The term “demand generation” gets thrown around a lot these days, overused to the point that many companies have lost sight of what it really means.
Teams fall into the trap of thinking demand generation is a singular approach to growth, when in fact it should be a holistic strategy. It has started to look and feel like a one-and-done “growth hack” that takes a short versus long view of customer acquisition.
One common confusion is mistaking demand capture for demand generation.
Case study: why paid search alone isn’t enough
I recently worked with a CEO where this cropped up. Our objective was to 10X growth of new users within 6 months. He was convinced paid search was the silver bullet we needed to drive growth.
His thinking: when people are actively searching for something, they’re in the buying mindset. If we deploy most of our marketing budget to search, we’ll be able to acquire these users looking for services like ours.
He wasn’t wrong. But he missed the big picture of how people make their purchasing decisions. Someone might be ready to buy, but if they’ve never heard of your company before, the likelihood of them going with you versus another brand they know is low. It all comes down to trust.
This was a brand new company in a brand new category. Had you seen our search ad for the first time, you might click to the website, if we nailed the copy and targeting. We might pick off a few opportunistic searches from people willing to take a chance on an unknown. (And we did.) But more often than not, those eyeballs would gloss right over to the next most familiar option.
What happened when we over-invested in paid search (without any higher-funnel investment):
Conversions on search ads were low
CPCs skyrocketed
We burned thousands of dollars on under-performing campaigns.
Familiarity breeds trust in marketing
There’s this interesting concept in marketing around familiarity. When someone knows your brand, it increases your chances of gaining their trust. And trust gives customers confidence they’re making a good purchasing decision. In marketer speak: it increases conversion.
When was the last time you swiped (or tapped) your credit card for a company you just met? It’s like offering to buy dinner for the person who just sat next to you on the subway: not much context to give you a good feeling that the night’s going to end well.
Brand awareness converts more customers
A recent Forbes article found that to convert more customers, you should invest in brand awareness. That means reaching people at the right place and time where they work, live and play. Once they know who you are and what your brand stands for, and once you’ve convinced them your product or service is what they need, you’ve earned valuable real estate in their mind. When they’re ready to make a purchase, they think of you before your competitor.
Demand gen vs. demand capture
Hubspot defines demand generation as “capturing the umbrella of marketing programs that get customers excited about your company’s product and services.” Umbrella being the key term. There are many different touchpoints throughout the customer journey required to generate enough demand for them to come knocking on your brand’s door.
There’s a tendency to want to put marketing strategies into one of two buckets: brand or performance. But one can’t live without the other. And there are many channel strategies like digital display and even out-of-home that influence brand and performance.
Online retailers have even invested in brick-and-mortar to stick out from the digital crowd and drive brand engagement & boosted performance: Warby Parker, Allbirds, and Lulu and Georgia are just a few e-commerce brands that have invested in in-person experiences. What better way to get someone to really know your brand than by having them walk in a store, touch, and try on your product? Brand investments have a trickle-down effect on performance.
Demand generation helps people know who you are, what your brand stands for, and why they should open up their wallet for you. This is associated with higher funnel marketing channels where people aren’t actively in the buying mindset yet, like:
Investing in digital display ads via LinkedIn, Meta or Google ad networks
Having your CEO as a guest speaker on a podcast your customers listen to
Writing bylines in publications your customers read
Investing in billboards in areas where your customers live and work
Demand capture means your brand is in the right place and time when someone is ready to buy. That means:
Being a top paid or organic search ranking when someone is looking for a product or service like yours
Making sure your website is optimized for conversion with the right messaging and signup flow to prevent dropoff
Nailing your email nurture or re-engagement programs so you stay top-of-mind and encourage customers to buy with you when they’re ready
Demand gen is the pitch, demand capture the close
In sales terms, demand generation is the pitch, demand capture is the close. And you can’t close without a good pitch. In most cases, that “pitch” consists of you as a brand reaching your customer to tell your story and gain their trust that your product or service is right for them.
There are no silver bullets in marketing
Coming back to my SEM-loving CEO, he was focused on the bottom of the funnel and missed the value of investing higher up the funnel in channels like digital display, social media or email marketing. And that’s not uncommon. It’s harder to measure those channels’ impact on sales. And for teams focused on dollars in and dollars out (or ROAS, return on ad spend), it’s a tough case to make.
But our search campaign performance showed us why we needed to invest further up the funnel. A month into our search campaigns, we noticed an alarming trend: we had little to no branded campaign volume – the campaigns where we show up when someone searches for the company name. Branded search campaigns are not only the highest converting and most cost-effective search campaigns, they’re a signal that your company is building brand awareness.
We inferred that people weren’t searching for us or converting on our other campaigns because people didn’t know about us... and that’s where I was able to get the CEO and CMO on board with more investment higher up the funnel to start building brand awareness. We needed to spend on campaigns in other channels to improve our search campaigns.
High funnel investments have a halo effect on the low funnel
I’ve seen time and again how investing higher up the funnel has a trickle-down effect on the lower funnel. It’s no coincidence when your branded search traffic “all of a sudden” lifts after you start investing in Facebook ads. The bump in hard-to-attribute direct traffic is not uncommon after a recent event or podcast sponsorship.
Generating and capturing demand requires a comprehensive strategy that considers the many different touchpoints a customer will have with your brand. Every single one of those interactions reinforces one another.
A thoughtful, multi-channel strategy is your ticket to scaling growth
Repeat after me: there are no silver bullets in marketing. Paid search alone won’t supercharge growth. Subway ads are not your ticket to an IPO. A thoughtful and deliberate strategy designed to stay top-of-mind with your customers will increase your chances of you being the first brand they think of when they’re ready to buy. That’s the key to scaling user acquisition and growth.
