0 HubSpot Releases Social Inbox and Reveals So Much More

I spent yesterday afternoon at HubSpot’s “Open House” in Cambridge, MA, during which they briefed the community on their business progress, introduced their new Social Inbox, described their  approach to marketing and sales alignment, explained their “culture code”, and answered questions.

The most concrete news, Social Inbox, extends existing HubSpot features by more fully integrating social media monitoring and response with the HubSpot interface. The Social Inbox presents a list of Twiter posts by user-specified individuals or containing specified key words. Users can drill into each post to see a complete profile of the poster. The big deal in HubSpot’s eyes is the profiles include all information the HubSpot database about each person, and are even color-coded with the sales lead stage. The data includes Web and email behavior captured directly in HubSpot, data imported from Salesforce.com, and whatever else the system has available. Users can respond directly, forward a post to someone else, or add the poster to a HubSpot campaign. The system can automatically alert users to new Tweets as they happen or on a regular schedule.

HubSpot said they couldn’t find any other product that combines this type of social monitoring with access to such deep profiles. I can’t immediately think of one either, although it might exist. Either way, uniqueness is less important than the value provided, which is considerable.

What’s ultimately more interesting, however, is that Social Inbox is aimed at managing one-on-one interactions between users and individual contacts.  This sort of contact management is quite different from HubSpot’s traditional focus on attracting inbound traffic or even from conventional marketing automation.

The new features came up again later in the day, when the audience asked several pointed questions about whether HubSpot would eventually add a full CRM capability. This caused by far the most discomfort of any topic addressed by a management team which provides itself on transparency. Answers ranged from a coy “we think about a lot of things” to a fairly definitive stream of conscious listing of the arguments against adding CRM.  The currently dominant line of thought seems to be that HubSpot already provides adequate features for clients who want light contact management, while adding full CRM features would only lead to a losing battle with Salesforce.com. Unstated but hovering in the background was the fact that Salesforce.com is an investor in HubSpot and might some day consider buying them to expand its own marketing scope. CRM would make HubSpot less attractive to Salesforce, since it would create a set of redundant features that need to be supported or removed.

But the most fundamental reason that HubSpot management seems genuinely disinclined to add CRM is that they see HubSpot’s mission as transforming marketing. There’s a distinctly messianic gleam in CEO Brian Halligan’s eyes when he says this and the vision is no doubt shared widely across the company. In fact, it’s arguably more surprising that HubSpot has overcome its marketing focus to introduce the contact management features already in place. My take is that customer needs – another HubSpot mantra – have driven the system in this direction despite management reluctance. The system has a will of its own.

Admittedly, I’ve been arguing this for a long time: the need for integrated customer treatments will eventually lead marketing automation, CRM, and Web content management to become a single system, or at least to share a common customer database. HubSpot’s current vision of highly personalized data-driven marketing is consistent with this. The current vision is also quite different from the original HubSpot vision of attracting traffic through huge volumes of great (but not personalized) content. But the new vision is a logical extension of the original: once you’ve attracted people and start to learn their preferences, the more you’re able to make targeted content recommendations. And, the more content you have available, the more you need those recommendation to point people at the right materials.

This brings HubSpot right back to contact management, because the same data used to recommend marketing content can, and should, be used to recommend treatments during personal interactions. It’s possible to simply push recommendations to an external CRM platform, but setting a connection for each point of contact quickly becomes a lot of work. The temptation to eliminate that work by building an integrated CRM system is hard to resist.  As I say, the system has a will of its own.

Incidentally, there is another way to look at this. The traditional view sees marketing as making automated contacts, while sales and service use human agents, supported by CRM, for individual interactions. This is why CRM seems foreign to a marketing system. But the automated-vs-human division is no longer so clear cut. Social media marketing is mostly done by humans through one-on-one messages, while many sales and service interactions are automated. In this view, HubSpot needs contact management features even if it rigorously restricts itself to serving marketers alone.

The problem with this approach is that it denies sales and service the benefit of HubSpot’s data and customer understanding – a terrible waste of corporate resources. So this view also pushes HubSpot towards a unified marketing and CRM system, or at least a database and recommendation engine that’s accessible by both HubSpot and a separate CRM. I swear I didn’t mean to end up here, but this does lead to the Customer Data Platform I’ve been discussing over the past few weeks. I don’t think HubSpot management wants to move in that direction, or even that they necessarily should.  But these things have a will of their own.

0 Why Social Media Really Matters

Summary: marketing has shifted steadily over time from passive to active consumer engagement. Social media is the latest stage in this evolution. Marketers need to master new skills at each stage; as they do, advertising budgets will shift to take advantage of the new medium's increased effectiveness.

Of all that research I mentioned last week, two pairs of facts stood out. One was the disparity between the time people spend on online activities (20% to 30% of total media time) and the share of advertising expenditures spent online (10% to 15%). Although some difference may be justified by the differences in media effectiveness, this still suggests to me that ad spending will continue to shift into online media until the spending is roughly proportional.

The other disparity was that search accounts for 5% of online time but 60% of online ad spending. Some of this may be due to the fact that it’s much easier to buy search advertising (think Google AdWords) than other types of online ads. But I think the primary reason is that search serves as a gateway to other Internet activity—so marketers wishing to drive traffic to their own Web sites need search advertising to make this happen.

The final, related factoid is that social media have grown from virtually nothing to nearly 20% of online time over the past few years. This matters because social media are an alternative gateway to finding Web content: instead of doing a search, I can ask my online community for information or recommendations. Thus, social media present a major threat to search advertising revenues. Although social media currently gather under 3% of online advertising, this will surely change as marketers work to find ways to exploit its potential. If you’ve been wondering why Google should be concerned about Twitter and Facebook, that’s your answer.

These shifts from offline to online advertising and from search to social media suggest a progression through four stages:

1. mass media, or broadcasting: this began in the late 19th century with the emergence of national brands and national print media. Today it is represented primarily by television. You can date TV-dominated era from, say, 1950 to 1985.

2. database marketing, or, more poetically, narrowcasting. This is about direct contact with segmented groups of customers. Date it from 1985 to 1997.

3. search marketing. This is characterized by use of search engines to drive traffic to Web sites. I’m being arbitrary but let's date it from 1998 to 2007.

4. social marketing. This is use of social media to connect with consumers. I’ll date it from 2008, although effective marketing uses of social media are just starting to emerge.

As each new medium has emerged over years, some portion of advertising dollars has shifted from the preexisting media. Of course, the old media don’t go away completely. Indeed, traditional mass media (including radio and print as well as TV) still account for the largest share of advertising spend.

The four media differ along several dimensions. These include:

- consumer engagement. Broadcast is the most passive medium; essentially, it’s yelling at people who may or may not be interested in the message. The audience in database marketing is still passive, but it's targeted at segments that marketers have some reason to believe are interested. With search marketing, the consumer takes a somewhat active role in deciding what to look for, even though the ads themselves are still placed by marketers. With social marketing, control is directly in the hands of consumers, who decide which messages they will receive.

- authority. I find this an intriguing concept. Basically it has to do with how consumers decide which messages they should believe. In the mass media, authority is essentially conferred – people believe things because they are "seen on TV" or have the "Good Housekeeping Seal of Approval". With database marketing, the medium (typically direct mail, more recently email or telephone) doesn’t itself confer much authority, so the message itself must command attention because it’s relevant to the consumer’s needs of the moment. This relevance motivates the recipient to actively explore the marketing offer and assess whether its source is credible.

In search marketing, the source of authority is implicitly based on the group itself: Google PageRank is largely determined by the number of links to a Web site – a version of “wisdom of the crowd”. With social marketing, group-based authority is explicit: consumers can see the number of followers, recommendations, reviews and other ratings provided by group members and decide whether to trust them.

- post-sale relationship. This defines the relationship between the marketer and consumer after the initial purchase. In the mass media world, the relationship barely exists: customers use the product and, hopefully, like it enough to buy it again. At most they ask for service if there’s a problem. With database marketing, post-sales contacts become important for cross-sell, upsell and retention. Indeed, this is where database marketing truly shines because it’s where rich data is available for targeting and relationship building.

Search marketing reaches a new level of engagement because customers can interact directly with the company Web site. This lets them initiate transactions, send messages, and in some cases actually change product configurations such as setting telephone features. With social marketing, consumers take direct control, initiating engagement themselves and, even more important, publicly sharing their engagements with other community members.

- marketing focus. This shows the critical task that marketers must master. With mass media, the primary marketing goal is selecting a message that builds a successful brand. For database marketers, the key skill is effective segmentation. Search marketing is primarily focused on developing content, both to attract traffic via organic search and to meet consumer needs once they appear at the site. For social marketing, the ultimate goal is convincing consumers to become brand advocates. Content is still important, of course, but its nature shifts from information that visitors consume to tools like widgets that empower them to share their enthusiasm with others.

The following table summarizes these dimensions.

medium	consumer engagement	authority	post-sale relationship	marketing focus
mass media (broadcasting)	passively exposed	conferred	service / support	brand message
database marketing (narrowcasting)	targeted	relevance-based	cross sell / upsell / retention	segmentation
search marketing	activity-triggered	implicit group	Web self-service	content
social marketing	consumer-controlled	explicit group	public engagement	empowerment

At the risk of stating the obvious, the table shows a steady increase in consumer empowerment from the passive receipt of mass marketing message to active control in social media. Because this is a fundamental change from traditional mass media marketing, it has several important implications:

- for each new medium, marketers must learn new skills.

- as marketers learn new skills, they will use the new medium more effectively.

- as marketers use the new medium more effectively, it will receive increasing portions of their ad budgets.

- since social media is very new, its share of advertising budgets will continue to grow for some time.

In short, social media matters not because it's cool, but because it offers marketers a new and more effective way to reach their consumers. Marketers who fail to master the required skills will fall behind marketers who do.