This post is part of Made @ HubSpot, an internal thought leadership series through which we draw lessons from experiments conducted by our own HubSpotters. Platforms are built into our daily lives, whether we realize it or not. Have you recently… ordered food from a service like GrubHub or made a reservation using OpenTable? Have you booked a ride with Lyft? Did you use your phone to check your email? All of these fluid interactions require systems to communicate with each other through open platforms. And at work? How many tools do you use to do your job? Do you spend a lot of time updating disparate systems, or do you use a stack of connected technologies to keep things current? If it’s the latter, you have a platform to thank for the time saved.
One platform allows tools, equipment, data and processes to be connected under one digital roof. It is the core of all systems and allows you to connect all your favorite tools seamlessly through integrations. An integration allows disparate systems to communicate with each other. When bringing tools together through integrations, a change made in System A is automatically carried over to System B. Taking advantage of platforms and integrations has not always been common. Two years ago, HubSpot Research found that 82% of salespeople and marketers were wasting up to an hour a day managing siled tools, a costly mistake. Today, employees recognize that integrating technologies to do their jobs is not an option but a requirement. Individual employees choose to connect their tools and, on average, leverage eight apps to do their job. Both employees and companies use connected applications. Okta found that they are small and medium customers (defined as companies with less than 2000 employees) average of 73 applications, 38% more than last year. While the largest customers (companies with more than 2,000 employees) take advantage of more than 130 applications, 68% more than last year. From personal life to work, platforms have become a staple in our daily lives. These platforms are well-oiled machines that initiate fluid connections between technologies. Today, consumers not only anticipate, but also expect their systems to connect, raising the bar for businesses to make it happen. But more tools shouldn’t mean more friction. At HubSpot, we want to help our clients connect their tools on our platform to reduce friction and grow better. Customers should have tools and solutions to solve their needs, regardless of whether HubSpot created them. Connecting tools enables consistent data, processes, and experiences. This year, we are experimenting with ways to expose integrations to our customers to increase adoption. However, as a platform scales, it becomes increasingly difficult for customers to navigate exhaustive lists of integrations and identify what is relevant to them. We recognized this at HubSpot and started experimenting with paid ads to see if this could be a valuable distribution channel for our customers.
Our experiment on paid integration ads
At the end of the fourth quarter, the Platform Marketing team decided to use some of the remaining budget to test a channel that we had not yet proven viable for integration adoption: paid ads. We presume that we could influence the adoption of an integration through paid ads. To test our hypothesis, we ran a retargeting campaign for three integrations on Facebook. Ads appeared in HubSpot’s retargetable audience. These ads featured three integrations created by HubSpot: Loose, WordPressand Eventbrite. We selected these integrations because they are natively built (created by HubSpot) and structured in a way that allowed us to measure multi-touch attribution. By leveraging Google Tag Manager in the in-app integration directory, custom UTM parameters, and funnel reports, we were able to measure every step from displaying the ad to installing the integration. Before launching the campaign, we tested our Google Analytics custom funnel reports by completing all actions, including installing the integrations to make sure they worked as designed. Before running the campaign, we made a conscious decision to divide our budget evenly among the three integration ads, regardless of whether one ad outperformed the others. We did this to minimize the variables of the experiment. Because we ran ads during November and December, we reduced spending from $ 130 per day to $ 5 per day during and around the holidays. We did this to “pause” the campaign on days when ads were lost in the noise, as this data could skew the overall results. Lastly, we determine our success metrics. Because we did not have apples-to-apples comparative data for the paid integration ads, we worked with our payment team to establish reasonably similar baseline data. While it wasn’t a direct comparison, we were curious to see how ads could influence multi-step actions. We evaluate our performance based on click-through rates (CTR), cost per click (CPC), and cost per acquisition.
Integration ads outperformed our benchmark data for click-through rate (CTR), cost-per-click (CPC), and cost-per-acquisition across the 7, 30, and 44-day marks, supporting our initial hypothesis and prediction. The 30-day CTR for our integration ads was higher than the 7 and 30-day CTR for the benchmark data, which is surprising as we expected the audience to tire more over time. Fatigue can be measured by how often a user sees the same ad. For example, in HubSpot, we look to see if a viewer has seen the same ad more than 2.5 times in 30 days, which we consider high. In addition, we were aware of an increasing cost per acquisition. The paid ads for these integrations were attractive to our retargeting audience and a legitimate point of purchase for HubSpot. It helped us influence the adoption of integrations, resulting in hundreds of installations on the featured technologies. It also provided us with a data point that we were curious to see: the cost of a facility. When considering the value and cost of ownership of a facility, it helps to understand the business impact. At HubSpot, our customers with built-in technology stacks tend to be more successful, and they stick around. This makes sense: the more apps installed, the greater the chance that someone will stick around. This is a common finding among platform companies. In a recent trip to san francisco HubSpot Vice President of Platform Ecosystem Scott Brinker found that “a common pattern across platforms is that the more applications a customer integrates into their system, the higher their retention rate, both for the platform and for embedded applications.” . Connecting their tools allows clients to access all their data in a central system while remaining flexible and adaptable to their needs as they grow. Since HubSpot does not currently charge integrators to be part of our ecosystem, spending money to power a new net install can seem counterintuitive. By weighing the long-term benefits of a facility against customer value and retention, we can determine what is a reasonable cost per facility. The cost of the experiment was worth it as it allowed us to gain a basic understanding of the cost per acquisition of an integration facility. Ultimately, you can determine whether the long-term value exceeds the initial cost. (While directional value is a good baseline, ideally looking for lifetime value [LTV] to set the actual value.)
What this means for HubSpot and you
Our experiment with paid ads exceeded our expectations and helped us reach a larger audience than we expected. It became clear that this was and is a viable channel for us to increase the adoption of integrations and better understand the cost per integration installation. Looking ahead, we could tweak who we target to see how it affects CTR. We could take advantage of enrichment software like Datanyze or Clearbit to see if users have tools and cross-reference installation data to create a list of people who use tools that we integrate with but have not yet connected. Alternatively, we could leverage this data to target a group of users going through onboarding to encourage them to connect existing tools to HubSpot. Additionally, we could look at the steps required to connect an integration and consider how we could reduce them to simplify the process for our users and potentially increase our CTR. Not a platform company? No problem. These retargeting campaigns can be leveraged to evaluate other valuable actions for your users, such as registrations, free trials, or event registration.