Advertising

Demand Generation vs Lead Generation: What’s the Difference?

Demand Generation vs Lead Generation: What’s the Difference?

9 Min Read

Most of today’s marketers build campaigns around attracting customers into the store. Since buyers are more informed than ever, it’s important to use the right strategy to stand out from the competition, build brand awareness, and convert new customers.

Demand generation and lead generation are two of the ways your business can attract new customers, each with its own end goal. To successfully execute these marketing tactics, it’s important to know the difference between demand gen and lead gen, and how you can use them to grow your business.

What is Demand Generation? 

Demand generation marketing encompasses a comprehensive approach that aims to increase brand awareness and nurture interest in a company’s products or services over time.

This strategy involves systematic efforts to attract and engage potential customers, creating a robust pipeline of leads through omnichannel marketing campaigns. The ultimate goal of demand generation is not only to spark initial interest but also to sustain it, converting awareness into loyalty and ongoing business growth.

Demand Generation Benefits

Demand generation, at its core, is designed to guide potential customers through the sales funnel. Here are the top five benefits of demand generation that advertisers need to know:

  • Enhanced Brand Awareness: Demand generation strategies help increase the visibility and recognition of a brand among potential customers by using targeted marketing campaigns that educate and inform audiences about the company’s products or services.
  • Consistent Lead Pipeline: By nurturing prospects over time, demand generation creates a steady flow of qualified leads who have shown interest in the brand, ensuring a consistent pipeline that fuels sales efforts.
  • Improved Customer Engagement: This approach leverages personalized content and interactions that resonate with potential customers, fostering stronger relationships and deeper engagement, which can lead to higher conversion rates.
  • Higher Marketing ROI: Demand generation focuses on targeted marketing efforts and analytics-driven strategies, which lead to more efficient use of resources and better returns on marketing investments.
  • Long-Term Customer Relationships: Through continuous engagement and nurturing, demand generation helps build long-lasting relationships with customers, increasing customer loyalty and lifetime value by keeping them connected and interested in the brand over time.

Demand Generation Strategies

A solid demand generation strategy is all about creating a need for your product or service and setting yourself up as the best solution. You can use different demand gen tools to accomplish your brand awareness goals. 

  • Content marketing: Content marketing is a common demand generation tactic because it helps boost your search engine ranking and answers potential questions about your business. Using content including videos, blog posts, and social media helps boost your brand and establishes you as a credible solution to customer problems and pain points. 
  • Social media engagement: Social media lets you connect with potential customers and learn more about their needs. Go beyond your followers by looking for keywords in your field. You can offer advice to people looking for your expertise and join in on industry-related discussions to increase brand awareness
  • Webinars: Webinars are an excellent way for you to build your authority in your field. If you have unique and helpful knowledge, share it through a webinar and encourage others to share your invitation. Focus your webinar on specific problems you can solve to create awareness about how you can help potential customers. 
  • Pay-per-click (PPC) advertising: Since pay-per-click advertising puts you at the top of the searches, it’s great for building brand awareness. When creating PPC ads for demand generation, think of the keywords buyers may use when looking for a solution to their problems. Structure your headings and ad copy around these keywords so the right people can find you online. 
  • Free resources: Offering tools like product guides or hosting live chats in which people can ask questions helps you build your brand and offer something of value to people who aren’t fully aware of what you answer. These resources don’t have to be sales pitches. You could celebrate a previous client with a case study or video about their success. 
  • Website analytics: Your analytics is a valuable tool because you can see what people are searching for when they find your site, and you can analyze how they’re interacting with various pages. These insights can help you identify content preferences you can use to run demand generation campaigns that draw people to your website.

What is Lead Generation? 

Lead generation is a crucial aspect of performance marketing that focuses on attracting and converting potential customers into leads by capturing their information through various marketing initiatives.

This process involves targeting specific audience segments with strategic campaigns that encourage them to submit their details in exchange for valuable offerings like newsletters, trial subscriptions, or white papers. By efficiently leveraging performance marketing techniques, businesses can optimize their lead generation efforts, ensuring a steady stream of prospects ready to be nurtured into paying customers.

Lead Generation Benefits

Lead generation allows potential customers a direct pathway to increased sales engagement. Here are the top five benefits of lead generation:

  • Increased Sales Opportunities: Lead generation strategies are designed to identify and attract potential customers, creating a direct line to increased sales opportunities as these leads are more likely to convert into paying customers.
  • Targeted Marketing Efforts: This approach allows businesses to focus their marketing resources on specific demographics, interests, and behaviors, leading to more targeted and effective campaigns that resonate with the right audience.
  • Enhanced Customer Insights: Collecting leads provides valuable data about prospective customers, such as their needs, preferences, and behaviors, which can inform future marketing strategies and product developments.
  • Scalability: With a well-established lead generation process, companies can scale their marketing efforts up or down based on their capacity to handle new leads, making it easier to grow the business at a manageable pace.
  • Cost Efficiency: By honing in on prospects who have shown interest and are more likely to convert, lead generation can be a cost-efficient marketing strategy, reducing the wastage of resources on broad, non-targeted marketing efforts.

Lead Generation Strategies

You can use the demand strategies listed above to generate leads, but your aim will be different. Personalize your lead generation marketing campaigns to move people through the sales funnel. 

  • Gated content: Offering people something for free can encourage them to listen to your pitch, but make sure you get something in return. To generate more leads, offer higher-quality content to people who sign up for your email marketing list. Create offers that make people want to sign up. 
  • Targeted Landing Pages: Using a landing page with a clear call to action and sign-up form is one of your best lead generation tools. With a targeted landing page, you can go into detail about your products and services and what they can do for potential customers. They also help you track how many people sign up as a result of a specific campaign to help you refine your marketing in the future. 
  • Retargeting Ads: Retargeting ads only appear in front of people who’ve already been on your website. You can set them up with Google Ads and social media. They remind people who already know about your business that you’re still around and ready to offer a solution.

Demand Generation vs. Lead Generation: Summary of Differences

So, what are the primary differences between demand generation and lead generation? Here is a high-level summary outlining the areas in which they differ.

Objective

Demand generation focuses on driving awareness and interest in the company’s products or services to nurture relationships with potential customers.

Lead generation concentrates on capturing contact information from interested prospects for direct marketing purposes.

Approach

Demand generation uses a comprehensive, holistic approach, influencing potential customers at every stage of the buyer’s journey, from initial awareness through to customer advocacy.

Lead generation is more direct and immediate, focusing primarily on the conversion stage of the buyer’s journey where prospects are converted into leads.

Content Strategy

Demand generation content is typically ungated, aiming to reach a wide audience and generate broad interest.

Lead generation often involves gated content, where users need to provide their contact details to access valuable resources, thus generating leads.

Measurement Metrics

Demand generation metrics evaluate success based on awareness, engagement, and customer acquisition, such as web traffic, social shares, or customer lifetime value (CLV).

Lead generation is often measured by the number of leads generated, cost per lead, and conversion rates, among other digital marketing metrics.

Target

Demand generation focuses on a wider audience, nurturing prospects at all stages of the sales funnel.

Lead generation targets individuals who have already shown interest and are likely to become potential customers, focusing on moving them further down the funnel.

Remember, both tactics are part of an inbound sales strategy in which you provide customers with the right information to aid in their decision-making process. The primary difference lies in what information you’re presenting to your audience, based on their current awareness level of your business, to get them into your funnel. 

How Do Demand Gen and Lead Gen Work Together? 

Your marketing strategy shouldn’t be based on demand gen vs. lead gen, but rather on making them work together for a stronger sales pipeline. Here are the primary benefits for why you should harmonize these two marketing strategies:

  • Enhanced Prospect Nurturing: Demand generation draws prospects in and nurtures them through the sales funnel, while lead generation then captures the contact information of these interested prospects for further personalized communication.
  • Improved Brand Awareness: Demand generation strategies increase brand awareness and create a receptive audience, which lead generation tactics can then convert into tangible leads for the sales team.
  • More Holistic Content Strategy: Demand gen focuses on disseminating high-value content to pique interest, while lead gen provides more targeted, often gated, content to potential customers.
  • Higher Conversion Rates: Demand generation warms up the audience, making them more receptive to lead generation efforts, and as a result, can boost conversion rates, turning prospects into actual leads more effectively.
  • Better Data Analysis and Feedback: The insights obtained from lead gen metrics can inform and improve demand gen strategies, and vice versa, creating a continuous feedback loop that refines overall marketing strategies.

Why Performance TV Can Help

Performance TV lets you deliver your Connected TV ads to a target audience, allowing you to measure results and gauge your effectiveness. With performance TV, you can create different video campaigns for demand generation and lead generation and target them based on where people are in your sales process. 

Performance TV lets you target and measure in a way you can’t with traditional television ads. You can use the data from your website analytics and social media ads to tailor ads for building brand awareness and getting them in front of the right audience. 

If you’re using performance TV as part of your lead generation campaign, create ads that go further into detail about your products and services and how to use them successfully. Then include a call to action encouraging people to go to your website or sign up for a free trial.

Demand Gen vs. Lead Gen: Final Thoughts

You need demand generation and lead generation strategies to create a pipeline of well-qualified leads. The two work together to improve your chances of connecting with new potential customers and convincing them to take the final step and buy. Content plays a valuable role in both strategies and video content is a fun and engaging way to appeal to new and interested customers.