Guide

Demand Generation

Definition, Importance, and Examples

Lifestyle

When it comes to helping your customers understand your brand, you’re likely going to run into the term “demand generation.” Simply put, a demand generation strategy is used to increase awareness of your product, or more simply generate demand. That doesn’t particularly mean that your main focus will be lead generation—more on that in a bit—so much as it means that you’re focusing on putting your brand in places where customers can start to understand what you offer.

How this works is by putting your brand in places where customers are most likely to engage with it anyway. Take this example, for instance: if you’re selling tomatoes, you’re not going to want to let people know about your tomatoes at a laundromat. You’re going to go to a grocery store, right? Demand generation is a marketing strategy that looks at consumer need, and the product you’re offering, and then finding the perfect way to bring awareness to that product in a way that will hopefully later translate to promising leads.

What is demand generation?

Demand generation is a type of inbound marketing and is the umbrella term for the full marketing strategy (or “marketing funnel”) that creates interest in your brand’s product or service.

While a demand generation strategy technically encompasses the entire customer journey from interest all the way to lead generation, an easier way to think about demand generation is through the lens of how a potential customer feels about your product or service. A demand generation marketing strategy starts by assessing how well a potential audience knows your brand, identifying ways to introduce that brand to a new buyer group, and then nurturing that relationship by gaining trust and authority. What is the problem that your brand can solve, and how much does your customer trust your brand to be the solution for that problem? This is particularly important in business-to-business (B2B) demand generation, as other businesses are searching for solutions to get their own brands into the public purview.

Demand generation strategy can vary from brand awareness campaigns on social media all the way to thought leadership (webinars, eBooks, white papers, etc.) in your brand’s industry. At the end of the day, demand generation is largely about working to ensure your potential audience knows about the brand you represent, the value behind it, and the trust that the customer should have in your brand.

Demand generation has the potential to help the entire customer journey, whether it’s dealing with creating demand for the product or the sales team pursuing qualified leads.

What is the difference between demand generation and lead generation?

The main difference between demand generation and lead generation is that demand generation is a type of inbound marketing that helps establish customer awareness of your brand or product. Lead generation is more focused on the buyer and is a part of demand generation strategy.

The relationship between demand generation and lead generation can be complicated. While the terms may seem interchangeable, they’re anything but. Lead generation is a piece of the larger demand generation puzzle. While demand generation can include lead generation as a later step in a larger marketing strategy, demand generation is mostly about creating awareness for the product or service and how it can be an opportunity for customers. For example: while a social media campaign may eventually drive a purchase, it ultimately is on social media to create wider awareness. That would be the demand generation side of the equation.

Lead generation is the more specific part of the strategy that turns interest in the product into action. This stage will often involve the sales team behind the product or service. Lead generation is the kind of marketing that turns interest in a brand into qualified leads.

Why is demand generation important?

As previously stated, demand generation is a type of inbound marketing aimed at developing awareness for a brand and its services. However, the importance of demand generation is far beyond establishing general awareness; at its best, a good demand generation marketing strategy can help to imbue a value and trustworthiness in your brand that may not have existed beforehand. It’s, in a phrase, reputation setting at a marketing level. And when it comes to B2B marketing, being able to affirm the trustworthiness of your brand is paramount.

On the business side, demand generation is the first (and necessary) step to moving onto lead generation, which results in a more tangible action by the customer. Customers begin using your brand and its product at a higher rate, reinforcing the opportunities presented at the start of the demand generation marketing process.

Benefits of demand generation

The most obvious benefit of demand generation is that if executed successfully, it results in lead generation and increased customer use of your brand’s product or service. But benefits of a successful demand generation marketing campaign don’t stop at lead generation.

Cost per click

1. Overarching cost reduction

Brands spend an exorbitant amount of money trying to retain customers,1 whereas demand generation programs can help establish a reputation beforehand and eliminate smaller costs later on in the marketing process.2 By establishing itself as a trustworthy, knowledgeable source in the industry, a brand has the potential to retain customers and develop a meaningful relationship with its customer base. It also affects the way that future campaigns will be run, whether that’s a better return on ad spend (ROAS) or a lower cost per click (CPC).

Brand awareness

2. Brand awareness and reputation

In the end, brand awareness is one of the greatest assets that comes out of demand generation. A good demand generation program can introduce your brand to a whole new set of customers—not simply with the objective of selling a product or service, but by becoming a valued part of the life of that buyer. The brand reputation established in the early stages of demand generation doesn’t just have the potential to result in quality leads; it can create long-standing brand relationships with customers who only turn to your brand to solve the needs in their day-to-day. It can also bolster the reputation of your brand, carving out a space for your brand as thought leaders via published case studies, webinars, etc.

3 examples of demand generation

Case study

1. Seiko and the power of digital demand generation

Seiko watch parts

Seiko, an international watch company founded out of Japan, wanted to improve visibility and sales. Seiko used Amazon’s in-market audience segments to reach relevant customers with display ads both on and off of Amazon through Amazon DSP. Finally, the brand leveraged the creative flexibility of display ads to showcase their brand values and updated their creative throughout the length of the campaign to highlight relevant holidays, such as Father’s Day. The program paid off with a 110% increase in keyword searches, a 112% increase in organic impressions, and a 1.3x higher ROAS for search and display combined.1

Case study

2. Rhodius and the need for awareness

Rhodius awareness

Canned water and beverages brand Rhodius had a primary goal: increase awareness and growth of its canned water line. To achieve that, Rhodius combined sponsored ads campaigns with display ads to reach shoppers researching beverages, and developed custom segments to engage shoppers who were most likely to purchase canned beverages online. The brand also took advantage of the creative flexibility of display ads and used creative that conveyed its unique brand values. That campaign resulted in a 120% increase in keyword searches and a 156% increase in organic impressions.2

Case study

3. Godrej Properties and quality leads

Godrej properties

Godrej Properties, the real estate arm of the Godrej Group, is a developer in India with presence in more than 12 cities. They wanted to optimize media efficiency of their digital campaigns by building interest among relevant prospect buyers for their upcoming project launch in Central Noida. The end goal was to increase awareness and generate quality leads. Amazon Ads worked with Godrej Properties and Madison Digital teams to identify relevant audience segments based on purchase propensity, demographics, location and shopping signals like consumers looking for electronics, appliances, fashion accessories from premium brands, and auto and travel accessories.

The result of the long campaign ended with generated leads at a 14% lower cost per lead (CPL) with a reduction in the non-contactable leads ratio by 31% versus the previous Amazon Ads campaigns.3

If you’re interested in marketing solutions for your customer acquisition strategy, you can learn more about Amazon Ads’ products or contact us to get started.