Jan 31, 2023

Why Inbound Marketing is More Cost-Effective than Paid Advertising

How Inbound Marketing is More Cost-Effective than Paid Advertising

When you invest in a marketing strategy, you’re planning for it to pay off in your bottom line. While paid advertising can introduce you to new prospects who eventually become customers, it isn’t as cost-effective long term as inbound marketing.

Relying too heavily on paid ads can lead to hefty customer acquisition costs, which lower your profit margins on every sale from that marketing tactic. That’s not to say that paid ads have no place in marketing plans, but it does make the argument for investing in inbound marketing strategies.

Inbound marketing offers a solution for not only attracting new customers but retaining them and taking advantage of word-of-mouth advertising by turning existing customers into promoters.

So why do brands generally turn to paid advertising over an inbound marketing strategy? Inbound marketing is a long game, requires expertise and is more challenging to prove without the right analytics plans in place. If that sounds like your situation, here’s how to calculate the benefits of inbound marketing and where to turn for the necessary expertise.

Cost-effectiveness of Inbound Marketing

Inbound marketing involves slow, methodical steps that lead to long-term website traffic designed to build a conversion funnel. So how do the expenses related to inbound marketing compare to paid advertising? Here’s a look.

Paid Advertising vs. Inbound Marketing Cost Comparison

Paid ads require ongoing spending for the duration of a campaign. And once you turn off the ads, you won’t see new leads or sales. On average, you can expect to pay the following.

 

While you can’t discount the value of awareness you’re also building with every click, the cost per conversion for search ads might be too much based on the profit margins for your product or service.

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Inbound marketing has more expense at the front with ongoing lead generation benefits for as long as your company is in business. Calculating expenses for inbound marketing will vary based on the tactics that work best in your industry with your target audience. But generally, here are some of the expenses you can anticipate.

  • Website design, development and upgraded content $10,000-$75,000 depending on what’s needed (but for paid ads to convert effectively, you’d need this expense anyway)
  • Marketing automation software at approximately $200 per month
  • Content creation (blogs, social media) at $50-$100 per month
  • SEO expertise, which varies greatly but averages $2,000-$5,000 per month
  • Inbound marketing strategist, which would cost approximately $60,000-$90,000 per year to hire in-house

 

While the total cost of building an inbound marketing strategy requires upfront work, you’ll see continuous lead generation once you put the necessary pieces in place.

Studies show that inbound marketing costs 62 percent less per lead than outbound marketing, which includes paid advertising.

Long-term Benefits of Inbound Marketing vs. Paid Advertising

One of the largest inbound marketing benefits is that it not only focuses on customer acquisition but also on customer retention. Inbound marketing is also always on, and while you’ll have the ongoing expenses of marketing automation software and content creation, once you pass the initial phase of setting up landing pages designed for conversions, optimizing your website and understanding your target audience, the cost-effectiveness improves exponentially.

Plus, inbound marketing tends to offer customers what they need, when they need it. That leads to greater satisfaction and a higher likelihood that they’ll convert. Paid ads tend to be more self-serving for the company running them and less about what the customer is seeking solutions for.

By focusing on the entire customer lifecycle and not just customer acquisition, you can build stronger, more meaningful relationships with customers instead of just bringing them in through one ad campaign.

Finding Inbound Marketing Expertise

As you review the costs associated with inbound marketing, you’ll see that one of the largest expenses is experienced personnel for the inbound marketing strategy and SEO. But the right expertise is also one of the most important elements of building a successful inbound marketing strategy.

Diaz & Cooper offers a team of experts who will advise you on what you need to do to prepare for attracting prospects, engaging them with content, and delighting them with your products and services through meaningful interactions throughout the customer buying journey. Schedule your free consultation now to learn more about how Diaz & Cooper’s services create cost-effective inbound marketing strategies.

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