Download - Inbound for Agencies Report - 2014

INBOUND FOR AGENCIES

2014 Agency Report

Discover the latest trends in inbound marketing for agencies

HubSpot and Digital Doughnut Inbound Marketing Survey 2014

2014 Inbound Marketing

About The Authors

Michael is a Director at Digital Doughnut, leading content and community strategy. He joined New Media Age - the UK’s leading news publication covering business use of the internet - as Editor in 2002, and was Editor-in-Chief between 2007 and 2011. He is a media commentator and a regular speaker at interactive business conferences.

Michael Nutley, Director, Digital Doughnut

Lisa is the content strategist at HubSpot, Dublin. She is a member of the international marketing team, where she creates content for a global audience, drives traffic from outside the U.S., and generates leads for HubSpot. Lisa is also a regular contributor to the HubSpot blog where she writes about various topics across inbound marketing.

Lisa Toner, Content Marketer, HubSpot



Executive Summary

Inbound marketing continues to dominate discussions of online marketing. Advertisers increasingly recognise that online, traditional interruptive approaches are likely to alienate potential consumers rather than attract them. According to the US Content Marketing Institute recently, 70% of consumers would prefer getting to know a company through content rather than ads.

However, while much has been written about how marketers are using content and inbound marketing techniques, there is less information about the agencies that are supplying inbound marketing services. This survey was intended to fill that gap, looking at the adoption of inbound marketing by agencies, what inbound marketing services they are providing and how they expect their own businesses to develop.

HubSpot and Communitize set out to answer the following questions:

• What type of agencies are providing inbound marketing services?• How do they expect the sector to develop in the next year? • What industry sectors do their clients come from? • How effective is inbound marketing for them? • What barriers are there to its further adoption?

One of the things we found was that the vast majority of agencies have taken on inbound marketing; 83% of those who took part in the survey are billing for inbound marketing services.

Our research discovered that agencies expect inbound marketing to continue to grow, with 51% of those that responded saying they thought their clients would increase their inbound marketing activities next year, and another 25% saying their clients were thinking about starting to use inbound marketing. The biggest barrier to that growth is the lack of appropriate skills. Almost two-thirds of the agencies who took part in the survey said skills were a problem for their clients.



What Agencies Are Doing For Their Clients

The vast majority of the agencies that responded to the survey are providing some level of inbound marketing services to their clients. Only 10% said they weren’t active in the space. The main reasons given for not offering inbound marketing were that clients didn’t know what it was, didn’t want it, or couldn’t afford it. However, inbound marketing remains a small part of most agencies’ business. Nineteen percent said more than half their billings came from inbound marketing services.

The majority of respondents are adding inbound marketing to their existing services, rather than setting themselves up as inbound marketing specialists. More than half the agencies who took part in the survey (57%) said they were full service digital agencies. In answer to the question about which services they offered, at least half the respondents said they offered a combination of social media, web design, online advertising, email, SEO or PPC.

For agencies that are doing inbound marketing, the channels they use most are social media (used by 85% of respondents), SEO (73%), email (72%) and blogs (61%). This shows the diversity of channels and approaches that fall under the description “inbound marketing”. It also suggests different types of agencies, from full-service shops to specialists, are increasingly describing what they do in terms of inbound marketing.

The survey showed a distinct split among the types of companies buying inbound marketing services. Clients in business services dominated, with a third of agencies reporting most of their clients came from that sector. Next was the technology sector, a long way behind, with 15% of agencies saying that was where the majority of their clients came from. Sectors such as software, legal services and recruiting barely registered. This suggests that there is significant room for growth in the market as other sectors recognise the benefits of inbound marketing.

What portion of your billings is for inbound marketing activities?

0%

1% - 25%

25% - 50%

50% - 100%

Don’t know

10%

8%

19%

20%

44%



Which of the following channels are you using for inbound marketing?

Blogs

Email marketing

None

Other

Paid search

SEO/Website

Social media

61%

72%

5%

8%

53%

73%

85%

The survey also asked what clients were using inbound marketing to promote. Almost two-thirds of respondents (62%) replied they were trying to drive product enquiries. Almost half (47%) were promoting registrations to a service.

Meanwhile, the use of inbound marketing technology remains limited. Almost half of the agencies in the survey said they weren’t using a technology supplier, indicating the market still has a long way to go to reach maturity.

What are your clients promoting through inbound marketing?

Other

Product enquiries

Registrations to a service

Sign-ups for events

Surveys

We don’t promote through inbound marketing

Whitepaper & thought leadership reports

5%

62%

47%

44%

22%

6%

44%



The Growing Market For Inbound Marketing

Growth in inbound marketing activity looks set to continue next year, with half (51%) the agencies in the survey saying they expected their clients to do more. On top of that, a further quarter of agencies said they thought their clients would start using inbound marketing in the next 12 months. The research also suggests that inbound marketing will grow faster than marketing as a whole, with just under half the agencies in the survey (44%) saying they thought their clients would increase their marketing budgets in the next year.

How will your clients’ inbound marketing activities change in the next year?

Which of the following best describes how your clients’ marketing budgets will change over the next year?



However, there are barriers to further uptake. The respondents cited a lack of skills as the biggest single reason given by clients for not doing more inbound marketing, followed by lack of budget, difficulty in proving the business case and lack of central buy-in.

These last three factors suggest that although inbound marketing is increasingly popular, its credibility at senior levels is low. Lack of budget allocated for inbound marketing implies that the people holding the purse strings are not convinced enough of its value.

Proving the business case for inbound marketing was a challenge for many respondents. When asked whether inbound marketing had reduced the cost of acquiring leads, half said they didn’t know.

By using inbound marketing, have you reduced the cost of acquiring leads, and if so by how much?

What are the barriers to inbound marketing in your clients’ businesses?

Difficulty proving business case

IT owning website/landing pages

Lack of central buy-in

Lack of required skills/knowledge in the organisation

No allocated budget

No barriers

Other

Our clients don’t do inbound marketing

36%

25%

25%

60%

46%

9%

1%

6%

1% - 10%10% - 25%

25% - 50%

>50%

Not usedDon’t know

0%12%

2%

49% 10%

4%

5%

17%



Of course, reduced cost-per-lead isn’t the only way of measuring how effective inbound marketing is. In fact, only 35% of respondents said it was the most significant gain for their clients from inbound marketing. The most important benefits were “Increased volume of leads” (52%) and “Increased word-of-mouth” (49%), followed by “Better alignment of sales and marketing” (36%).

What do your clients gain most from inbound marketing?

This question of proving ROI was something the survey went into in more depth. It compared how agencies felt about their ability to show the return on investment to their clients, and how happy clients were with that ability. Only 17% said they were unhappy; that they really struggle to show the ROI on their activities to clients. The same small percentage said their clients were unhappy with the proof of ROI they were getting.

Better alignment of sales & marketing

Increased conversion rate

Increased volume of marketing

Increased word of mouth

Other

Reduced cost of identifying sales prospects

Reduced sales cycle

We don’t do inbound marketing

36%

52%

69%

49%

0%

26%

6%

5%

How happy are your customers with your ability to show them the ROI of your marketing activities?

How happy are you with your ability to show clients the ROI from your marketing activities?



So what’s going on here? We have the vast majority of agencies saying they - and their clients - are happy with the proof they’re delivering of the ROI from inbound marketing. But we also have half the respondents saying they can’t prove inbound marketing reduces their cost-per-lead, although only a third say that’s their most important metric. And we have issues around making the business case cited as three of the four most important barriers to increased investment in inbound marketing.

The most likely explanation is that the way the ROI of inbound marketing is being measured by agencies is good enough for their contacts within the clients’ marketing department, but not rigorous enough for more senior management; the people who decide budgets. If your main metric for your activity is “increased volume of leads”, that’s easy to measure, but it doesn’t link directly to the bottom line. Neither does “increased word-of-mouth”. What matters is how those leads or word-of-mouth convert.

In other words, it’s possible that inbound marketing is suffering from a similar problem to that faced by social media a few years ago. It’s easy to measure likes and friends, much harder to link those to business metrics such as increased sales or brand uplift. So a key challenge for agencies offering social media services was to provide metrics linked to business objectives. It seems likely that the same challenge now faces agencies offering inbound marketing.

Further evidence for this explanation comes from looking at the difference between agencies that back up their inbound marketing with technology and those that don’t. Two-thirds of respondents not using technology didn’t know if they were cutting their cost-per-lead, compared to 49% who were using inbound marketing technology.



The Future Of Agencies

When it came to thinking about the future of their businesses, agencies were generally optimistic. Four-fifths of respondents said they were either happy or very happy with the service they offered their clients. However, the vast majority (85%) also said they wanted to expand those services. This desire is due to customer demand; 76% of respondents said their customers were asking them for more services.

15%24%

76%

85%

Are your customers asking for more digital services from your agency?

Do you want to expand on the digital services your agency currently offers?

Following on from that, almost three-quarters of agencies said they were looking tohire more staff. Digital marketing specialists are in most demand, being sought after by 43% of agencies. The next highest recruitment targets are account managers (sought by 33% of agencies), sales staff (26%) and marketing specialists (23%).



What type of roles are you looking to fill?

Sales

PR

Other

Marketing Specialist

Director

Digital Marketing Specialist

Client Account Manager

27%

9%

13%

23%

10%

43%

33%

What are the biggest challenges your agency faces today?

Sales capabilities to close more dealsProving ROI of our client work

Hiring talent

Other

Lower number of retainers

Ability to offer more comprehensive services to clients

8%

12%

9%

5%

14%

16%

Lead flow for the business

15%

Cash flow is unpredictable

21%

However, when asked what they felt were the biggest challenges to their businesses, 14% of agencies listed hiring staff, ranking it fourth behind the unpredictability of cash flow (21%), proving ROI of client work (16%), and the flow of leads (15%).



Conclusions

The HubSpot Inbound Marketing Survey reveals a mixed picture. Overall, the mood is buoyant, with agencies expecting marketing budgets to continue rising as the world emerges from the post-crash era. They’re also seeing demand from clients for a greater range of services. However, within this optimism there is still concern among a significant proportion about the reliability of cash-flow, suggesting that not everyone is seeing the effects of the recovery. At the same time, traditional concerns such as the ability to find the right people continue to affect agency thinking.

Turning to inbound marketing, there are equally mixed signals. Agencies predict their clients will do more in the space, and certainly the relatively small number of industry sectors spending money on inbound suggests plenty of room for growth. At the same time, lack of understanding among clients of what inbound marketing is, and the problem of linking marketing metrics with business goals are clearly significant issues.

Technology has a clear role to play here. Agencies using inbound marketing platforms show significantly greater understanding of how much they’re cutting their cost-per-lead. Those that add the use of these platforms to greater efforts to educate their clients about inbound marketing have a significant opportunity to win a greater share of the growing inbound marketing sector.



About The Survey

Agencies represented in the survey ranged in scale from small businesses with up to five employees (29%) to those with more than 500 (8%), and from those with an annual revenue of up to £50,000 (8%) to those bringing in more than £1m a year (34%).

About HubSpot

HubSpot is the world’s #1 marketing software platform. We help more than 10,000 companies in 56 countries attract leads and convert them into customers. A pioneer in inbound marketing, HubSpot aims to help its customers make marketing that people actually love.

About Digital Doughnut

Digital Doughnut connects the global marketing community both on and offline. Members of the community gain access to skills and resources, the latest thinking on key marketing topics, crucial insights and best practice learnings that enable them to make better business decisions. Digital Doughnut both leverages and provides value to the community by tapping into the collective intelligence of the network to create high value content that’s based on actual market conditions and informed by practitioners’ experiences.

Download - Inbound for Agencies Report - 2014

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