse

Promote

Optimize

STRANGERS
blog

social
media

calls-toaction

landing
pages

e-mails

signals

workflows

events

social
inbox

smart
content

VISITORS

keywords

forms

ATTRACT

CONVERT

LEADS

CLOSE

CUSTOMERS

DELIGHT

PROMOTERS

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THE LONG TAIL
Inbound marketing is closely related to online business environment, as the need of communicating your
message to a specific audience needs means for targeting niche markets. Chris Anderson’s2 concept of
‘Long Tail’ [13] explains that even though consumers buy mainstream products, there is a real demand for
niche products that are not available in brick-and-mortar stores (e.g. due to limited storage capacity).
These products can be found online only. The lesson is that the quantity of (small) niche markets is very
high and nowadays we do have means to meet such broad/individual demand.

The ‘Market of Multitudes’ concept means that even though we still do like mainstream products (the
traditional mainstream/hit/retail stores will not disappear), they are not so economically powerful as they
used to be. Everything in the world becomes available to everyone. Millions of items may sell only a few
copies at a value that could be higher than the ‘hits’ - those few items that sell millions each3. Such strategy
is becoming more cost-effective as the cost of reaching niche markets is falling down (by the means of
ICT). Therefore it flatters the demand curve – less popular products are gaining higher importance. ‘What
2

Chris Anderson is not the originator of the term, but its popularizer.
For example, more than a quarter of Amazon’s (world's largest online retailer) book sales come from outside its
top 100,000 titles. As Anderson states: ‘Estimating Amazon’s Long Tail gave me both an analytical framework on
which to build the theory and the confidence to know that it could be done.’ [66] Other examples include Google
AdWords (online targeted advertising service) or eBay (online auction).
3

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jameslittlerose@gmail.com
the Long Tail offers, however, is the encouragement to not be dominated by the 80/20 Rule. Even if 20
percent of the products account for 80 percent of the revenue, that’s no reason not to carry the other 80
percent of the products. In Long Tail markets, where the carrying costs of inventory are low, the incentive
is there to carry everything, regardless of the volume of its sales.’ [13]
Thus, the key Long Tail characteristics are:
the ability to offer more
products by providers /
producers / prosumers

the ability to find and buy
more products by
consumers / prosumers

'make everything available'

'help me find it'

the mutually beneficial
ability of meeting the
demand of niche markets

HOW TO MAKE MONEY USING FREE CONTENT
Chris Anderson [03] says that free is becoming a business strategy. And in future, it might be essential for
any company to survive. ‘The obvious reason most products are not free is because their production costs
are not zero – it costs money to make things and that cost must be met. Digital markets are an exception
to the rule. For almost all digital products, the marginal cost of reproduction is zero. Therefore, sooner or
later, it is almost inevitable producers in the digital realm will find themselves competing against products
which are free. Accepting this fact, the smart thing to do is to try and figure out how to use a zero price
point profitably yourself and get there first.’ [04] [03]
‘Economists have known for hundreds of years one fact: ‘In a competitive marketplace, price always falls
to the marginal cost.’ This was of academic interest only until everyone joined hands to build the world’s
first truly competitive marketplace – the Internet. In this, the most competitive marketplace the world
has ever seen, free is not just an option. Rather, free is the inevitable endpoint which is generated by the
forces of economic gravity. You will be far better off acknowledging this reality and becoming one of the
first in your industry to figure out how to build a business model based around free that still makes you
money. This will take creative thinking and ongoing experimentation to get right but by being an earlymover in finding ways to exploit free, you can position yourself advantageously. That head start just may
be enough to give you a sustainable competitive advantage. Above all, swap scarcity thinking for
abundance thinking – because sooner or later, that’s where every industry is heading.’ says Anderson.
[04] [03]
SCARCITY
You have to get permission
'We know what's best'
Business model
Top-down
Command and control

ABUNDANCE
rules
social model
profit plat
decision process
management

anything goes
‘You know what’s best’
figure it out as we go
bottom-up
out of control

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jameslittlerose@gmail.com
Anderson introduces four basic business models of free [03] [04]:
•The producer gives the consumer product 1 for free in the hope this will then entice the
consumer to subsequently purchase product 2.

DIRECT
CROSSSUBSIDIES

THREEPARTY
MARKETS

FREEMIUM

EXAMPLE: a supermarket offers one item for sale at below cost in the hope while you’re
in the store, you will be enticed to purchase something else which generates a profit
EXAMPLE: a cell phone company might lose money on its per minute charges
(something consumers are highly sensitive about) in order to make money by charging
voice mail fees.

•The producer provides product 1 free-of-charge to consumers. Advertisers pay to be
included in product 1 in the hope they will be able to sell product 3 to the consumer.
EXAMPLE: advertisers buy advertising from the publisher (product 2) so they can then
sell what they have to offer to the consumers who read the magazines or watch the TV
shows

•A free version (product 1) is made available to anyone who wants it in the hope some
users will then choose to upgrade to the paid premium version (product 2) which has
more features.
EXAMPLE: Flickr1 and Flickr Pro which is available for $25 a year
EXAMPLE: nightclubs which admit women for free so they can then charge the men an
admission fee

•In some markets, no money changes hands at all. People gift or give things to each
other without any ulterior motives or expectation of future payment whatsoever. In
order to become well known rather than because they are being paid.

NONMONETARY
MARKETS

EXAMPLE: Every time you search on Google, you’re helping the company improve its adtargeting algorithms, creating information that can be useful
EXAMPLE: reputation, attention, expression, fun, good karma, satisfaction, self-interest
etc.
EXAMPLE: artists giving away their music online as a way of marketing concerts,
merchandise, licensing, and other paid fare
EXAMPLE: unintentional/passive giving

Flickr4
Today, there are at least fifty different advertising models which people are using to generate revenue
from online businesses. Some of the options which are already in use [03] [04]:

4

Flickr (stylized as flickr and pronounced ‘flicker’) is an image hosting and video hosting website, and web services
suite that was created by Ludicorp in 2004 and acquired by Yahoo! in 2005. In addition to being a popular website
for users to share and embed personal photographs, and effectively an online community, the service is widely
used by photo researchers and by bloggers to host images that they embed in blogs and social media. [Wikipedia]

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COST PER
TRANSACTION

•advertisers only pay a fee whenever a viewer purchases something and
becomes a paying customer

LEAD GENERATION

•advertisers pay for the name and e-mail addresses of people who have
expressed interest in something

SITE SPONSORSHIP

•advertisers pay a fixed sum to be associated with a Web site offering some
content

PAY FOR PROMINENT
PLACEMENT IN SEARCH
RESULTS

•advertisers pay to be listed ahead of others

PRODUCT PLACEMENT

•advertisers pay to have their brand or goods included in a video clip or an
online game

SUBSCRIPTIONS
PRODUCT UPGRADE
CHARGES
SELLING VIRTUAL
ITEMS
SELLING ITEMS WITH
MATCHING ONLINE
VIRTUAL VERSIONS

•access to content like online games or for a wide variety of other specialized
information for a specified period

•to move from the free version of something to the full version with better
features

•people pay for unlock codes which allow them to upgrade their online
personas in games or other online simulations

•e.g. Webkinz2: kids get an ordinary stuffed animal with a special code which
allows them to go online and play with a digital version of their toy

Note, that the ‘free business models’ are somewhat similar to those that exist in the open source
community. Weber [05] outlines a number of possible business models for open source software - in
accordance with Frank Hecker’s and Robert Young’s ‘Under the Radar’ [06]:

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jameslittlerose@gmail.com
SUPPORT
SELLERS

•package and distribute open source software on convenient media, and offer a set of
technical support and customization services to users

LOSS LEADERS

•give away open source software as a way of generating demand and seeding a larger
market for a linked commercial product

'SELL IT, FREE IT'
MODEL

•a company would first sell its software under traditional commercial terms and then, at some point later
in the product life cycle, release the code as open source
•that point would be reached when the benefits of an open source development process are believed to
outweigh the proprietary licensing revenues
•the open source product would then function as a loss leader for the next-generation commercial
product.

ACCESSORIZING

•selling physical accessories that make it easier to use open source software

SERVICE
ENABLERS

BRANDING

•distribute and support open source software primarily to generate traffic to other
revenue-generating services

•the company owns the brand, not the source code, by retaining exclusive rights to its product
trademark
•if someone else wants to make a software product from the open source code, they can do so
but they cannot label the new product with the 'brand name' (unless the branding company sells
the right to do so, for example, by franchising)
•the question of why customers would pay for a branded open source product is essentially the
same question as why people pay for branded commodities in any part of the economy
•the brand has a perceived value that often reflects some 'real' value (perhaps the branded
product undergoes additional testing, perhaps the customer has increased confidence that the
branding company will be around a few years later, or perhaps the brand is part of the
'experience' that the customer is willing to pay for in buying a product)

Webkinz5
As Anderson [03] argues, the economist’s objection of hidden/opportunity costs is valid. However, we
can’t directly (we actually can indirectly) measure the impact – therefore they are perceived as free. As
Anderson puts it [03]:

5

‘Webkinz’ are toy stuffed animals that have a playable online counterpart in ‘Webkinz World’. [Wikipedia]

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Jakub Růžička
jameslittlerose@gmail.com

"

What cannot be directly measured in economic systems is hand-waved away into a
category called ‘externalities‘ (for example, when you buy a pair of shoes you are not
charged for the environmental impact of the carbon released in their manufacture - that’s
called a ‘negative externality,‘ which we’ll discuss at length below). A lot of the costs in that
free lunch fall under the category of externalities - technically there, but immaterial to you.
To demonstrate, let’s try to follow the money as you pay for reading a Wikipedia entry. The
Wikipedia Foundation, which pays for the servers and bandwidth that Wikipedia runs on, is a
nonprofit supported by donors, both corporate and individual. Assuming you are not one of
those individual donors (and only a minute fraction of Wikipedia’s users are), perhaps you
are a customer of one of Wikipedia’s corporate donors, such as Sun Microsystems. In that
case, you may be paying a tiny fraction of a cent more for Sun servers than you would
otherwise, to pad Sun’s profit margin enough that it can make a charitable donation. Not a
Sun customer? Well, Google is a Wikipedia donor, too. Perhaps you once paid for a Google
ad that was a zillionth of a cent more expensive than it otherwise would have been had
Google not made the donation. Not an advertiser? Well, then maybe you bought a product
from one of Google’s advertisers, and that product was a gazillionth of a cent more
expensive because of this chain of events.
At this point we’re talking about fractions of a cent that are like an atom in that penny. In
other words, although you can probably argue that you are ultimately paying for that
Wikipedia entry, it is only true in the sense that the flutter of a butterfly wing in China could
influence your weather next week. Technically, there may be a connection, but it is too small
to measure, and so we don’t bother. " [03]
In the same consideration, we are not able to measure whether the revenues of a pop star would by
higher or lower without music piracy – lower revenues from a record’s sales, vs. higher revenues from
higher audience reach (revenues from concerts, merchandize, limited editions etc.). On the other hand,
we can say that the value of music sharing (or any other virtual content) is zero. The fact is that virtual
piracy can (usually) provide us with content in its original quality - as opposed to physical goods or humanmade action (e.g. providing a service). Therefore, as a result of the ongoing increases in processing,
storage and bandwidth, information distributed via the digital network move in two directions [04]:

CUSTOMIZED INFORMATION
specific and tailored to your
requirements

will go up in marginal cost
INFORMATION
COMMODITY INFORMATION
everybody gets the same version
will go down in marginal cost
The ‘young generation’ might not appreciate the values of the ‘old generation’ because these are in
abundance. So they/we, naturally, search for scarcity values: free coffee at work vs. a coffee in a café
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across the street (possibly better-tasting & better-experience); free information on Wikipedia vs. premium
information in the New York Times; free user account letting you use an application once a day vs. an
unlimited premium account; and so on. [03]
The existence of ‘free riders’ also does not seem to be a problem if we consider: 1) the cost of the
virtual/online resource being consumed is not high enough to care about; 2) the effect of the Internet’s
scale; 3) ‘passive’ and ‘free riding’ does not mean ‘without any effect’ (e.g. increased readership results in
increased visibility). [03]
On the other hand, ‘free may be the best price (reach the audience), but it can’t be the only one (covering
expenses & having the means to provide high-quality content)’. [04] ‘Moreover, no discussion of free can
avoid ‘The Tragedy of the Commons6.’ If we don’t have to pay for things, we tend to consume them to
excess.’ [03]

HUBSPOT‘S EMPLOYMENT OF INBOUND MARKETING & MARKETING TOOLS
Naturally, HubSpot is not concerned just with the theoretical concept of ‘inbound‘ & teaching it, but it’s
especially a practitioner of inbound marketing. The table below summarizes HubSpot’s inbound marketing
strategy, as perceived by the author of this text:

6

In economics, the tragedy of the commons is the depletion of a shared resource by individuals, acting
independently and rationally according to each one's self-interest, despite their understanding that depleting the
common resource is contrary to the group's long-term best interests. [Wikipedia] ‘The classic tragedy of the
commons example (which biologist Garrett Hardin used in a 1968 article) is sheep grazing on the commonly owned
village green. Since sheep owners don’t have to pay for the land, they are not incentivized to preserve it. Indeed, it
is even worse: Since they know that others are similarly able to waste the resource, they may choose to gain a bigger
share of the benefit by wasting it faster, grazing more of their sheep, more of the time, until quickly the green is
brown.
This is the consequence of what economists call ‘uncompensated negative externalities.’ When things are actually
scarce (limited) but we price them as if they were abundant (essentially unlimited), bad things can happen.’ [03]

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BEING RELEVANT TO NICHE AUDIENCE (ONLINE MARKETERS)

PERSONALIZED (ON-DEMAND) •including website (by using user accounts)
CONTENT

PROVING EXPERTISE & EDUCATING AUDIENCE (BY PULL MARKETING)

CONTENT MARKETING

•study materials for free (see below)
•providing download button access in return to user data collection
•analysing data to provide more individualised content, which is assumed to result in a higher
probability of conversion/purchase
•teaching inbound using ebooks, videos, webinars, research & case studies

FREE EDUCATIONAL CONTENT •HubSpot Academy
•conferences

CLOSE RELATIONS WITH TARGET AUDIENCE

E-MAIL MARKETING

•personalised e-mails providing free content and follow-up e-mails

SOCIAL MEDIA

INCREASING TRUST
OPENNESS & FRANKNESS
•explaining in detail business methods HubSpot employs
ABOUT INTERNAL CORPORATE •blog
PROCESSES
ENDORSEMENTS
OFFERING/SELLING
SOLUTIONS/SOFTWARE
HUBSPOT ITSELF IS USING
FREE SOFTWARE TRIALS

•customer testimonials
•awards

•e-mail / blogging / landing pages / calls-to-action / SEO / signals / social media / lead management /
marketing automation / marketing analytics

•& providing free tools such as twitter/website/marketing grader

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INBOUND MARKETING RESEARCH BY HUBSPOT
Anually, HubSpot conducts a research among inbound marketing practitioners, which are helpful in
discussing inbound marketing benefits, as well as challenges, assumptions & limitations. ‘The State of
Inbound Marketing‘ 2009 report [11] is based on a survey issued by HubSpot in late 2008 (which makes it
the very first of its kind). The survey was completed by 167 professionals involved or familiar with their
business’ marketing strategy. These professionals included marketers, business owners, entrepreneurs,
executives and salespeople in businesses of all sizes. 71% of these professionals worked in business-tobusiness companies and approximately one-quarter of those surveyed worked in the business or
professional services sector. The State of Inbound Marketing offers readers three key findings7 [11]:

Inbound marketing
channels deliver a
dramatically lower
cost-per-sales lead
than outbound
channels.

•Respondents that spent more than 50% of their marketing budget on inbound
marketing consistently reported a lower cost-per-sales lead than those that spent
50% or more on outbound marketing. In fact, inbound marketing-dominated
organizations experience a 61% lower cost-per-lead than outbound marketingdominated organizations.
•Businesses are responding by allocating a greater portion of their budget to
inbound marketing. Currently, 37% of business’ lead-generation budget is
dedicated to inbound marketing, whereas 30% is dedicated to outbound
marketing efforts. We expect this gap to widen significantly over time.

Blogs lead other social
media categories in
terms of importance
to business.

•Blogs are frequently cited as the most useful type of social media marketing, with
75% of those familiar with their business’ blogging efforts saying they are ‘useful,’
‘important,’ or ‘critical’ to their business. MySpace finished last in terms of
importance of those that use the service for business purposes.

Small businesses are
most aggressively
allocating lead
generation budgets to
blogging, social media
and search engine
optimization.

•Realizing that inbound marketing techniques ‘level the playing field’ with the
bigger budgets of larger competitors, small businesses are spending a 180%
greater portion of their budgets on blogging/social media and 36% greater portion
of their budgets on search engine optimization than businesses with 50 employees
or more.

If we compare the 2009 results with the current 2013 results, the key challenges in adopting inbound
marketing become obvious [12]:

7

Please note that (naturally) the findings might be subject to various biases, as HubSpot itself is a creator, a
promoter and a practitioner of inbound marketing.

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The biggest challenge is to
convince the board to shift from
traditional advertising to digital
and online marketing.

One-quarter of marketers report
that their top challenge in 2013 is
proving the ROI of their inbound
marketing efforts. As we will see
in the next chapter, the lack of
reliable metrics for reporting ROI
is a major obstacle for marketers.

Only 18% of the marketers are
focused on creating quality
content.

(II.) INBOUND MARKETING & HUBSPOT COMMENTS
INBOUND MARKETING (GENERAL) DISCUSSION & LIMITATIONS

is inbound for
services only?

free riders vs
paying customers
(wide reach
needed)

sustainability of
the business model

business growth
(the long tail of
marketing vs.
'mainstream')

data collection &
analysis

do also customers
need to change?
(free riding only)

COMMENTS ON HUBSPOT

490 global traffic rank in the early
December 2013 (up 272 vs. the previous
3 months) [14]

Both, ‘HubSpot’ & ‘inbound‘ search terms
are growing in numbers since 2007
(HubSpot was founded in mid 2006). The
interest seems to be highest in the US,
Ireland, India, Canada, United Kingdom,
Spain, Germany, Austria & Netherlands
(i.e. expanding to other markets beyond
U.S.). [15]

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regarding social media, HubSpot’s
Facebook [16] & Twitter [17] fan/follower
base is growing, increasing their potential
reach

& it's imporant to say that HubSpot‘s
revenues seem to grow as well [18]

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HubSpot’s e-mails
address (potential)
customers by their
name and/or by the
company they work
for

HubSpot promotes its
concept of ‘inbound’ as the
next (& latest) stage in the
development of marketing,
positioning itself as a
‘revolutionist’

What I
don't
like

HubSpot sends
personalized (based
on the data you
provide them) ebooks on a regular
basis

HubSpot’s e-mails, e-books,
conferences etc. are
‘signed’ by their employees

the feeling that the
company actually
cares about you

HubSpot sends its e-books
to non-payers as well (in
exchange for a couple of
survey questions), which
results in higher reach &
general awareness about
‘inbound marketing‘ &
communicating leadership
in the category

the company raises &
promotes their employees
as experts in the field and
is positioning itself as the
leader in online marketing
(creating a knowledge gap
of ‘inbound‘ & filling it with
its services)

• HubSpot’s CRM database doesn’t seem to 'grow with the customer'. It
could be improved by distinguishing between less & more experienced
customers (not sending ‘for dummies‘ e-books all the time).

HubSpot has its
own software

profits go to
them

they invest it in
new products
development

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Jakub Růžička
jameslittlerose@gmail.com

HubSpot as online fullservice & extending product
portfolio – the list of
services available at [19]

smaller specialized
competitors

HubSpot‘s own ‘inbound‘
sector/category (specialize
in it & extend it)

becoming a ‘generic
trademark‘ (regarding its
blend with the ‘integrated
marketing‘ general trend)

PUSH marketing
‘calls to action‘

PULL (content) marketing
no matter whether you buy
or not + their own
marketing research to
recognize the needs &
worries of online marketers

Page | 20
Jakub Růžička
jameslittlerose@gmail.com

INBOUND IN THE CZECH REPUBLIC ISSUES
the necessity of having a
solid strategic plan
(/business model) when
sharing free content (e.g.
'freemium') seems to be
frequently omitted

...as well as the necessity of
knowing what to measure &
in which way your online
(/social media) content pays
off

the necessity of sharing
(useful) content relevant to
a particular business with a
relevant call to action in it

Page | 21
Jakub Růžička
jameslittlerose@gmail.com

LITERATURE
[00] RŮŽIČKA, Jakub. HOW TO CREATE SELF-ENGAGED E-DU(ɔ): (Not only) Electronic and Online Copyleft
(Lifelong) Education in the Age of Information, Availability, and Accessibility & Collaboration, SelfEngagement, and Flexibility. [Dissertation, Unpublished]. Charles University in Prague, Faculty of Social
Sciences, Institute of Sociological Studies. Sociology Department. Supervisor: Mgr. Ing. Jiří Remr Ph.D.,
MBA.
[01] SCHULTZ, Don E, Stanley I. TANNENBAUM and Robert F. LAUTERBORN. Integrated Marketing
Communications. Lincolnwood, Illinois, USA: NTC Business Books, 1993, 218p. 2nd, illustrated. ISBN
0844233633; 9780844233635.
[02] GODIN, Seth. Permission Marketing: Turning Strangers into Friends and Friends into Customers.
2012 edition. London, UK: Simon & Schuster, 1999, 256p. ISBN 1471105776; 9781471105777.
[03] ANDERSON, Chris. Free: The Future of a Radical Price. 1st ed. New York: Hyperion, 2009, 288p. ISBN
14-013-2290-5; 9781401322908.
[04] Summaries.com. FREE: The Future of a Radical Price. Chris Anderson. Hamilton, New Zealand:
BusinessNews Publishing Ltd., 2009.
[05] WEBER, Steve. The Success of Open Source. Cambridge, MA: Harvard University Press, 2004, 320 p.
illustrated. ISBN 0-674-01292-5; 9780674012929.
[06] YOUNG, Robert; ROHM, Wendy Goldman. Under the Radar: How Red Hat Changed the Software
Business and Took Microsoft by Surprise. Scottsdale, Arizona: Coriolis, 1999. 197p. ISBN 15-761-0506-7.
[07] SHERIDAN, Marcus. Inbound and Content Marketing Made Easy. The Sales Lion, 2012, 384p.
[08] HALLIGAN, Brian and Dharmesh SHAH. Inbound marketing: Get found using Google, social media,
and blogs. Hoboken, New Jersey, USA: Wiley, 2010, 256 s. ISBN 0470499311; 978-0470499313.
[09] HANDLEY, Ann. CONTENT RULES: HOW TO CREATE KILLER BLOGS, PODCASTS, VIDEOS, EBOOKS,
WEBINARS (AND MORE) THAT ENGAGE CUSTOMERS AND IGNITE YOUR BUSINESS. 2012, Hoboken, N.J:
Wiley. ISBN 0470948728; 9780470948729.
[10] KERPEN, Dave. 2011. LIKEABLE SOCIAL MEDIA: HOW TO DELIGHT YOUR CUSTOMERS, CREATE AN
IRRESISTIBLE BRAND, AND BE GENERALLY AMAZING ON FACEBOOK (AND OTHER SOCIAL NETWORKS).
New York: McGraw-Hill. ISBN 00-717-6950-1; 9780071769501.
[11] HUBSPOT. The State of Inbound Marketing [online]. Cambridge, Massachusetts, USA: HubSpot,
2009 [Retrieved 2013-10-20]. http://bit.ly/GWkLat
[12] HUBSPOT. 2013 State of Inbound Marketing [online]. Cambridge, Massachusetts, USA: HubSpot,
2013 [Retrieved 2013-10-20]. http://www.stateofinboundmarketing.com/
[13] ANDERSON, Chris. The Long Tail: Why the Future of Business is Selling Less of More. Hyperion
Books, 2008, 288 p. Revised and Updated Edition (revised, illustrated). ISBN 1401309666;
9781401309664.

Page | 22
Jakub Růžička
jameslittlerose@gmail.com
[14] HubSpot.com. Alexa [online]. Alexa Internet, Inc., 2013 [Retrieved 2013-12-03].
http://bit.ly/18euK5i
[15] Inbound Marketing & HubSpot. Google Trends [online]. Google, Inc, 2013 [Retrieved 2013-12-03].
http://bit.ly/1bdkIBC
[16] HubSpot Facebook Page Statistics. SocialBakers [online]. 2013 [Retrieved 2014-1-03].
http://bit.ly/187PwWp
[17] HubSpot Twitter Statistics. SocialBakers [online]. 2013 [Retrieved 2014-01-03].
http://bit.ly/1cWB1Cl
[18] ALSPACH, Kyle. HubSpot ups revenue 82% to $53M in 2012, eyes 1-2 acquisitions this year. Boston
Business Journal [online]. 2013 [Retrieved 2013-12-03]. http://bit.ly/19ePPK8
[19] Pricing. HubSpot [online]. HubSpot, Inc, 2013 [Retrieved 2013-12-03]. http://bit.ly/18q3sLU

Page | 23

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Inbound Marketing: HubSpot

  • 1. INBOUND MARKETING sector: SERVICES (B2B) | company: HUBSPOT JAKUB RŮŽIČKA jameslittlerose@gmail.com linkedin.com/in/littleROSE
  • 2. Jakub Růžička jameslittlerose@gmail.com CONTENT (I.) INBOUND MARKETING & HUBSPOT BACKGROUND THE FOUNDATIONS OF INBOUND MARKETING .................................................................................... 2 CONTENT MARKETING & INBOUND MARKETING................................................................................. 2 INBOUND MARKETING TECHNIQUES .................................................................................................... 3 THE LONG TAIL ...................................................................................................................................... 7 HOW TO MAKE MONEY USING FREE CONTENT ................................................................................... 8 HUBSPOT‘S EMPLOYMENT OF INBOUND MARKETING & MARKETING TOOLS .................................. 13 INBOUND MARKETING RESEARCH BY HUBSPOT ................................................................................ 15 (II.) INBOUND MARKETING & HUBSPOT COMMENTS INBOUND MARKETING (GENERAL) DISCUSSION & LIMITATIONS ....................................................... 16 COMMENTS ON HUBSPOT .................................................................................................................. 16 LITERATURE ........................................................................................................................................ 22 Page | 1
  • 3. Jakub Růžička jameslittlerose@gmail.com (I.) INBOUND MARKETING & HUBSPOT BACKGROUND1 THE FOUNDATIONS OF INBOUND MARKETING HubSpot founders, Halligan and Shah, coined the term ‘inbound marketing‘ in 2006. [08] Inbound marketing is based on the assuptions of ‘integrated marketing‘, as opposed to ‘traditional marketing‘. The differences are shown in the table below, based on Schultz [01]: TRADITIONAL MARKETING •company/product/service-based •mass communication (reach as many people as possible) •one-way monologue focused on sale •offensive (repetitive persuasion) INTEGRATED MARKETING •customer-based •selective communication (reach those who care) •two-way dialogue focused on lasting relationship with customers •defensive (specific information on request) The focus on customer satisfaction by the means of selective communication and long-lasting relationship directly stimulates data collecting and analysis. [01] Such data-driven mutual (supply & demand) facilitation of closing a deal is a subject of a popular book by Seth Godin, ‘Permission Marketing‘ [02] (‘permission marketing‘ is analogous to ‘inbound marketing‘), which is compared to the traditional ‘interruption marketing’ [02]: INTERRUPTION MARKETING •interruption •one-to-many •reactive •return on investment •public promises •attention request •directors PERMISSION MARKETING •engagement •many-to-many •participatory •return on influence •intimate conversations •attention to given •connectors CONTENT MARKETING & INBOUND MARKETING Both, content marketing and inbound marketing, are about seeking for recognition by proving your expertise. However, there are some minor differences in their definitions. The definitions below are based on Sheridan [07]: 1 This text contains excerpts from a draft (/working paper) of the authors dissertation at the Charles University in Prague ‘HOW TO CREATE SELF-ENGAGED E-DU(ɔ): (Not only) Electronic and Online Copyleft (Lifelong) Education in the Age of Information, Availability, and Accessibility & Collaboration, Self-Engagement, and Flexibility.‘ [00] Page | 2
  • 4. Jakub Růžička jameslittlerose@gmail.com INBOUND MARKETING CONTENT MARKETING •The process of attracting customers to you vs the 'traditional' method of interruption (aka 'outbound marketing'). Instead of using mediums like radio, print, TV, direct mailers, etc. — you create content and strategies, through the use of blogs and social media, to attract qualified leads to your website and business. •Very similar to inbound marketing, but you use informational blog posts, videos, etc. to teach consumers, thus earning the trust of search engines (SEO) and customers, resulting in more business and sales. According to Handley [09], creating content as a cornerstone of your marketing can [09]: attract customers educate your buyers about a purchase they are considering overcome resistance or address objections etablish your credibility, trust, and authority in your industry tell your story build buzz via social networks build a base of fans and inspire customers to love you inspire impulse buys Especially on social media, creating an engagement is crucial. Kerpen [10] argues that creating true dialogue between you and your customers results in [10]: authenticity & highlighting brand core values building communities around trust & loyalty customers solving customer service issues INBOUND MARKETING TECHNIQUES In their 2010 ‘Inbound Marketing‘ book [08] Halligan & Shah sum up the basic principles of applying ‘inbound‘ to a business [08]: Page | 3
  • 5. Jakub Růžička jameslittlerose@gmail.com GETTING FOUND BY PROSPECTS BASIC •shift to inbound thinking •website as a marketing hub •creating strategy •tracking progress •creating remarkable content •getting found in the blogosphere •getting found in Google •getting found in social media CONVERTING CUSTOMERS •converting visitors into leads •converting prospects into leads •converting leads into customers MAKING BETTER DECISIONS •making better marketing decisions •picking and measuring your people •picking and measuring a PR agency •watching your competition •commitment, patience & learning As Halligan & Shah [08] argue: ‘Magnetic or pull marketing is very effective today because prospects are better educated. When they want information, they go to Google first and look for relevant content.‘ Therefore the techniques of the pull marketing are [08]: SEO (Search Engine Optimization) social media video blogging podcast websites host of other content generating devices Inbound marketers are creating useful content, while trying to specialize – to become a leader in a particular field. Measurement and the word-of-mouth effect are integral to such marketing strategy. The point of inbound is letting your prospects find you when they are looking for the products or services you sell. Your website should be the destination for online searches, while all your communication channels serve as a knowledge resource that people trust (helpful content). While ‘outbound‘ marketing success might be highly dependent on your marketing campaign budget, inbound marketing should rather be based on ‘hacking‘ – using keywords, creating, optimizing, promoting, converting & analyzing. [08] Page | 4
  • 8. Jakub Růžička jameslittlerose@gmail.com THE LONG TAIL Inbound marketing is closely related to online business environment, as the need of communicating your message to a specific audience needs means for targeting niche markets. Chris Anderson’s2 concept of ‘Long Tail’ [13] explains that even though consumers buy mainstream products, there is a real demand for niche products that are not available in brick-and-mortar stores (e.g. due to limited storage capacity). These products can be found online only. The lesson is that the quantity of (small) niche markets is very high and nowadays we do have means to meet such broad/individual demand. The ‘Market of Multitudes’ concept means that even though we still do like mainstream products (the traditional mainstream/hit/retail stores will not disappear), they are not so economically powerful as they used to be. Everything in the world becomes available to everyone. Millions of items may sell only a few copies at a value that could be higher than the ‘hits’ - those few items that sell millions each3. Such strategy is becoming more cost-effective as the cost of reaching niche markets is falling down (by the means of ICT). Therefore it flatters the demand curve – less popular products are gaining higher importance. ‘What 2 Chris Anderson is not the originator of the term, but its popularizer. For example, more than a quarter of Amazon’s (world's largest online retailer) book sales come from outside its top 100,000 titles. As Anderson states: ‘Estimating Amazon’s Long Tail gave me both an analytical framework on which to build the theory and the confidence to know that it could be done.’ [66] Other examples include Google AdWords (online targeted advertising service) or eBay (online auction). 3 Page | 7
  • 9. Jakub Růžička jameslittlerose@gmail.com the Long Tail offers, however, is the encouragement to not be dominated by the 80/20 Rule. Even if 20 percent of the products account for 80 percent of the revenue, that’s no reason not to carry the other 80 percent of the products. In Long Tail markets, where the carrying costs of inventory are low, the incentive is there to carry everything, regardless of the volume of its sales.’ [13] Thus, the key Long Tail characteristics are: the ability to offer more products by providers / producers / prosumers the ability to find and buy more products by consumers / prosumers 'make everything available' 'help me find it' the mutually beneficial ability of meeting the demand of niche markets HOW TO MAKE MONEY USING FREE CONTENT Chris Anderson [03] says that free is becoming a business strategy. And in future, it might be essential for any company to survive. ‘The obvious reason most products are not free is because their production costs are not zero – it costs money to make things and that cost must be met. Digital markets are an exception to the rule. For almost all digital products, the marginal cost of reproduction is zero. Therefore, sooner or later, it is almost inevitable producers in the digital realm will find themselves competing against products which are free. Accepting this fact, the smart thing to do is to try and figure out how to use a zero price point profitably yourself and get there first.’ [04] [03] ‘Economists have known for hundreds of years one fact: ‘In a competitive marketplace, price always falls to the marginal cost.’ This was of academic interest only until everyone joined hands to build the world’s first truly competitive marketplace – the Internet. In this, the most competitive marketplace the world has ever seen, free is not just an option. Rather, free is the inevitable endpoint which is generated by the forces of economic gravity. You will be far better off acknowledging this reality and becoming one of the first in your industry to figure out how to build a business model based around free that still makes you money. This will take creative thinking and ongoing experimentation to get right but by being an earlymover in finding ways to exploit free, you can position yourself advantageously. That head start just may be enough to give you a sustainable competitive advantage. Above all, swap scarcity thinking for abundance thinking – because sooner or later, that’s where every industry is heading.’ says Anderson. [04] [03] SCARCITY You have to get permission 'We know what's best' Business model Top-down Command and control ABUNDANCE rules social model profit plat decision process management anything goes ‘You know what’s best’ figure it out as we go bottom-up out of control Page | 8
  • 10. Jakub Růžička jameslittlerose@gmail.com Anderson introduces four basic business models of free [03] [04]: •The producer gives the consumer product 1 for free in the hope this will then entice the consumer to subsequently purchase product 2. DIRECT CROSSSUBSIDIES THREEPARTY MARKETS FREEMIUM EXAMPLE: a supermarket offers one item for sale at below cost in the hope while you’re in the store, you will be enticed to purchase something else which generates a profit EXAMPLE: a cell phone company might lose money on its per minute charges (something consumers are highly sensitive about) in order to make money by charging voice mail fees. •The producer provides product 1 free-of-charge to consumers. Advertisers pay to be included in product 1 in the hope they will be able to sell product 3 to the consumer. EXAMPLE: advertisers buy advertising from the publisher (product 2) so they can then sell what they have to offer to the consumers who read the magazines or watch the TV shows •A free version (product 1) is made available to anyone who wants it in the hope some users will then choose to upgrade to the paid premium version (product 2) which has more features. EXAMPLE: Flickr1 and Flickr Pro which is available for $25 a year EXAMPLE: nightclubs which admit women for free so they can then charge the men an admission fee •In some markets, no money changes hands at all. People gift or give things to each other without any ulterior motives or expectation of future payment whatsoever. In order to become well known rather than because they are being paid. NONMONETARY MARKETS EXAMPLE: Every time you search on Google, you’re helping the company improve its adtargeting algorithms, creating information that can be useful EXAMPLE: reputation, attention, expression, fun, good karma, satisfaction, self-interest etc. EXAMPLE: artists giving away their music online as a way of marketing concerts, merchandise, licensing, and other paid fare EXAMPLE: unintentional/passive giving Flickr4 Today, there are at least fifty different advertising models which people are using to generate revenue from online businesses. Some of the options which are already in use [03] [04]: 4 Flickr (stylized as flickr and pronounced ‘flicker’) is an image hosting and video hosting website, and web services suite that was created by Ludicorp in 2004 and acquired by Yahoo! in 2005. In addition to being a popular website for users to share and embed personal photographs, and effectively an online community, the service is widely used by photo researchers and by bloggers to host images that they embed in blogs and social media. [Wikipedia] Page | 9
  • 11. Jakub Růžička jameslittlerose@gmail.com COST PER TRANSACTION •advertisers only pay a fee whenever a viewer purchases something and becomes a paying customer LEAD GENERATION •advertisers pay for the name and e-mail addresses of people who have expressed interest in something SITE SPONSORSHIP •advertisers pay a fixed sum to be associated with a Web site offering some content PAY FOR PROMINENT PLACEMENT IN SEARCH RESULTS •advertisers pay to be listed ahead of others PRODUCT PLACEMENT •advertisers pay to have their brand or goods included in a video clip or an online game SUBSCRIPTIONS PRODUCT UPGRADE CHARGES SELLING VIRTUAL ITEMS SELLING ITEMS WITH MATCHING ONLINE VIRTUAL VERSIONS •access to content like online games or for a wide variety of other specialized information for a specified period •to move from the free version of something to the full version with better features •people pay for unlock codes which allow them to upgrade their online personas in games or other online simulations •e.g. Webkinz2: kids get an ordinary stuffed animal with a special code which allows them to go online and play with a digital version of their toy Note, that the ‘free business models’ are somewhat similar to those that exist in the open source community. Weber [05] outlines a number of possible business models for open source software - in accordance with Frank Hecker’s and Robert Young’s ‘Under the Radar’ [06]: Page | 10
  • 12. Jakub Růžička jameslittlerose@gmail.com SUPPORT SELLERS •package and distribute open source software on convenient media, and offer a set of technical support and customization services to users LOSS LEADERS •give away open source software as a way of generating demand and seeding a larger market for a linked commercial product 'SELL IT, FREE IT' MODEL •a company would first sell its software under traditional commercial terms and then, at some point later in the product life cycle, release the code as open source •that point would be reached when the benefits of an open source development process are believed to outweigh the proprietary licensing revenues •the open source product would then function as a loss leader for the next-generation commercial product. ACCESSORIZING •selling physical accessories that make it easier to use open source software SERVICE ENABLERS BRANDING •distribute and support open source software primarily to generate traffic to other revenue-generating services •the company owns the brand, not the source code, by retaining exclusive rights to its product trademark •if someone else wants to make a software product from the open source code, they can do so but they cannot label the new product with the 'brand name' (unless the branding company sells the right to do so, for example, by franchising) •the question of why customers would pay for a branded open source product is essentially the same question as why people pay for branded commodities in any part of the economy •the brand has a perceived value that often reflects some 'real' value (perhaps the branded product undergoes additional testing, perhaps the customer has increased confidence that the branding company will be around a few years later, or perhaps the brand is part of the 'experience' that the customer is willing to pay for in buying a product) Webkinz5 As Anderson [03] argues, the economist’s objection of hidden/opportunity costs is valid. However, we can’t directly (we actually can indirectly) measure the impact – therefore they are perceived as free. As Anderson puts it [03]: 5 ‘Webkinz’ are toy stuffed animals that have a playable online counterpart in ‘Webkinz World’. [Wikipedia] Page | 11
  • 13. Jakub Růžička jameslittlerose@gmail.com " What cannot be directly measured in economic systems is hand-waved away into a category called ‘externalities‘ (for example, when you buy a pair of shoes you are not charged for the environmental impact of the carbon released in their manufacture - that’s called a ‘negative externality,‘ which we’ll discuss at length below). A lot of the costs in that free lunch fall under the category of externalities - technically there, but immaterial to you. To demonstrate, let’s try to follow the money as you pay for reading a Wikipedia entry. The Wikipedia Foundation, which pays for the servers and bandwidth that Wikipedia runs on, is a nonprofit supported by donors, both corporate and individual. Assuming you are not one of those individual donors (and only a minute fraction of Wikipedia’s users are), perhaps you are a customer of one of Wikipedia’s corporate donors, such as Sun Microsystems. In that case, you may be paying a tiny fraction of a cent more for Sun servers than you would otherwise, to pad Sun’s profit margin enough that it can make a charitable donation. Not a Sun customer? Well, Google is a Wikipedia donor, too. Perhaps you once paid for a Google ad that was a zillionth of a cent more expensive than it otherwise would have been had Google not made the donation. Not an advertiser? Well, then maybe you bought a product from one of Google’s advertisers, and that product was a gazillionth of a cent more expensive because of this chain of events. At this point we’re talking about fractions of a cent that are like an atom in that penny. In other words, although you can probably argue that you are ultimately paying for that Wikipedia entry, it is only true in the sense that the flutter of a butterfly wing in China could influence your weather next week. Technically, there may be a connection, but it is too small to measure, and so we don’t bother. " [03] In the same consideration, we are not able to measure whether the revenues of a pop star would by higher or lower without music piracy – lower revenues from a record’s sales, vs. higher revenues from higher audience reach (revenues from concerts, merchandize, limited editions etc.). On the other hand, we can say that the value of music sharing (or any other virtual content) is zero. The fact is that virtual piracy can (usually) provide us with content in its original quality - as opposed to physical goods or humanmade action (e.g. providing a service). Therefore, as a result of the ongoing increases in processing, storage and bandwidth, information distributed via the digital network move in two directions [04]: CUSTOMIZED INFORMATION specific and tailored to your requirements will go up in marginal cost INFORMATION COMMODITY INFORMATION everybody gets the same version will go down in marginal cost The ‘young generation’ might not appreciate the values of the ‘old generation’ because these are in abundance. So they/we, naturally, search for scarcity values: free coffee at work vs. a coffee in a café Page | 12
  • 14. Jakub Růžička jameslittlerose@gmail.com across the street (possibly better-tasting & better-experience); free information on Wikipedia vs. premium information in the New York Times; free user account letting you use an application once a day vs. an unlimited premium account; and so on. [03] The existence of ‘free riders’ also does not seem to be a problem if we consider: 1) the cost of the virtual/online resource being consumed is not high enough to care about; 2) the effect of the Internet’s scale; 3) ‘passive’ and ‘free riding’ does not mean ‘without any effect’ (e.g. increased readership results in increased visibility). [03] On the other hand, ‘free may be the best price (reach the audience), but it can’t be the only one (covering expenses & having the means to provide high-quality content)’. [04] ‘Moreover, no discussion of free can avoid ‘The Tragedy of the Commons6.’ If we don’t have to pay for things, we tend to consume them to excess.’ [03] HUBSPOT‘S EMPLOYMENT OF INBOUND MARKETING & MARKETING TOOLS Naturally, HubSpot is not concerned just with the theoretical concept of ‘inbound‘ & teaching it, but it’s especially a practitioner of inbound marketing. The table below summarizes HubSpot’s inbound marketing strategy, as perceived by the author of this text: 6 In economics, the tragedy of the commons is the depletion of a shared resource by individuals, acting independently and rationally according to each one's self-interest, despite their understanding that depleting the common resource is contrary to the group's long-term best interests. [Wikipedia] ‘The classic tragedy of the commons example (which biologist Garrett Hardin used in a 1968 article) is sheep grazing on the commonly owned village green. Since sheep owners don’t have to pay for the land, they are not incentivized to preserve it. Indeed, it is even worse: Since they know that others are similarly able to waste the resource, they may choose to gain a bigger share of the benefit by wasting it faster, grazing more of their sheep, more of the time, until quickly the green is brown. This is the consequence of what economists call ‘uncompensated negative externalities.’ When things are actually scarce (limited) but we price them as if they were abundant (essentially unlimited), bad things can happen.’ [03] Page | 13
  • 15. Jakub Růžička jameslittlerose@gmail.com BEING RELEVANT TO NICHE AUDIENCE (ONLINE MARKETERS) PERSONALIZED (ON-DEMAND) •including website (by using user accounts) CONTENT PROVING EXPERTISE & EDUCATING AUDIENCE (BY PULL MARKETING) CONTENT MARKETING •study materials for free (see below) •providing download button access in return to user data collection •analysing data to provide more individualised content, which is assumed to result in a higher probability of conversion/purchase •teaching inbound using ebooks, videos, webinars, research & case studies FREE EDUCATIONAL CONTENT •HubSpot Academy •conferences CLOSE RELATIONS WITH TARGET AUDIENCE E-MAIL MARKETING •personalised e-mails providing free content and follow-up e-mails SOCIAL MEDIA INCREASING TRUST OPENNESS & FRANKNESS •explaining in detail business methods HubSpot employs ABOUT INTERNAL CORPORATE •blog PROCESSES ENDORSEMENTS OFFERING/SELLING SOLUTIONS/SOFTWARE HUBSPOT ITSELF IS USING FREE SOFTWARE TRIALS •customer testimonials •awards •e-mail / blogging / landing pages / calls-to-action / SEO / signals / social media / lead management / marketing automation / marketing analytics •& providing free tools such as twitter/website/marketing grader Page | 14
  • 16. Jakub Růžička jameslittlerose@gmail.com INBOUND MARKETING RESEARCH BY HUBSPOT Anually, HubSpot conducts a research among inbound marketing practitioners, which are helpful in discussing inbound marketing benefits, as well as challenges, assumptions & limitations. ‘The State of Inbound Marketing‘ 2009 report [11] is based on a survey issued by HubSpot in late 2008 (which makes it the very first of its kind). The survey was completed by 167 professionals involved or familiar with their business’ marketing strategy. These professionals included marketers, business owners, entrepreneurs, executives and salespeople in businesses of all sizes. 71% of these professionals worked in business-tobusiness companies and approximately one-quarter of those surveyed worked in the business or professional services sector. The State of Inbound Marketing offers readers three key findings7 [11]: Inbound marketing channels deliver a dramatically lower cost-per-sales lead than outbound channels. •Respondents that spent more than 50% of their marketing budget on inbound marketing consistently reported a lower cost-per-sales lead than those that spent 50% or more on outbound marketing. In fact, inbound marketing-dominated organizations experience a 61% lower cost-per-lead than outbound marketingdominated organizations. •Businesses are responding by allocating a greater portion of their budget to inbound marketing. Currently, 37% of business’ lead-generation budget is dedicated to inbound marketing, whereas 30% is dedicated to outbound marketing efforts. We expect this gap to widen significantly over time. Blogs lead other social media categories in terms of importance to business. •Blogs are frequently cited as the most useful type of social media marketing, with 75% of those familiar with their business’ blogging efforts saying they are ‘useful,’ ‘important,’ or ‘critical’ to their business. MySpace finished last in terms of importance of those that use the service for business purposes. Small businesses are most aggressively allocating lead generation budgets to blogging, social media and search engine optimization. •Realizing that inbound marketing techniques ‘level the playing field’ with the bigger budgets of larger competitors, small businesses are spending a 180% greater portion of their budgets on blogging/social media and 36% greater portion of their budgets on search engine optimization than businesses with 50 employees or more. If we compare the 2009 results with the current 2013 results, the key challenges in adopting inbound marketing become obvious [12]: 7 Please note that (naturally) the findings might be subject to various biases, as HubSpot itself is a creator, a promoter and a practitioner of inbound marketing. Page | 15
  • 17. Jakub Růžička jameslittlerose@gmail.com The biggest challenge is to convince the board to shift from traditional advertising to digital and online marketing. One-quarter of marketers report that their top challenge in 2013 is proving the ROI of their inbound marketing efforts. As we will see in the next chapter, the lack of reliable metrics for reporting ROI is a major obstacle for marketers. Only 18% of the marketers are focused on creating quality content. (II.) INBOUND MARKETING & HUBSPOT COMMENTS INBOUND MARKETING (GENERAL) DISCUSSION & LIMITATIONS is inbound for services only? free riders vs paying customers (wide reach needed) sustainability of the business model business growth (the long tail of marketing vs. 'mainstream') data collection & analysis do also customers need to change? (free riding only) COMMENTS ON HUBSPOT 490 global traffic rank in the early December 2013 (up 272 vs. the previous 3 months) [14] Both, ‘HubSpot’ & ‘inbound‘ search terms are growing in numbers since 2007 (HubSpot was founded in mid 2006). The interest seems to be highest in the US, Ireland, India, Canada, United Kingdom, Spain, Germany, Austria & Netherlands (i.e. expanding to other markets beyond U.S.). [15] Page | 16
  • 19. Jakub Růžička jameslittlerose@gmail.com regarding social media, HubSpot’s Facebook [16] & Twitter [17] fan/follower base is growing, increasing their potential reach & it's imporant to say that HubSpot‘s revenues seem to grow as well [18] Page | 18
  • 20. Jakub Růžička jameslittlerose@gmail.com HubSpot’s e-mails address (potential) customers by their name and/or by the company they work for HubSpot promotes its concept of ‘inbound’ as the next (& latest) stage in the development of marketing, positioning itself as a ‘revolutionist’ What I don't like HubSpot sends personalized (based on the data you provide them) ebooks on a regular basis HubSpot’s e-mails, e-books, conferences etc. are ‘signed’ by their employees the feeling that the company actually cares about you HubSpot sends its e-books to non-payers as well (in exchange for a couple of survey questions), which results in higher reach & general awareness about ‘inbound marketing‘ & communicating leadership in the category the company raises & promotes their employees as experts in the field and is positioning itself as the leader in online marketing (creating a knowledge gap of ‘inbound‘ & filling it with its services) • HubSpot’s CRM database doesn’t seem to 'grow with the customer'. It could be improved by distinguishing between less & more experienced customers (not sending ‘for dummies‘ e-books all the time). HubSpot has its own software profits go to them they invest it in new products development Page | 19
  • 21. Jakub Růžička jameslittlerose@gmail.com HubSpot as online fullservice & extending product portfolio – the list of services available at [19] smaller specialized competitors HubSpot‘s own ‘inbound‘ sector/category (specialize in it & extend it) becoming a ‘generic trademark‘ (regarding its blend with the ‘integrated marketing‘ general trend) PUSH marketing ‘calls to action‘ PULL (content) marketing no matter whether you buy or not + their own marketing research to recognize the needs & worries of online marketers Page | 20
  • 22. Jakub Růžička jameslittlerose@gmail.com INBOUND IN THE CZECH REPUBLIC ISSUES the necessity of having a solid strategic plan (/business model) when sharing free content (e.g. 'freemium') seems to be frequently omitted ...as well as the necessity of knowing what to measure & in which way your online (/social media) content pays off the necessity of sharing (useful) content relevant to a particular business with a relevant call to action in it Page | 21
  • 23. Jakub Růžička jameslittlerose@gmail.com LITERATURE [00] RŮŽIČKA, Jakub. HOW TO CREATE SELF-ENGAGED E-DU(ɔ): (Not only) Electronic and Online Copyleft (Lifelong) Education in the Age of Information, Availability, and Accessibility & Collaboration, SelfEngagement, and Flexibility. [Dissertation, Unpublished]. Charles University in Prague, Faculty of Social Sciences, Institute of Sociological Studies. Sociology Department. Supervisor: Mgr. Ing. Jiří Remr Ph.D., MBA. [01] SCHULTZ, Don E, Stanley I. TANNENBAUM and Robert F. LAUTERBORN. Integrated Marketing Communications. Lincolnwood, Illinois, USA: NTC Business Books, 1993, 218p. 2nd, illustrated. ISBN 0844233633; 9780844233635. [02] GODIN, Seth. Permission Marketing: Turning Strangers into Friends and Friends into Customers. 2012 edition. London, UK: Simon & Schuster, 1999, 256p. ISBN 1471105776; 9781471105777. [03] ANDERSON, Chris. Free: The Future of a Radical Price. 1st ed. New York: Hyperion, 2009, 288p. ISBN 14-013-2290-5; 9781401322908. [04] Summaries.com. FREE: The Future of a Radical Price. Chris Anderson. Hamilton, New Zealand: BusinessNews Publishing Ltd., 2009. [05] WEBER, Steve. The Success of Open Source. Cambridge, MA: Harvard University Press, 2004, 320 p. illustrated. ISBN 0-674-01292-5; 9780674012929. [06] YOUNG, Robert; ROHM, Wendy Goldman. Under the Radar: How Red Hat Changed the Software Business and Took Microsoft by Surprise. Scottsdale, Arizona: Coriolis, 1999. 197p. ISBN 15-761-0506-7. [07] SHERIDAN, Marcus. Inbound and Content Marketing Made Easy. The Sales Lion, 2012, 384p. [08] HALLIGAN, Brian and Dharmesh SHAH. Inbound marketing: Get found using Google, social media, and blogs. Hoboken, New Jersey, USA: Wiley, 2010, 256 s. ISBN 0470499311; 978-0470499313. [09] HANDLEY, Ann. CONTENT RULES: HOW TO CREATE KILLER BLOGS, PODCASTS, VIDEOS, EBOOKS, WEBINARS (AND MORE) THAT ENGAGE CUSTOMERS AND IGNITE YOUR BUSINESS. 2012, Hoboken, N.J: Wiley. ISBN 0470948728; 9780470948729. [10] KERPEN, Dave. 2011. LIKEABLE SOCIAL MEDIA: HOW TO DELIGHT YOUR CUSTOMERS, CREATE AN IRRESISTIBLE BRAND, AND BE GENERALLY AMAZING ON FACEBOOK (AND OTHER SOCIAL NETWORKS). New York: McGraw-Hill. ISBN 00-717-6950-1; 9780071769501. [11] HUBSPOT. The State of Inbound Marketing [online]. Cambridge, Massachusetts, USA: HubSpot, 2009 [Retrieved 2013-10-20]. http://bit.ly/GWkLat [12] HUBSPOT. 2013 State of Inbound Marketing [online]. Cambridge, Massachusetts, USA: HubSpot, 2013 [Retrieved 2013-10-20]. http://www.stateofinboundmarketing.com/ [13] ANDERSON, Chris. The Long Tail: Why the Future of Business is Selling Less of More. Hyperion Books, 2008, 288 p. Revised and Updated Edition (revised, illustrated). ISBN 1401309666; 9781401309664. Page | 22
  • 24. Jakub Růžička jameslittlerose@gmail.com [14] HubSpot.com. Alexa [online]. Alexa Internet, Inc., 2013 [Retrieved 2013-12-03]. http://bit.ly/18euK5i [15] Inbound Marketing & HubSpot. Google Trends [online]. Google, Inc, 2013 [Retrieved 2013-12-03]. http://bit.ly/1bdkIBC [16] HubSpot Facebook Page Statistics. SocialBakers [online]. 2013 [Retrieved 2014-1-03]. http://bit.ly/187PwWp [17] HubSpot Twitter Statistics. SocialBakers [online]. 2013 [Retrieved 2014-01-03]. http://bit.ly/1cWB1Cl [18] ALSPACH, Kyle. HubSpot ups revenue 82% to $53M in 2012, eyes 1-2 acquisitions this year. Boston Business Journal [online]. 2013 [Retrieved 2013-12-03]. http://bit.ly/19ePPK8 [19] Pricing. HubSpot [online]. HubSpot, Inc, 2013 [Retrieved 2013-12-03]. http://bit.ly/18q3sLU Page | 23