When it comes to modern marketing, there are two primary approaches that can be broadly categorized as “inbound” and “outbound” marketing. Inbound marketing is all about building a reputation, naturally attracting people to your brand and site, and using that traffic as fuel for conversions and revenue. Outbound marketing refers on a more traditional direct advertising approach, using mediums and messages to get people to buy a product directly.
Of course, there’s some overlap between these two approaches, but for the most part, they’re distinct. Inbound marketing generally includes things like content marketing, SEO, social media marketing, and online brand awareness building, but these strategies aren’t as commonly adopted as traditional advertising because there’s a perception that its overall ROI (return on investment) is too hard to measure, or is too low to be worthwhile.
On the contrary, inbound marketing actually tends to have a higher ROI than outbound advertising methods—even online approaches like native advertising. So why is this the case?
Native advertising relies on an innocuous appearance to disguise itself as advertising, but beneath that surface it’s a genuine, full-fledged ad. Savvy users who click on this type of material will feel tricked, as if they were lured into buying a product, and may not only avoid purchasing the product, but actively distrust the brand in the future. Of course, some people may appreciate the ad and buy the product anyway, but with organic inbound marketing, there’s virtually no risk of turning anybody away.
To the average modern web user, trust is one of the most important factors for making a final purchasing decision. If a user doesn’t trust a brand, he/she isn’t going to buy from it. For the most part, people are naturally distrustful of corporations and naturally distrustful of advertising—they realize that these are mechanisms of profit, driven to make money off of consumers. Organic inbound marketing strategies work against these stereotypes by presenting valuable information (or entertainment) to their users. Over time, this cultivates trust, and users will naturally be more likely to buy. Even consumers who don’t buy immediately will be more likely to speak highly of the brand to others, generating an atmosphere of trust and a higher reputation.
When it comes to online advertising, increased competition is making it harder to remain profitable. The most popular platforms for online advertising, like Google AdWords, are quickly ratcheting up in cost while offering more competition in the form of other advertisers. The less popular platforms, while cheaper, tend to offer fewer analytics tools, less traffic, and less benefit overall. The cost of native advertising slowly creeps up over time while offering similar returns (though the analytics tools and audience targeting abilities are admittedly getting more powerful). It could be argued that inbound marketing strategies like content marketing are seeing similarly increased rates of competition, but there are more avenues for differentiation available.
The best native advertising platforms are able to offer diverse and sophisticated means of audience targeting. For example, Facebook offers advertisers the ability to target individuals based on their age, gender, geographic location, and even their interests. However, there’s no guarantee that users within those demographics will be interested in your ad (or your product). If you display an ad to an uninterested user, that ad has completely gone to waste. On the other hand, content marketing gives you the opportunity to attract only people interested in a certain industry or a certain range of topics. Even if a reader finds your content interesting without formalizing a sale, there’s a chance that user will return and/or spread the message about your products.
Native advertising has one line to revenue; a user sees the ad, clicks the ad, and buys the product. Inbound marketing offers several possible channels for consumption. A user might know the brand name from their favorite blog, they might be a loyal reader, they might have seen one of your offers on social media, or they might have just found your site through a basic search. There’s a much wider funnel here, and as long as you have some means of conversion, you’re bound to get a decent return from multiple angles.
The greatest and clearest advantage organic inbound marketing has over native advertising is its ability to offer compounding returns. Your first few months of producing content, optimizing your site, and posting on social media may not return more than a few hundred visitors, but the more you invest in your strategy, the greater your returns will accelerate. You’ll accumulate more loyal readers, gradually grow your domain authority, attract more followers on social media, and before you know it, every new post you make will offer 10 times the value of one of your original posts. Native advertising always has a flat line of return, meaning over the course of several months, organic inbound marketing will always win out.
Even though inbound marketing does tend to have a higher ROI than native advertising, that doesn’t mean you should ignore native advertising altogether. It can still be profitable and beneficial for your brand (though it will aid some brands more than others). Be sure to consider the balance of your marketing strategies carefully, and always measure your own ROI—general trends don’t apply to every business, and you may find that what works for your business doesn’t exactly match the national average.
Want more information on content marketing? Head over to our comprehensive guide on content marketing here: The All-in-One Guide to Planning and Launching a Content Marketing Strategy.