A recently released report by Marketing Charts titled “State of Inbound Marketing Report” from HubSpot, reveals a growing trend of brands focusing their energy and funding on “inbound” marketing versus “outbound.”  Outbound techniques have long been employed and still constitute the majority of marketing techniques, but that is beginning to change.  Last year’s numbers indicated brands were beginning to rely more on inbound marketing techniques to generate leads; this year the outbound marketing budge­ts contracted further, closing the gap between the two opposing approaches.

What’s the Difference between Inbound and Outbound?

So what exactly constitutes an inbound approach versus an outbound approach?  And what techniques are brands turning to?  Essentially, an outbound approach is that where a marketer pushes his message out to the masses whereas an inbound approach is designed to pull in people who are already looking for your product or service.  HubSpot classified these techniques based on how important they were perceived by the company, and also allowed for multiple responses in order to account for brands that place value in more than one technique.  From their data, we see that popular and time-tested outbound techniques, such as direct mail and telemarketing, contracted 1% and 6% respectively, only generating 10% of leads each.  Trade shows remained flat at 10% importance among respondents, meaning outbound techniques are preferred by less than 1/3 of brands.

Meanwhile, inbound techniques have become increasingly important to brands.  Paid search and AdWords were the only inbound methods that fell in importance, now at 22%.  However, social media, company blogs, and SEO methods have all increased in importance to brands, with social media and SEO methods important to 60% and 59% of companies, respectively.  Company blogs were claimed to be important to 49% of the survey’s respondents.

Follow the Money, Inbound Marketing Budgets on the Rise

But let’s get down to the bottom-line: company budgets.  When asked whether budgets for inbound marketing strategies increased or decreased for the year 2010, 51% of respondents claimed their budget had increased, with an additional 37% claiming it had remained constant.  This means that 88% of American companies have maintained a healthy budget for inbound techniques, such as social media and SEO marketing strategies.  Furthermore, of the companies that claimed to have a lower budget for inbound marketing campaigns, 92% claimed that the economy, not performance, was the reason for the decrease.

Specifically, social media campaigns returned high confidence numbers from brands, with four in 10 companies overall acquiring customers from major social networks.  Businesses are increasingly placing their confidence in inbound marketing strategies, believing social media and SEO to be the two most important channels in gaining leads and bolstering their brand image.

It is no surprise that Internet Marketing will continue to grow and start taking additional budget dollars away from traditional marketing. It is surprising by how much the current market is expected to grow in size over the next few years. Check out this chart below. Overall Interactive budgets will soar to above $55 Billion. The Internet Marketing Agencies will continue to take business from traditional agencies as online begins to rule the advertising world.

According to our friends at Blogstorm and Forrester Research, a lot of companies are still not taking advantage of organic SEO. In fact, many companies spend 20 times as much on PPC over SEO even though SEO drives 75% of the traffic.  This will begin to change as more companies realize the benefits of organic SEO.

SEO drives 75%+ of all search traffic, yet garners less than 15% of marketing budgets for SEM campaigns. PPC receives less than 25% of all search traffic, yet earns 80%+ of SEM campaign budgets.