Are you ready for Demand Generation 2020?
Demand generation is a concept that’s been transformed over the last decade – but that’s nothing compared to the change we can expect in the next two years
July 19, 2018
Few terms cause more confusion in modern marketing than demand generation. That’s partly because far too many marketers still confuse generating demand with generating leads. However, it’s also because demand generation marketing has undergone radical change over the last eight years. Demand generation marketers today have tools and techniques at their disposal that they could only dream of back in 2010. These have rapidly shifted the scope of demand generation and the skills involved – but we’re only just getting started. Over the next two years, this marketing discipline stands to be transformed once again. And marketers of all types need to start anticipating what demand generation 2020 looks like.
To understand where the next era in demand generation is coming from, it’s vital to get a handle on how it has evolved up to now. Part of that involves defining exactly what demand generation is. That can be trickier than it sounds, because the definition of demand generation has shifted every bit as significantly as the tactics used to achieve it.
Demand generation as direct response
Demand generation is hardly a new idea. You could argue that all marketing is basically an investment in generating demand, but for decades demand generation has been used to mean the business end of that process. Demand generation has been synonymous with direct response. It’s marketing that’s the direct precursor to a sale being made: identifying prospects who are likely to have a need for your product or service, convincing them of that need, and then convincing them that yours is the solution to that need.
When inbound marketing arrived as a concept around eight years ago, it was able to define itself against demand generation. “The demand generation approach is really gravitated to by companies with sales-driven cultures that place an emphasis on the cold call,” argued a post on the HubSpot blog in 2010. Inbound marketers defined demand generation as “outbound lead generation” or “sales-centric marketing.” It paid to interrupt people and tried to convince them that they needed your product. The implication of all this was that demand generation was always interruptive and often irritating: like an outbound sales call in marketing form.
The shifting relationship between demand generation and lead generation
In B2B marketing, demand generation has always been associated with generating leads. It was the first part of a sales process that would then proceed with a sales rep picking up the phone or setting up a meeting to close the deal. This is where a lot of the confusion around demand generation and lead generation comes from. As long as demand generation stayed focused on the bottom of the funnel, and finding people who could be convinced they needed to buy your product there and then, it was going to be almost interchangeable with the objective of getting people to share their contact details so a sales rep could call them.
Things started to change around four years ago, with the emergence of content as a key component in lead generation activity, particularly in B2B marketing. Smart marketers realised that producing valuable content assets and persuading people to share their contact details in exchange for them was a very effective tactic for generating leads. A post from Neil Patel on the Content Marketing Institute blog in 2016 summed up the change, listing the content formats (like eBooks and webinars) most likely to persuade prospects to share contact details.
However, the content marketers investing in creating such assets came to see that this approach involved an inevitable trade-off. When they hid brand content behind data capture forms they generated leads but they dramatically reduced the number of people engaging. This sacrificed the wider reach and influence of their content in building awareness and credibility. It quickly became clear that demand generation and lead generation were not the same. Trying to achieve both at the same time inevitably undermined one or the other.
Demand generation’s journey up the funnel
My colleague Jane Fleming wrote a fantastic post last year explaining how understanding this inherent difference between demand generation and lead generation has become essential for running effective B2B marketing strategies today. Balancing demand generation and lead generation involves distinguishing between people who know enough about your business to see the value in sharing their details and becoming a lead – and those that don’t. It’s this second group that need to be the focus of demand generation, whereas you should target the first group with lead generation activity. The two objectives require different approaches to content and targeting to fit different stages of the buyer journey – and different approaches to deploying your budget in order to achieve your goals effectively.
Once we start to appreciate the essential differences between demand generation and lead generation, we have to start reconsidering the relationship between demand generation and other areas of marketing. That 2010 HubSpot post presented demand generation and inbound marketing as polar opposites. Today, we understand that smart demand generation marketing is an essential complement to inbound marketing strategies. Developments in search and social mean it’s no longer realistic to expect quality content to pull prospects towards your business through some form of viral gravity. It needs to be distributed to relevant audiences through paid media, as part of an effective demand generation strategy.
Marketing with consequences: demand generation and sales today
Demand generation has become far more than direct response marketing – and involves far more than just the generation of leads. So what does differentiate it from other areas of marketing? I like to think of demand generation as marketing with measurable consequences as far as sales is concerned. It touches all aspects of the funnel – but it does so with a particularly close eye on what that engagement will lead to. Demand generation includes building brand awareness – but building awareness amongst an audience that you’ve identified as having strong potential interest in your product. When demand generation marketers invest in brand equity, they do so with a firm, measurable plan for turning that equity into leads, sales and revenues.
At all stages of the funnel, the real differentiator of demand generation marketing is its relationship to sales – but whereas HubSpot used that as a criticism of demand generation back in 2010, it’s now an indisputable strength. Marketing no longer has to take place in the lower stages of the funnel to be linked to leads and conversions, and have a clear ROI attached to it. And the ability to tailor content to different stages of the funnel means that demand generation content doesn’t have to be overwhelmingly product-centric. It’s not connected to sales by its content, but rather by the sophisticated targeting and measurement involved.
We’ve seen this transformation playing out on in the evolution of demand generation on LinkedIn during the past 12 months. Matched Audiences have been a game changer for demand generation strategies. They enable marketers to distinguish more clearly between different phases of the buyer journey and build bespoke segments based on the level of awareness and interest in their business that prospects have shown. This enables marketers to adjust the balance between demand generation and lead generation in a responsive way, doing both more efficiently and more effectively.
At the same time, capabilities such as Video for Sponsored Content and LinkedIn Lead Gen Forms are bringing the different aspects of demand generation closer together. Lead Gen Forms remove friction from the lead generation process. When prospects can share details in just a few clicks, using content for lead generation has far less impact on the overall level of engagement that it drives. When you distribute video through the LinkedIn feed, you’re able to deploy a powerful range of brand assets as part of a demand generation strategy. Video excels at telling stories and driving emotional engagement. However, the initial data from brands deploying video as part of their LinkedIn strategies shows that it can also play a vital role in lead generation. Like all demand generation assets, it’s now able to play a floating role throughout the funnel.
The next demand generation transformation
As I mentioned earlier, the major changes in demand generation marketing over the last eight years have been driven by B2B. However, that’s about to change. If we want clues to how demand generation will change over the next two years, we need to pay close attention to what’s happening in the consumer space.
Digital technology has accelerated the consumer path to purchase by squashing together the phases of research, consideration and the act of buying itself to the extent that they can take place within a few seconds of one another. Not only has the path to purchase itself been compressed to potentially a few minutes or hours, but it now extends in new ways beyond the purchase itself. Consumers aren’t necessarily committed to a particular product choice even when an initial payment has been made and the goods have been delivered.
These new purchase patterns are already redefining what’s involved in generating demand in the consumer space, and the timeframe for doing so. However, rapid advances in AI, voice search and predictive shopping could soon bring about an even more fundamental change. As algorithms do more and more of the work in building a consideration set for consumers, the audience for demand generation marketing will change. To appeal to consumers on either a conscious or emotive level, you need to also send the right signals of relevance and value to the AIs influencing which brands they will be exposed to.
How much will the increasing automation of consumer journeys impact on B2B buying? It’s important to remember that making purchase decisions for a business remains fundamentally different to deciding what to stream on Netflix, choosing your next holiday, or window shopping through Amazon recommendations. The stakes are higher, and the motivations and objectives are very different. B2B purchases must align with the particular proposition and business model of the business making them. They differentiate businesses, define the customer experiences they are able to deliver and the proposition that they take to market. Careers and incomes hang by them, which makes reassurance vital. This is why B2B buyers consistently tell researchers that they attach most value to suppliers who can prove they understand their very specific business model. They attach more credibility to those who can demonstrate this understanding and expertise through highly relevant content. B2B buyers don’t necessarily want their purchases automated – conscious consideration (and the engagement with suppliers that goes with it) has real value.
The forces that are reshaping consumer demand generation will still impact on B2B. However, their influence will play out in significantly different ways. Marketers must meet their audiences’ changing expectations around personalised, relevant content and an intuitive, seamless research and buying process. They will do so not just through new marketing technologies but also by evolving the sales and marketing relationship that defines demand generation itself.
What demand generation 2020 looks like
Here are the key trends that I believe will reshape demand generation by the end of the year 2020:
Demand generation’s profile and importance will increase
All members of B2B audiences are also consumers – and as consumers they expect their media experiences and their product recommendations to be increasingly personalised to their needs. They may not make B2B purchases in the same way as they shop as consumers, but they have the same expectations of the content they encounter. The overriding need for relevance puts greater emphasis on demand generation marketing skills: tailoring content not just to the audience profile but also to the stage that audience has reached in thinking about a particular issue or need.
At the same time, CMOs are coming under increasing pressure to relate marketing investment to the business bottom line in more meaningful ways. The C-suite demands metrics that relate directly to business growth – and demand generation that touches every area of the funnel is the most effective way for marketers to provide them. Expect the scope of demand generation-style planning to increase as a result.
Demand generation and brand marketing’s relationship will evolve
There are powerful and valid arguments as to why building brand awareness needs to be viewed and measured differently to the demand generation tactics that I’ve discussed in this post. It’s hard to predict exactly how making people aware of your brand will flow through into interest, consideration, revenues and loyalty – but that shouldn’t stand in the way of investing in that awareness. There’s a huge element of serendipity in marketing that we’re in danger of missing when we focus too obsessively with tracking every investment and every touchpoint back to an eventual sale.
Despite this, I think that brand marketing will come under increased pressure over the next two years – and the relationship between demand generation and brand marketing will have to evolve. That pressure isn’t just coming from the C-suite – it’s also coming from the advance of AI and the role of algorithms in curating content.
The relevance of your content won’t just be critical for engaging an audience. It will increasingly be critical for reaching them in the first place. Predictive algorithms will prioritise the content most likely to add value to each individual when they weigh up the mix of content in their various media feeds. Being relevant and being able to signal that relevance to AIs will therefore become essential for any successful brand communication. Even brand awareness campaigns will need to start using data in the same way that demand generation marketers do.
There’s an extra dimension to the changing relationship between brand and demand generation, though. Both human beings and advanced AI systems will use the brand that content comes from as a key heuristic in determining how credible and valuable it is likely to be. This will make establishing brand credibility and awareness more important not less – and an essential foundation for demand generation. The relationship between the two will become more complex – and it will become more important than ever to get it right.
Demand generation’s audiences will expand
B2B marketers already know about the complex buying committees involved in purchase decisions. However, the level of insight available to them on the membership of those committees, and the way their influence waxes and wanes through the buying journey, will dramatically increase. AI-powered analysis will help to identify a broader audience for demand generation and suggest tailored content for different groups.
Sales and marketing integration will change the nature of lead generation
Demand generation will have greater scope, more responsibility and more pressure from the C-suite. The ability of marketers to meet this expanded role will depend on how their relationship with sales teams develops over the next two years. The good news is that the sales and marketing relationship is evolving faster than at any point in marketing history.
Sales and marketing alignment is now recognised as critical to business success by the vast majority of business leaders. And with the growing importance of demand generation matched by the rise of social selling, there’s more common ground than ever between the two teams. We’re seeing more businesses using tools like LinkedIn’s Sales Navigator to build a shared view of the customer journey and co-ordinate actions across sales and marketing teams – and those businesses report direct benefits in terms of revenue growth and customer loyalty.
I believe though, that the process of sales and marketing alignment is just getting started. Once a shared view of the customer journey is established, we’ll see sales and marketing operations integrated ever more closely. We’ll see more incidences of shared targets and objectives, and we’ll see more sophisticated demand generation strategies that enable either sales or marketing to take over at different points in the traditional funnel, depending on what’s most relevant to a prospect at a given moment.
This will help to drive significant change in how leads are generated and nurtured. Marketing teams’ involvement will no longer necessarily end when leads are passed onto sales. Sales teams’ involvement will start a lot earlier in the process, including planning, producing and distributing content on social selling platforms, as part of the demand generation process. And as sales teams become more actively involved in demand generation, the notion of generating a lead to pass onto them will quickly start to feel outdated. Where relevant, those leads will already have engaged with your sales team.
We’ll need every tool in our expanding toolbox
Marketers will navigate these big changes in the nature of demand generation using a rapidly evolving range of AI-driven tools and technologies. We’ll have more insight available to help segment audiences, based not just on profile or behavioural data but on predictive algorithms that anticipate their needs and interests at different stages of the buyer journey. With the help of AI, we’ll be able to identify leads without those leads completing a form to formally identify themselves. More effective measurement and attribution will help bring brand awareness and demand generation closer together. And a deeper understanding of the customer journey will help drive the closer alignment of sales and marketing on which the future of demand generation most depends.
It’s going to be an exciting ride in demand generation over the next couple of years. It’s a journey that won’t just change marketing. It will redefine everything associated with driving revenue for businesses.