How good is demand-gen marketing at actually creating demand?

Opinion piece

This thought came to me after hours, as I was strolling around The Port of Barcelona, reflecting on a long workday I had surrounded by marketers from B2B companies, where demand gen marketing is a big thing.

Unlike doctors or engineers, marketing as a discipline has always carried many unproven, yet established assumptions about itself. I’ve come to believe assumptions about demand gen marketing are one of them. If the assumptions about demand gen are indeed false, the revenue potential marketers are missing out on could be high.

Whoa, whoa, whoaaaa there Calvin, slow down buddy! Marketing consists of 4Ps, aren’t all of them charged to create demand? And if you had to single out one of them, isn’t it the role of product P to find product-market fit, or in other words, create a product people already want and/or make them want it? You can’t just persuade people to buy a terrible product!

Yes, but that’s not what I’m discussing here. This article is discussing the power of demand-gen marketing in particular.

The accepted demand-gen assumptions

Marketers are trying to make their work formulaic and predictable when the purchase path is everything but. If you spent at least a month around B2B marketers, you would have gotten the gist of what demand-gen marketing is accepted to be, how it works, and what it’s expected to deliver.

Here are the main assumptions that drive the accepted demand gen marketing thought:

• More education, more demand. The biggest reason why people aren’t buying is that they lack information. Therefore, your job is to educate them even more: more webinars, more educational LinkedIn posts, more e-books.

• All buyers start their journey by educating themselves on the problem they’re facing (usually Google Search). Your job is then to produce top-funnel educational content that will rank high, give your brand a chance to be discovered early, and address the problem your potential buyer is interested in (which should, in turn, create demand for your stuff).

• Demand generation marketing material should always be about your product, or about the pains/needs your product can solve (as opposed to brand advertising).

• Content marketing is the main tool by which demand is created.

DISCLAIMER: Before I address each of these points, I will note that I am not completely disagreeing with any of them! My only point is that they’re too emphasized and don’t tell the whole story of what drives demand.

Whether I’m right or wrong, do bear in mind that this is just my personal opinion.

Counterpoint 1: Demand-gen marketing is more about nurturing existing demand, rather than creating new demand from thin air.

When someone says “I create market demand”, my mind goes to a brand like Yeezy. I picture an uphill battle to make an obscure product become wanted by many. When they first launched, most people called Yeezys ugly, outrageous, and overpriced. So how do you create demand for them? Yeezy has succeeded in doing so.

For older marketers reading this who may not know what Yeezy is,
here’s an image for reference.

In comparison, demand-gen marketers in B2B are not creating demand from thin air. Potential buyers exposed to your content already have some demand, otherwise, they would completely tune out of educational podcasts about your product category, your educational LinkedIn posts and blogs, and so forth. If they follow what you have to say, chances are they’re already facing the problem your product can solve, and they plan to pay for a solution at some point. We often think of our TAM in a binary way. We think of it being split into “in-market vs out-market prospects”, but reality looks more like a spectrum. If it is a spectrum, then prospects demand-gen marketing
reaches are one foot in the “in-market” zone.

This doesn’t mean that you aren’t creating demand, but it’s not the 0-to-1 story we’ve been taught to believe. A more realistic belief about B2B demand-gen marketing is like this: ”I know you already want this, but I know you’re not ready to buy yet, so my job is to stay in front of you until that day comes so that you don’t buy from my competitor.”

This is not to say educational content doesn’t move the needle, it does! My point is educational content is but one-millionth factor in the mix of what creates demand and it’s best used for nurturing existing buyer interest. Demand-gen marketing should be open to being more creative and trying different things, rather than assuming educational content is the solution to every funnel problem. More often than not, the barriers stopping people from buying your product are not always rooted in a lack of information, they are rooted in other things. Sometimes those things are impossible to influence, such as a lack of budget, a season of layoffs, other priorities emerging, and so forth.

Counterpoint 2: If people move through the buying journey in known patterns, then by definition, demand already exists.

This is very common in mature B2B categories. It sounds simple and self-explanatory. If there’s a known formula for how people buy your category (or just your brand), then it’s not about creating demand, it’s about timing when demand is triggered, and being present when it does. Demand is already there! I see this as a form of demand capture, although demand capture is usually thought of only in the
context of bottom-funnel activities such as direct response ads.

This is why you write blogs with SEO for specific keywords. You already expect buyers to start their journey by looking up the problem you just wrote a blog post about, and you want to be discovered on Google when that happens. That’s a smart thing to do because most buyers who start their journey this way are first-time category buyers. What makes them so important is they constitute a lion's share of your TAM’s revenue potential (ref: How Brands Grow). This is where content marketing shines. The brands easiest to come across in the purchase path have the highest chance of being bought.

Other buyers who have bought the category more than once have probably developed brand preferences and already know which brand they want as soon as they face a specific problem. This is why you should think of brand building in tandem with demand-gen. This is not to say you should stop doing product-centric TOFU marketing, because one brand may be preferred for one JTBD, but they’ll be open to starting a whole different buying journey for another need, giving you a chance to be discovered at the top of the funnel. That will require you to think of a different formula, aside from the one you already have.

Counterpoint 3: Content marketing can ideally reach only a fraction of your category.

If a person is reading content about your product category, chances are they are already somewhat interested; therefore, they have some demand. Think about it. Do you read content on cloud engineering software? Unless you plan to buy it soon, you probably don’t read it. That’s why Oracle (a brand from this category) pays the Golden State Warriors millions of dollars to place the Oracle logo across many GSW touchpoints - and even have the Warriors’ stadium named after Oracle!
Had Oracle relied on content marketing and bombarding its readers with facts, their share price wouldn’t have grown so much. They capitalized on the reach potential they could never get from content marketing alone. Am I saying the key to success is to partner with former NBA champions? No. But try to think bigger.

Even the category leaders in content marketing will only reach the 10% who are heavily invested in the category. The likes of advertising will reach the other 90% of future buyers who don’t care about your brand or your category. This is why content marketing alone makes it easy for brands to fall into a trap of marketing to their peers, creating an echo chamber. This is because, again, “content engagers” will always skew towards people who are invested in your category… and no one’s more invested than your peers.

The wrap-up

I’m starting to rant and go far off the tangent. I’ll pause here and refer back to my main point: demand-gen suffers from a ‘when all you have is a hammer, every problem looks like a nail’ problem. It’s a microsphere of marketing that desperately needs more diversity of thought, rather than only accepting those who follow the common formulas down to T.

There’s more to generating buyer demand than demand-gen marketing practices. Content has limited potential that can only take you so far. Not diversifying your marketing leaves too much revenue on the table. Customer journeys are chaotic and various, not formulaic and linear. Unfortunately, changing things is out of their control, even if they wanted to. Demand-gen is a marketing department most pressured to deliver on short-term returns which forces them to do pushy marketing tactics that look more like sales, and ironically, miss out on creating demand.