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HubShout adds staff, forecasts sales to rise

Rochester Business Journal
November 1, 2013

HubShout LLC, an online marketing company, is on the fast track to growth. It has expanded its workforce and expects to reach $4 million in revenues this year, up from $2.5 million in 2012.
 
Partners Chad Hill and Adam Stetzer founded the company in 2008 in Arlington, Va., opening a branch in Rochester in 2009.
 
The company employs 40 people-five in Arlington and 35 in Rochester. This year it has added 10 employees, and it hopes to add at least 10 more to the Rochester branch in 2014. The local office is on the east side near Culver Road and University Avenue.
 
"2008 was not the best year to start a company," said Hill, the firm's Virginia-based CEO. "We were very fortunate, I think, that we've grown through a fairly significant recession. I think we've done some smart things about building the company and finding very efficient ways to do things."
 
The company provides software and services. Its target market is small Web agencies that serve companies with less than $10 million in revenue.
 
HubShout offers search engine optimization and local SEO, pay-per-click programs, email marketing, social media campaigns, website design and monitoring of online reviews.
 
One reason for its growth has been distributorships. HubShout is other companies' outsourced provider of marketing services through "white labeling," in which a product or service produced by one firm is rebranded by another to look as if the second company made it.
 
HubShout provides marketing services to companies that then offer those services to their clients without crediting HubShout. National brand recognition is not important to the marketing firm. As its 400 distributing partners grow, HubShout gains in clients as well.
 
"This industry is growing. More dollars are coming out of Yellow Pages, they're coming out of traditional advertising mechanisms because the online market is growing," Hill said. "It's where people are every day: They're in Google, they're (on) Facebook, Twitter, you name it. Advertisers, whether they're big national companies or small local businesses, all want to go where their customers are."
 
In the first six months of 2013, national Internet advertising revenue increased 18 percent. Total revenues reached $20.1 billion, up from $17 billion in 2012, says a report by the Interactive Advertising Bureau. The report focused on data reflecting online advertising revenues from websites, commercial online services, ad networks and exchanges, mobile devices, and email providers, as well as other companies selling online advertising.
 
The combination of service and software and a blending of traditional marketing strategies with digitalization have helped HubShout continue to grow.
 
"That we're a mix of software and service is somewhat unique," said Adam Stetzer, HubShout president and a Rochester native. "There are software packages that are more unique because all they do is software, but we find sometimes you pay almost as much per month for their software as you do for our entire service. Our value proposition is quite a differentiator."
 
Nearly 95 percent of HubShout's 1,000 small-business clients serviced through distributors are in the United States. Less than 3 percent of its business is in Rochester. The company also has clients in Australia, Ireland, Hong Kong and the United Kingdom.
 
HubShout competes with outsourced marketing agencies in the Philippines and India, a selling point to potential clients who want to keep their business in the United States.
 
"If you think about (it), we are a back-office marketing shop, so we work through these distributors," Stetzer said. "When people go to outsource, they often look overseas because they're looking for the cheapest possible option, and we've been fairly successful at competing with the Philippines and India based out of Rochester. We're bringing call-center jobs back."
 
Marketing strategies for small businesses have changed rapidly, and with tighter budgets HubShout can provide updated options.
 
Businesses can pick what forms of marketing they would like to incorporate into their business plans, ranging from social media to email marketing.
 
As a small business, one way HubShout gains a customer's trust is by testing digital marketing options on its own before recommending them to clients.
 
"As we start to see the benefits of different activities that we're (using)," Hill said, "that's when we start to say: 'This is actually starting to look like a product that we can offer to our clients. Let's take this, package it up and build it in or create a new service that we can sell to our clients.'"
 
For marketing in any form, businesses have to find where potential customers are.
 
"(Customers) all know the Yellow Pages is dying or dead-that's where they used to be, and they know that's not working anymore," Stetzer said. "They're hunting for where to put that money to keep growing their businesses."
 
Hill added: "We know they have limited attention (and) limited budget, so our goal is you want to make sure (we) pick the things that are going to have the biggest impact."
 
Getting businesses to think about marketing strategies in new ways is one of the company's goals.
 
"Fifteen years ago, a small business had a few options in their marketing toolbox," Hill said. "The playbook was relatively simple. ... It's so fragmented now that they have to really think about (it), but it's really overwhelming for a small business."
 
To stay up-to-date on marketing tactics, the company has a team of employees focused on the future, officials said. Being innovative with small businesses is a balancing act between budgets and efficiency.
 
"We are not on the bleeding edge of things because the small business, or our typical customer, doesn't have the dollars to put into the bleeding edge," Hill said. "The minute the next Twitter is out, we're not recommending to our customers to go there, because there's not much of an audience. We're waiting for those new things to bubble up and to be able to show that there is some return on investment for being there."

11/1/13 (c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


 


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