“The subscription software business model is really a great business model,” said HubSpot CMO Kipp Bodnar. “You’ve got predictable revenue, you’ve got great gross margins — the biggest challenge is just distribution of the product. How do you get it out there, how do you make people aware of it?”
That’s where publishers come in, of course, but their business model, said Bodnar, runs at much thinner margins. “It just seems like there’s going to be a convergence, where if you’re a software company you’re going to need to have real, credible creators and media skills in your company. For us, we have to make big investments here if we’re to achieve our mission, which is to make millions of businesses and people grow better.”
The traditional marketing model of heavy advertising plus some blog posts won’t work any more, he said. “We’re going to have to be where people are at all times.”
A media business within a software business
All of which provides a simple explanation for some of the moves HubSpot has made this year, like acquiring the media brand The Hustle, with its hugely popular newsletter, in February, and launching the HubSpot Podcast Network in May. Bodnar was keen to explain that these initiatives form part of a broader strategy to invest in solid content across a range of channels.
This builds on HubSpot’s existing reputation for blog-based content, which has long been much more than just a vehicle for promoting HubSpot. “The HubSpot blog strategy was straightforward,” said Bodnar (he should know, he used to write it). “You would create content and people would find you through search engines. That leads you to create evergreen, long-lasting content. That’s a great strategy, but you’re really only finding people who are coming to you to solve a problem. But we want to inspire people and be a regular part of their day, so we have to live across the channels and formats they engage with regularly.”
Hence the move from text (blogging) to email newsletters, YouTube and other media formats. There seems to be a small step from developing content to build brand awareness to developing content to monetize the content itself — becoming, in effect a media business as much as a software business.
HubSpot is its own media buyer
But that overlooks one important point. “If you think of a traditional media organization, they’ve got a business side running ad sales and all the operations around that. We do the same thing, but we’re our only customer. We still have ad operations, but there’s one advertiser and that’s us.” In addition, when buying space from a third-party publisher, the publisher itself puts limits on the type and volume of inventory.
“You have 30 second for an audio spot, or these dimensions for an ad. You’re limited to that. When you own the property, you can change the shape of the box however it suits you. There’s an opportunity to tell more compelling stories, because you can integrate the ad message with the native content in way that’s harder to do when you’re renting part of some space from someone.”
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Sourcing independent voices
Although HubSpot is the sole sponsor, advertiser and host on these channels, the creators should be viewed as independent voices, Bodnar said. “The way we think about it, it’s authentic stories and it’s also value — how do I provide the most value for this audience? That’s how we build trust, which is the foundation for all of this.”
HubSpot is not just providing a platform for podcasters, but is prepared to invest in them. “We have a lot of resources available to them,” said Bodnar, “so that they can not just run HubSpot ads in their podcasts, but build a big, meaningful audience long-term, and get a ton of value from being part of the network.”
That’s an opportunity that holds obvious appeal for creators. We spoke with Mike Rizzo, not only a certified HubSpot user, but founder of the MO Pros community and host of the Ops Cast podcast. “Ops Cast is about bringing great information to the audience of marketing operations professionals. The HubSpot brand is strong and if we were able to leverage that strength to improve our ability to help (notice I don’t say ‘reach’) more MO Pros, I would be all for it. What they are doing for the podcast world — specifically as it relates to martech is impressive and I’m excited to see how it impacts the landscape.”
Content and Community
The Hustle acquisition reflects the intention to engage with an audience wherever it is. “There will be new products coming out in the future, but right now you’ve got the core daily newsletter, you have the My First Million podcast which is a key part of our podcast network, and the third part is a community called Trends. Trends is a paid community where you get access to exclusive content and interact with community members.”
For the time being, HubSpot will rely on its creator partners and the content generated by their communities for a foothold in social media. Building a social network from the ground up, Bodnar observerd, presents formidable challenges. “We haven’t found the right opportunity their yet to build or partner. That doesn’t mean we’re not going to in the future. We talk about it all the time, but we haven’t found the right fit and strategy yet.”
Just getting started
“Personally, I think HubSpot creating a media arm to continue building original content is a natural evolution of their inbound marketing methodology,” commented Rizzo. “They literally wrote the book on creating valuable content to drive brand awareness. To me, it’s just HubSpot’s way of further extending the meaning behind inbound and how HubSpot drives that mission.”
“This is 100% the beginning of a journey,” said Bodnar. “This is very early days. I think you’ll see a lot more from us over the rest of this year and into next year.”
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