We are all living the marketing high life. Today, great inbound marketers can transform their business thanks to "free" traffic and leads from social media and search engines. Sure, this traffic isn't exactly free -- marketers have to invest in time and tools to take advantage of these inbound channels. But inbound leads are still 61 percent less expensive than outbound leads.
Can This Last Forever?
This week, interesting monetization news broke about Pinterest, the hot new social network focused on images. Pinterest is using a service called Skimlinks for its monetization. Skimlinks takes the URLs that people pin on Pinterest and attaches affiliate marketing referral codes to them, which allows Pinterest to get paid when a person discovers a product on the service and then visits a website to purchase that product. (Note: Understand that only ecommerce websites that have an affiliate marketing program pay Pinterest for conversions. If you don't have an affiliate marketing program, then traffic from Pinterest to your site is free.)
However, if you do have an affiliate marketing program, then you have to invest the time in building a community and sharing content on Pinterest, and still pay your affiliate marketing commission. But if you have a well optimized affiliate marketing campaign and you understand your target cost-per-conversion, then this can be a sustainable model for selling products. While potentially a good model, it is also extremely disruptive to the idea that social media traffic is free.
Social Media Capitalism
Social media is still very much in its infancy. In the early days of Facebook and Twitter, there were no monetization methods in place. Pinterest marks a shift in the social media industry, not for its innovative platform, but instead for its ability to monetize the service from the very beginning, rather than waiting years to figure out how to actually make money from it. We've seen LinkedIn succeed in monetizing by disrupting the recruiting market. Now, Facebook and Twitter both have strong and growing advertising platforms. However, what Pinterest is doing isn't advertising. Instead, Pinterest is making money off organic interactions on its site, and some marketers can only opt out of paying for it if they cancel their entire affiliate marketing program.
As Facebook prepares for its initial public offering and LinkedIn continues to battle the pressure of Wall Street, the only real certainty is that social media capitalism is here to stay. It's all about leverage. The handful of successful social platforms that attract a critical mass of users that business want to reach have the leverage to make more aggressive monetization changes. The fact is, with the higher costs involved with offline marketing, social networks can make significant changes without pushing businesses away from the platform.
Only the Platforms You Own Will Always Be Free
So social media is starting to get more expensive. Yes, it is still far less expensive than many other forms of marketing, but what is a marketer to do? Take control. The only online platforms that you can ensure will remain free in your marketing mix are the ones you own and control yourself. Facebook could decide tomorrow that it wants you to pay a monthly fee to have a business page. While unlikely, it is completely possible.
As marketer, you own your website and your blog. Failing to invest in both of these key inbound marketing assets could have a negative impact on your future cost-per-lead. This means that those Inc. 500 companies that indicated they were blogging less in a recent survey are heading in the wrong direction.
You dictate all the terms of your blog and website -- not only the content but also the design and call-to-action placement. Your website and blog are also the only inbound marketing tools through which you have complete control over accessing valuable marketing analytics information. Think about the limited insight you have now into the analytics of your social media channels. When it comes to third-party channels, you have no control over the data that you have access to. It's all up to those third-party channels to decide what to give you.
Making Money Costs Money
Yes, marketing has defined cost structures in every tactic, both outbound and inbound. But great marketers understand that it's important to invest in marketing to drive revenue growth. The important aspect of social media and marketing costs to understand is that social media costs are volatile. Social media moves quickly, and companies are forced to innovate rapidly. With this innovation comes new opportunities for monetization, which directly impacts marketers. Owning and leveraging your website and blog as the central hub of your inbound marketing activities will help to minimize volatility and manage your inbound marketing costs.
Three Key Marketing Actions to Reduce Marketing Costs
1. Optimize Website Calls-to-Action for Your Entire Buying Cycle - Marketers underuse calls-to-action. The web is crowded, and visitors to your website or blog need clear direction for what you want them to do. But just having calls-to-action on your website isn't enough. Instead, your calls-to-actions must map through your entire buying cycle. For example, if your blog generates a lot of traffic from first-time visitors, then asking them to join you for a product demo probably isn't the best pick-up line. That type middle-of-the-funnel call-to-action would likely work much better on your product pages, where more qualified site traffic is likely to hang out. Conduct an audit of your calls-to-action to determine how to better map them to your sales cycle.
2. Create Blog Content Prospects Love - Stop talking about your products. No one cares about your products ... yet. Instead, you need to create blog content that solves key problems your prospects and leads face. Once this content brings them into your blog via social media and search, you then have the opportunity to begin to share more product-focused information. Think like a trade publication, and create articles that you or a member of your company would proudly read and share with others.
3. Make Analytics Actionable - Looking at visits isn't enough. You need to work on making your analytics actionable. This means you need to look at key inbound marketing metrics like conversion rates by traffic source as well as compare these rates to benchmarks for your industry. This benchmark data will allow you to decide which channels or types of content to invest more in to improve lead and customer yields for your business. If you're a HubSpot customer, you can use HubSpot's marketing analytics tools to analyze which channels are driving traffic, leads, and customers, and compare metrics with competitors in your industry.
How do you feel about the growing impact of social media capitalism?
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