Demand Generation vs. Lead Generation (and How to Optimize Both for B2B Marketing)

Editor’s note: Please enjoy this encore post, which was one of our readers' favorites in 2022. It was originally published Feb. 3, 2022.

Is demand generation or lead generation more important to B2B marketing?  

That’s like asking whether the pedals or the tires are more important to biking. Each one has its own distinct purpose to serve in keeping you moving. 

However, just because demand generation and lead generation share many of the same end objectives doesn’t mean that they are one and the same. Some B2B marketing commentators have a bad habit of using the terms interchangeably – and they really shouldn’t. Lead generation may fall under the general demand generation umbrella, but it’s a specific part of the process that involves its own specialist skills and tactics. 

Mixing up demand generation and lead generation can mean missing out on leads, and paying far more for leads than you need to. Making a clear distinction between the two in your B2B marketing strategy will help you to drive more leads that are more likely to be accepted by sales and convert to revenue – and it will help you to do so at a lower Cost per Lead (CPL).

Demand generation vs lead generation – the obvious differences

What’s the difference between demand generation and lead generation? Put simply, demand generation is the process of getting people interested in what you have to sell (creating demand); lead generation is the task of turning that interest into names and contact details (leads) that you or your sales teams can follow up with.

Demand generation takes prospects all the way from establishing their awareness that they have a problem you can solve, through increasing trust and confidence in your brand, to definite interest in what your solutions can do for them. 

It might include raising awareness of your product features and why they matter, sharing thought leadership content that demonstrates your sector expertise, distributing free resources and tools that show how useful you and your services can be, or sharing influencer posts from your leadership that showcase your brand values.

 Lead generation translates this interest into something tangible and actionable. The most obvious difference between a demand generation campaign and a lead generation campaign is therefore whether the campaign asks for contact information or not. 

If you gate your content behind a form asking for contact details and then pay to distribute it to a target audience, then you are running a lead generation campaign. Your main objective for that piece of activity isn’t to get as many people as possible engaging with your content – it’s to capture as many relevant leads as possible by giving people a reason to share contact details and making it easy for them to do so.

On the other hand, if you make content freely accessible, and then pay to distribute it to as many relevant people as you can, then you are in the business of generating demand. You’re paying to have as many people as possible engage with what you have to say, learn more about your business and your point of view, appreciate your expertise, and start to think about why they might want to buy from you. You want as little friction as possible getting in the way of that happening.

Demand generation vs lead generation – the differences that people forget

So far, so simple: demand generation doesn’t prioritize capturing people’s contact details; lead generation does. Is that the most obvious difference between them? It certainly should be. But is it the only difference that matters? Of course, it isn’t.

Part of the reason that demand generation and lead generation tend to get confused is that they use many of the same tools and tactics. They both benefit from compelling, relevant content, and they both depend on smart, precise targeting to be effective. However, demand generation and lead generation use targeting and content for different purposes. 

How to target for demand generation on LinkedIn

Let’s start with the targeting. If you can distinguish between the people who don’t yet know enough about your brand and your products and those that do, then you are well on your way to making both demand generation and lead generation a lot more efficient.

The best demand generation campaigns don’t just focus on driving as much reach and awareness as possible; they focus on driving interest amongst the people who are most likely to convert into leads. Similarly, they don’t keep paying to share free content with people who already know everything they need to know about your business. There comes a point when you need a lead generation campaign to try and prompt those people into taking the next step by sharing their details.

The key to more effective and efficient demand generation is therefore to integrate all of the potential data sources that you have, to identify relevant prospects who need their awareness and interest levels raised. You then need the ability to leverage this data to target your demand generation audience in a context where they are open to engaging with you. 

LinkedIn profile data is ideally suited to identifying the most relevant prospects for a demand generation campaign. In our Demand Generation Marketer’s Guide, we discuss how you can choose from parameters like industry, job title, seniority or skills to reach the most relevant people. We explain too, how you can develop different campaigns for different segments, avoiding hyper-targeting and ensure you have the scale you need to achieve your demand generation objectives.

Targeting through LinkedIn profile data is just the start. You can use LinkedIn’s Matched Audience capabilities to add extra dimensions to your demand generation. Here are some ideas for using these capabilities to target your most relevant demand generation audiences, and engage prospects who have a strong propensity to convert to leads:

Use website retargeting to deliver the most relevant content to interested prospects

The website retargeting feature in LinkedIn Matched Audiences enables you to segment visitors to your website based on which pages they view – and then use these segments for your LinkedIn targeting. This provides you with a powerful tool for targeting prospects by the type and level of interest they have shown in your business. You can tailor demand generation campaigns to people who have read particular thought-leadership posts on your blog, for example, relating your solutions to issues that you know these people are thinking about. 

Reach decision-makers and influencers at your target accounts

Account-based marketing (ABM) strategies focus your demand and lead generation efforts on businesses that are more likely to buy what you’re selling – and will be worth more to your business when they do. You can use LinkedIn Matched Audiences to upload a list of the businesses you’ve identified as part of your ABM approach. Adding this to your LinkedIn targeting ensures you’re investing in raising awareness amongst your most valuable potential leads. 

Use email matching to exclude the people who are already leads

It doesn’t usually make sense to target demand generation campaigns at people who are already leads, and already in contact with your business. Adding email matching to your targeting allows you to exclude the people who are already in your CRM database as leads, so that you’re not paying to raise awareness and interest where it already exists. Because the email contact information in LinkedIn profiles is so accurate, email matching on LinkedIn is a particularly effective way of adding or excluding segments from your targeting.

Increasing the effectiveness of lead generation

Targeting for lead generation involves many of the same techniques and targeting options as targeting for demand generation. However, you’ll be using them for different purposes, creating segments of prospects who are ready to take the next step in the purchase journey. Targeting people with a higher propensity to convert to leads will help to lower your CPL – and you will have more of these prospects to target if you’ve been focusing your demand generation efforts as efficiently as possible. 

The vital first step in increasing the effectiveness of your lead generation efforts, is removing as much friction as possible from the process of capturing people’s details.

Removing friction from lead generation forms

Lead generation campaigns need data capture forms – and this is where most B2B marketers have been forced to accept a trade-off in the past. They have had to factor in a likely drop-off in engagement when they gate content – and they often find that leads they’ve supposedly captured actually filled in false information on their contact forms. 

LinkedIn Lead Gen Forms were designed to address these challenges. These are in-app forms, automatically generated and mobile-optimized to suit the way audiences engage with LinkedIn through smartphones. They are pre-populated with prospects’ LinkedIn profile data, and they can be submitted instantly. Your prospects can get on with engaging with your content while leaving you in-depth, accurate contact information. It all adds up to a game-changer for the number and quality of leads that you can capture.

Adding Lead Gen Forms to lead generation campaigns on LinkedIn is easy – and it has a dramatic effect on both quantity and quality of leads. Marketers using the forms have typically increased their lead conversion rates by 3x LinkedIn benchmarks, and 90% of them have beaten their CPL targets as well. We’re also seeing a significant increase in lead quality and conversion to revenue from several customers as more high-value prospects make it through the lead generation process.

How to target for lead generation on LinkedIn

The goal of lead generation isn’t just to generate more leads – it’s to generate more high-quality leads that will be accepted by sales and will go on to convert into revenue, proving the ROI of your lead generation marketing. All of these objectives are easier to achieve when you are able to target relevant people with the right levels of understanding of your business, who have reached the right point in their decision-making journey.

Here are five audience segments that you can use to target lead generation campaigns, through the Matched Audiences feature: 

Use website retargeting to pick up on intent

People who visit product-related pages on your website are sending one of the clearest signals they can that they are interested in buying from you. Reaching as many of these prospects as efficiently as possible should be one of the first priorities for a lead generation campaign. Because the website retargeting feature in LinkedIn Matched Audiences segments your website visitors by the different pages they visit, you can identify these visitors and target them specifically with your lead generation campaigns on LinkedIn. Their higher propensity to convert enables you to generate more relevant leads and to do so at a lower cost.

Target the people who have shared contact details – but aren’t yet leads

People who are already in contact with your business but haven’t yet qualified as leads for your products should be another key priority for lead generation. You can target these by uploading email lists through LinkedIn Matched Audiences. The accuracy of email matching on LinkedIn compared to other social channels (some B2B marketing experts estimate that the match success rate is 75% compared to 15% on other platforms), gives you confidence at the click-through rate you are likely to achieve. 

Sequence lead generation and demand generation for target accounts

Once you’ve created a LinkedIn targeting segment of priority accounts by uploading your ABM target list, you can use the precision of your targeting to deliver a sequence of content to decision-makers at these businesses. Follow-up demand generation campaigns with lead generation activity, to maximize your conversion rate to leads. 

Cross-sell new products to existing customers

If you’re launching a new product or service, then your existing customers are likely to be a valuable source of potential leads. When you target them through accurate email matching, by uploading the most relevant segments of your CRM database, you’re likely to achieve a high click-through rate due to their existing relationship with your business.

Don’t pay to advertise to leads you already have

One of the most obvious ways to increase the efficiency of lead generation campaigns is to avoid targeting people who are already leads. Just as with your demand generation campaigns, email matching can be used to exclude these people from targeting for lead generation campaigns and increase your overall CPL. 

What types of content work best for demand and lead generation?

Your demand generation and lead generation content shouldn’t be differentiated just by whether there’s a lead capture form in front of it. Your content needs to reflect the different objectives that you’re seeking to achieve. 

Lead generation content must deliver value to prospects and justify their decision to share their contact details with you. If it fails to deliver this, then you may succeed in capturing someone’s details, but the chances are you won’t be preparing the ground effectively for sales. Leaving somebody feeling short-changed is never a good starting point. 

Lead generation content is even more effective if the value it delivers reflects the stage of the purchase journey that someone is reaching when they’re ready to become a lead. This is a buyer who knows they are a buyer – and is interested in your business and your products on this basis. Aim for purposeful, in-depth content where possible – advice on scoping out their needs for your category, for example, or developing a relevant strategy for using the solutions they might buy from you. Go beyond the topline and be definitive and detailed in what you provide.

The objectives of demand generation content are different – and the nature of the content often needs to be too. Focus on thought-leadership that reflects the current priorities of your audience. Use compelling visuals and original ideas to capture attention. Focus your headlines around a single, clear idea, and leverage formats (such as video) that will help to deliver stand-out. Don’t be afraid of leveraging strong opinions and humor as well.

It’s worth bearing in mind that certain types of content asset can play a demand generation role and generate leads as well. If you produce in-depth research or an eBook packed with value for your audiences, you’ve got a great asset for educating potential buyers and establishing authority – and you’ve also got something prospects will be willing to share their contact information for. However, even when you have an asset capable of multi-tasking in this way, it’s still worth tailoring how you format and present the content to suit the different purposes of demand and lead generation. 

Break out interesting ideas from your eBook in the form of infographics and blog posts that can be freely shared rather than hidden behind a lead capture form. Turn interesting stats into visual nanographics that will grab instant attention in the LinkedIn feed. And add in calls to action to download the full, lead-generating asset.

Optimization for demand gen and lead gen campaigns

The clearer the visibility you have into the quality of your leads and the route they take to converting, the more scope you have to optimize your lead generation efforts, apply learnings, and keep improving ROI. LinkedIn Lead Gen Forms give you a more granular view of the CPL that your campaigns are delivering. Conversion Tracking, which links exposure to your LinkedIn advertising to predetermined actions on your website, shows you the impact of all of your demand generation and lead generation activity.

Using data such as this, you can identify the demand and lead generation tactics that are proving most effective, test different approaches, and optimize around those that work best. Lead generation marketers have more tools than ever available, and a testing-led approach is the best way to leverage full value from them.

Check out our Lead Generation Success Hub to learn more and get started.