Image of a neon sign shaped like a lightning bolt to signify the power of generating demand and leads

Demand Generation vs. Lead Generation: Key Differences

Jonas Sickler, Digital Marketing Analyst

Key Points

  • Demand Generation is the methodical process of turning strangers into prospects.
  • Lead Generation is the strategic content that marketers build to nurture brand-aware prospects through the purchasing journey.
  • Knowing the primary differences between demand gen and lead gen is vital to the success of your inbound marketing campaigns.

Within the last several years, there has been some confusion between the terms demand generation vs. lead generation. In fact, digital marketers have started to use these terms interchangeably, even arguing that there’s no need to make a distinction between the two. But, are these terms really all that interchangeable? Does it matter what you call your targeted marketing strategies?

Read on to sort out the difference between demand generation vs. lead generation.

What is demand generation?

Demand generation marketing is the process of creating awareness and demand for your products or services. It expands your audience, generates buzz, and drives traffic to transform interest into action.

If you took the term at face value, you may think that demand generation (or demand gen) was only about generating some vague, unmeasurable interest — demand — in your product or service.

In fact, demand generation is shorthand for the data-driven strategies marketers use to generate awareness and interest.

To use a fishing analogy, demand generation is like tossing bait in the water to attract as many fish as possible to your boat.

What is lead generation

Lead generation describes the process of turning suspects (or prospects) who show interest in your product or service into bonafide customers.

Lead generation is the fruits of your demand generation marketing efforts. In other words, you got their attention through demand gen, now you’ll get their money through lead gen.

If we continue with the fishing analogy, lead generation is like baiting your hook with the best lure to catch Chinook Salmon in Puget Sound.

There are virtually endless methods a marketer can employ to convert those interested prospects into customers — especially when it comes to B2B lead generation. Choosing which types of content work best for your message depends on the overall goal of your campaign.

Demand generation vs. lead generation: comparison

Demand generation grows your audience by attracting new visitors to your website and introducing them to your solutions. On the other hand, lead generation converts your audience into qualified leads. It’s a subtle distinction, and the two strategies are deeply connected.

Demand gen feeds into lead generation. First, it’s important to drive awareness and develop interest because not everyone is ready to opt-in or to convert immediately.

graphic highlighting the key differences between demand generation and lead generation

Let’s break down the key difference between lead generation and demand generation even more clearly.

funnel diagram

Demand generation (top of the funnel)

  • Increases brand awareness
  • Educates your target audience
  • Builds trust
  • Sparks interest

Lead generation (bottom of the funnel)

  • Captures audience contact information
  • Generates qualified leads and nurtures them
  • Demonstrates brand value and differentiation
  • Converts high-quality leads to customers

So, should you distinguish demand generation vs. lead generation efforts within your inbound marketing strategy? The answer is a resounding “Yes!” With such distinct differences in approach and tactics, it’s essential to separate them within your marketing methodology.

Demand generation examples

There are various types of demand generation content that your marketing team can use. But, they all share the same goal: familiarize the right people, who have the right problems, with your brand and its solution.

It takes a measured amount of each of these tactics to power your demand generation efforts.

Brand awareness

Throughout the demand generation process, your goal is to draw the prospective customer in at the top of the funnel by creating awareness. Once they’re deeper in the funnel you can bombard them with lead gen content.

We define what brand awareness is here. In short, it’s all about creating positive associations between potential buyers’ experiences and your product or service.

Let’s say you sell sunscreen, for instance. Your desired customer base is pretty broad. Most people on the planet would benefit from wearing sunscreen. So, to generate brand awareness, you want customers to associate the need for sunscreen with your specific brand. You’ll want your brand name to saturate the sunscreen market so well that customers no longer even use the word “sunscreen,” they use your brand name to describe the product they’re protecting their skin with.

Map buyer personas to the customer journey

Brand awareness is great. But, in order to increase conversions, you need to connect with the right target audience. The first step is to create buyer personas. Personas help you segment different types of customers and understand their unique set of pain points.

Then, develop customer journey maps to see how each persona group experiences the buyer’s journey.

Progressive Auto Insurance offers a great example of brilliant, targeted marketing with its “Afraid of Becoming Your Parents?” ad campaign.

In response to a surge of Gen Xers and Millennials buying their first homes, Progressive invented Dr. Rick, a psychologist who helps wayward, aging millennials avoid the horror of becoming their parents.

It’s a perfect, hilarious example of well-defined personas in action.

The demand generation campaign put Progressive front and center in the highly competitive home insurance market. At the end of each commercial, the narrator says, “Progressive can’t help you avoid becoming your parents, but we can save you money on home insurance.”

It’s quotable and it’s been so wildly successful, it spawned gorilla marketing moments, with people dressing up as Dr. Rick for Halloween and costume parties.

There are many creative ways to connect with your target market. A great place to start is to build out personas and empathy maps.

Thought leadership

Thought leadership is a fantastic way to endear prospects to your brand. There are few people who understand the benefits of thought leadership better than Gravity Payments CEO, Dan Price.

Dan Price became popular when he slashed his own pay in order to give every Gravity Payments employee a $70,000 a year base salary. The move was highly politicized and polarized in the media. Some people chastised him, while others lauded him for taking such a personal hit to do right by his employees.

Dan became an active thought leader on social media where he shares his successes as a CEO with thousands of followers. And, it seems to have done a lot for the revenue side of the business. Gravity’s revenue in 2014 was 150 million dollars, with revenue increasing 15 percent year after year.

Dan doesn’t shy away from controversial topics, which can be a risk. However, the majority of his followers (and prospective customers) seem to love his straight-from-the-hip approach.

Executive thought leadership like this is a simple, yet effective way to connect with prospective customers on a deeper level. It can humanize your c-suite, and in the process, your brand.

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Lead generation campaign examples

Unlike the broad net of demand gen, lead generation strategies are much more specific and targeted. They may include gated content marketing with optimized landing pages such as webinars or white papers. Or, they can focus on longer-term lead nurturing email drip campaigns.

Gated content

Gated content is content that can only be accessed or downloaded after an online visitor (or your prospective customer) comes to your website and gives you some specific information about themselves. This contact information is then, typically, passed on to the sales team to make a connection.

Gated content is a fabulous way to capture some very important information about the people visiting your web properties. Usually, this information comes in the form of email addresses, titles, company names, and/or phone numbers. This type of content marketing is also sometimes referred to as a “lead magnet.”

In exchange for this highly valuable information, users get access to anything from webinars (we will get to these in a moment), video tutorials, surveys and studies, ebooks, newsletters, and so much more. The most important thing to remember is that visitors will be expecting something targeted and worthwhile if they are handing over important information about themselves to you. 

Social media

Social media is another fabulous part of the lead gen buffet that many B2B marketers tend to overlook. It’s true, social media has traditionally been viewed as a B2C marketing tool, but more B2B businesses than ever are tapping into the power of platforms like Twitter and LinkedIn to help educate their customers on their unique service offerings and updates.

B2B social media strategy shouldn’t be dull.

The more creative you get with your brand’s social media presence, the more likely it is that you’ll stand out to CMOs and other decision-makers as they seek solutions. Social media posts can help humanize your business. Your company profiles can also be a direct point of contact for prospects looking to solve their problems and have their questions answered.

White papers

White papers are highly technical documents that inform a reader about a specific problem or issue they face. Downloadable white papers are excellent lead magnets because they often target decision makers.

In the lead gen setting, white papers are typically a gated resource, like case studies, that can highlight just a problem, or highlight a problem and its solution. The former is a great tool to use early on in the purchasing journey. It validates a prospect’s fears that something is wrong and urges them to act quickly to fix it.

White papers that highlight both a problem and a solution are also a great downloadable resource for further along in the lead gen nurturing process.

However, it’s very important to note that white papers are not elevator pitches. Readers will be immediately turned off if they sense the entire document was built to hard-sell them on a service. Effective white papers walk a fine line between informative and persuasive. Using unbiased data can signal to a reader that your brand is trustworthy and looking out for their best interests over profits.

Video, webinars, infographics, & other content

When considering lead generation tactics, it’s important to think beyond copywriting. Audio and visual content such as webinars and podcasts aren’t just good for accessibility reasons, they’re also easily digestible to prospective customers.

A busy CMO may not stop to read your 2,000-word blog. But, she might be willing to watch a 2-minute, captioned video sent through an email marketing campaign.

Some marketers might share an infographic you created, while others may listen to your podcast on the morning commute. A customer may not download a lead magnet, but they may watch product demos or instructional videos.

For example, Terakeet SEO Manager Jonas Sickler participated in the following webinar with Clearscope about how to create topic clusters.

There is no way around it. If you want your demand gen strategy to succeed, you will have to consider making dynamic content that can be digested just about anywhere.

Demand generation vs. lead Generation: metrics

In order to measure ROI on your demand generation strategy or lead generation content, you must track multiple data points. For example, your 90-page whitepaper may have a high download conversion rate. But, how do you know if it reached the right audience, or compelled them to take action?

Fortunately, there are metrics and key performance indicators (KPIs) you can use to track how well a specific campaign performed. You’ll need to look at each of your acquisition and referral channels in order to get the full picture of your inbound marketing performance.

This isn’t an exhaustive list, but here are several ways you can track performance for demand gen vs. lead generation campaigns.

Demand generation

  • Cost per mille (CMP)
  • Organic traffic
  • Market share percentage

Lead generation

  • Marketing ROI per campaign
  • Customer acquisition cost per campaign
  • Conversion rate
  • Time to purchase (length of the sales funnel)
  • Number of email subscribers
  • Number of marketing or sales qualified leads 

Combine demand gen and lead gen for greater marketing impact

A full-funnel digital marketing strategy requires both demand generation and lead generation to be successful. Let’s look at an example of how Terakeet leveraged both strategies to strengthen our inbound marketing efforts.

First, we calculated the market share of the top performing websites within the beauty industry. Then, we leveraged the data to generate brand awareness (demand generation) and target specific audiences with lead magnets (lead generation).

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On the demand generation side

Terakeet published a market trends article about the cosmetics and beauty industry. Then, we secured brand mentions through PR on websites such as Glossy, MediaPost, and Global Cosmetic Industry.

To expand our demand gen net, we also published an in-depth analysis of one of the market share winners, Byrdie. This industry case study revealed step-by-step how the online publisher captured organic search market share from top brands. To gain exposure, we extensively shared the Byrdie study across social media.

During the first 30 days, the two articles received 29.94k organic search impressions and 1,286 pageviews. Additionally, on Twitter the Byrdie article alone pulled in 9,151 impressions and 535 engagements. Not bad for building brand awareness.

On the lead generation side

Terakeet used CTAs within those articles to encourage our audience to download the full study. Next, we retargeted individuals who read our articles but didn’t download the report. Finally, we ran paid ads on social media to download the report directly.

As a result, our full-funnel content marketing approach caught the attention of top executives at some of the biggest beauty brands in the world.

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