Demand Generation vs. Inbound Marketing: What’s the Difference?

Let’s be honest, the B2B marketing industry (and we marketers in general) are pretty bad at defining our terms and sticking to that terminology. Rather than being driven by clarity, our messaging, content and general communications is far more often a haphazard mix of trending buzzwords. This helps neither our marketing teams nor our prospects and customers.

This post is far too small in scope to address this problem – a proper solution would be book-length and require a full-time effort to keep it updated.  Instead, I’m hoping to bring clarity to two specific terms that seem to confuse some B2B marketers new to the discipline: inbound marketing and demand generation. 

Inbound Marketing vs. Demand Generation: What’s the Difference?

At a quick glance…

Demand generation is a sub-discipline of B2B marketing. B2B marketers specializing in demand generation leverage a mix of different strategies (e.g., account-based marketing), channels (e.g, search, events, email or content syndication), and tactics (e.g., specific keywords for search or target-accounts for content syndication) – all of which are geared towards driving interest in and desire for your products and services (i.e,  demand).

Inbound marketing isn’t a sub-discipline of B2B marketing, but rather a strategy, like ABM. Unlike ABM, however, which can use any marketing channel to engage decision-makers at specific accounts, inbound marketing focuses on the use and optimization of specific digital channels that drive traffic to and engagement at your company’s website and landing pages. Inbound marketing is typically an important part of demand generation, and it often supports ABM strategies as well.

A Deeper Look: What is Inbound Marketing?

According to the definition by Marketo, inbound marketing is,

“A strategy which focuses on non-paid or “pull” marketing tactics to “create brand awareness and attract new business.”

Using inbound methodologies, marketers strive to earn prospects’ attention, rather than pushing offers on prospects in an invasive way.

Inbound Marketing Tactics

Inbound marketing tactics are typically digital, but are also generally defined within the categories of owned or earned media as well as “pull” marketing tactics.

Examples of inbound marketing include, but aren’t limited to:

• Blogging
• Webinars
• Video
• Email marketing
• Websites and microsites
• Landing pages
• Search engine optimization
• Social media

Inbound marketing “pros”:

• Potentially lowers cost per lead compared to outbound marketing
• Provides opportunity to develop thought leadership via content marketing and earn industry credibility
• Is noninvasive when done right
• Corresponds to the growth of prospect digital research habits

Inbound marketing “cons”:

• Earning authority and organic results can be time-consuming and slow
• Winning attention can be challenging in saturated industries
• Diverse skills are required to execute

A Deeper Look: What is Demand Generation?

Beyond the obvious – i.e., demand generation creates a want for a brand’s products or services – demand gen is focused on the progression of this “want.” A lead doesn’t signify demand; it simply show initial interest. Sales pipeline opportunities, on the other hand, signify demand. Thus, demand generation, as a discipline, includes generating initial leads and then converting them all the way down the funnel into opportunities, and even creating demand for new products/services among existing customers.

To be clear, a volume-based mindset where success is measured by the number of leads generated has now place in modern demand generation. Instead, the success of a demand gen engine is measured in the quality and value of pipeline opportunities (and potentially revenue generated).

Successful demand generation starts before lead generation with the identification of the right audiences or accounts, which is why ABM strategies have become so important to demand gen. Further, demand gen usually requires significant work integrations with sales and customer success teams to ensure processes, technology and people are all aligned to convert prospects down the funnel.

Demand Generation Strategies

Demand generation marketers execute omnichannel campaigns designed to engage prospects throughout every stage of the sales pipeline, from awareness to post-sale outreach. This involves a broad mix of strategies (such as ABM and inbound marketing) and all the channels and tactics they comprise.

Demand gen “pros”:

• Focused on measurement, so it’s much easier to calculate ROI compared to arts-and-crafts, PR-based B2B marketing of old
• Forces marketing teams to organize strategies, align team efforts and integrate technologies
•  Supports sales and customer success efforts, leading to more closed deals and higher customer retention rates

Demand gen “cons”:

Demand gen cons typically occur due to maturity issues and biting off more than they can chew. For example, continually investing in more tech solutions before gaining adequate proficiency in tools and systems you already have (i.e., shiny-new object syndrome). Or, jumping head-first into a trending strategy or tactic (such as ABM) without gaining the fundamentals to ensure it will work (e.g., getting sales on board with ABM strategy before launching it).

Demand gen is essentially the evolution of B2B marketing (though it doesn’t cover everything B2B marketing) and it’s much more complex, which means there can be more pitfalls to avoid. But just like a new Tesla Model S is more complex than a 1920s Ford Model T, once you’re tuned into demand gen and understand how to drive it, it’ll get you to where you want to go much faster and more efficiently.

Where Does Inbound Fit Within Demand Generation?

Inbound marketing is one strategy that demand marketers should employ as part of a comprehensive, full-funnel demand strategy.

Digital marketing tactics and pull methodologies falling under the inbound marketing umbrella are highly effective modes of connecting with digitally savvy decision-makers. Thought leadership, lead generation, lead nurturing, pipeline growth and other metrics that support demand generation’s ultimate goal of pipeline growth are very well served by inbound marketing strategies.

However, most marketing organizations find they hit a plateau using inbound strategies alone, and they find they must expand into paid digital efforts (such as 3rd-party lead gen) and traditional marketing channels (such as in-person events) to scale demand and hit goals.

Inbound is a key component of demand generation and will continue to be. Prospects want to do their own research, so your inbound game must be on point at all times. But, like we often say, you can’t expect all your prospects to come knocking at your door. You can’t scale with inbound alone.

Where does your organization fall in various measures of demand gen marketing maturity? To benchmark your B2B marketing program against some of the most effective demand marketing organizations and identify areas where improvement is needed, download the “Guide to Demand Orchestration Software”