Recent Studies Show That It Might Not Be One Or The Other

When it comes to our own mar­ket­ing, we def­i­nite­ly live our core val­ue “Prac­tice What You Preach,” and this arti­cle is right in line.

The rea­son I men­tion this is because the blog arti­cles in the ver­sus col­lec­tion are some of our top-per­form­ing arti­cles. In fact, most of them end up in the top 10 of all-time viewed and clicked-on blog arti­cles. Peo­ple appear to enjoy the ver­sus theme, and that’s why today’s arti­cle is going to be part of that col­lec­tion.

Late­ly, I feel like demand gen­er­a­tion (pre-aware­ness stage mar­ket­ing) has been get­ting a lot of renewed atten­tion, while inbound mar­ket­ing (aware­ness stage mar­ket­ing) has been tak­ing more of a back seat. I’m curi­ous as to the shift and I want to help read­ers under­stand the dif­fer­ences, advan­tages, risks and rewards, so you can make a safe, edu­cat­ed and results-ori­ent­ed deci­sion on mar­ket­ing strat­e­gy for your com­pa­ny. Demand gen­er­a­tion, inbound or both? You make the call!

Advantages, Risks And Expected Results From Demand Generation Marketing Tactics

Demand gen­er­a­tion is defined as any activ­i­ty that cre­ates inter­est or aware­ness in your company’s prod­ucts or ser­vices. By def­i­n­i­tion, it assumes aware­ness does not exist pri­or to your demand gen­er­a­tion efforts. That’s why we con­sid­er demand gen­er­a­tion to be pre-aware­ness mar­ket­ing.

Advan­tages: It’s def­i­nite­ly an offen­sive strat­e­gy, mean­ing it’s proac­tive and attempts to find peo­ple who are not look­ing but are a pro­file prospect match nonethe­less. If done well and with key tac­tics, like account-based mar­ket­ing, it can also help align the sales and mar­ket­ing teams, a goal that should be on most CEO’s wish lists. Anoth­er advan­tage is the acqui­si­tion of data. You can take advan­tage of the var­i­ous data ser­vices and buy the names of poten­tial prospects based on any num­ber of qual­i­fi­ca­tion cri­te­ria. Instead of wait­ing for them to come to you, you go to them.

Risks: I could have called these dis­ad­van­tages, but I like risks bet­ter because risks can always be mit­i­gat­ed with good plans and strat­e­gy. Just because there are risks doesn’t mean we don’t move for­ward. Typ­i­cal­ly, demand gen­er­a­tion pro­grams require big­ger bud­gets and longer time frames for the invest­ments to pro­duce return.

In most cas­es, you’re rent­ing names, so you don’t own the con­tact infor­ma­tion. You’re inter­rupt­ing poten­tial prospects, so there’s a risk in spoil­ing some brand equi­ty with some of the tar­get mar­ket. Less data on the per­for­mance of the pro­gram is usu­al­ly avail­able, mak­ing it more chal­leng­ing to opti­mize pro­gram per­for­mance and cut out non-per­form­ing aspects of the mar­ket­ing effort.

Expect­ed Results: If time is not on your side and you need leads imme­di­ate­ly, demand gen­er­a­tion tac­tics typ­i­cal­ly pro­duce results in a short­er time frame than some deploy­ments of inbound, but dri­ving those results might require a big­ger bud­get. For exam­ple, you can pump mon­ey into pay-per-click and pro­duce results soon­er than wait­ing for your organ­ic search engine opti­miza­tion to kick in.

When you’re talk­ing about tar­get­ing peo­ple who are not even in the aware­ness stage of their buy­er jour­ney, you should expect longer sales cycles for these leads, but per­haps you end up with more leads because you’re bring­ing into your pipeline peo­ple who would not have found you on their own had you not tar­get­ed them and con­nect­ed with them.

Advantages, Risks And Expected Results From Inbound Marketing Tactics

Inbound mar­ket­ing is about being vis­i­ble when prospects are look­ing for infor­ma­tion relat­ed to your company’s prod­ucts or ser­vices. They are already aware and you need to be found when they start look­ing. This means inbound is an aware­ness stage mar­ket­ing method­ol­o­gy.

Advan­tages: One of the biggest advan­tages is that you’re build­ing a sys­tem that should rede­fine how you mar­ket your com­pa­ny, one that runs over time to pro­duce a steady stream of peo­ple who want to talk to you with­out you hav­ing to con­tin­ue to pump mon­ey into adver­tis­ing. Instead of rent­ing atten­tion, you’re earn­ing atten­tion. It does not require the same lev­el of invest­ment as demand gen­er­a­tion or adver­tis­ing, so it’s a more eco­nom­i­cal option and every aspect is high­ly quan­tifi­able. Over time it becomes more and more effi­cient.

Risks: It’s very com­plex. Plan­ning it, build­ing it and opti­miz­ing it takes exper­tise. If you don’t have the exper­tise, it’s going to be hard to get inbound to pro­duce results in the short term. It takes time because you have to strate­gi­cal­ly plan it, build out the assets and then opti­mize each tac­tic. Don’t expect a lot from it for the first six months (at a min­i­mum). In most cas­es, clients see a high lev­el of per­for­mance in the sec­ond year.

If this is your first time plan­ning, build­ing and grow­ing an inbound pro­gram, you’ll prob­a­bly make a few mis­takes. You can mit­i­gate this risk by get­ting some­one with a lot of expe­ri­ence to help you skip those pot­holes and pro­duce results more quick­ly.

Inbound is lim­it­ed to only those peo­ple who are active­ly look­ing for what you do. You have to be OK with that fact. This means the uni­verse of poten­tial prospects is going to be small­er when you prac­tice inbound than if you’re tar­get­ing and going after any­one who fits the bill regard­less of inter­est, like demand gen­er­a­tion does.

Expect­ed Results: Your expec­ta­tions should be more ori­ent­ed around a marathon. With inbound, it’s going to take time, but the results will build. Month over month, you’ll see more vis­i­tors, high­er con­ver­sion rates and more leads. The more you invest in the cre­ation of assets and the opti­miza­tion of the pro­gram, the bet­ter the results. Inbound leads cost 61% less than demand gen­er­at­ed leads because the mon­ey is invest­ed into peo­ple who are already look­ing for you, as opposed to peo­ple who are not. It might take longer, but it’s going to cost less.

I’m not try­ing to make a per­sua­sive argu­ment for one type of mar­ket­ing over the oth­er. I think that in some cas­es demand gen­er­a­tion is the per­fect play and in oth­er cas­es inbound makes more sense. Late­ly we’ve been see­ing a lot of suc­cess­ful client pro­grams using both in very strate­gic and thought­ful ways. Account-based mar­ket­ing is a pro­gram that uses some very per­son­al, direct demand gen out­reach at the top of the prospect pyra­mid and more inbound tech­niques as you tar­get low­er-lev­el prospects.

I think it’s safe to say that most com­pa­nies want to be found organ­i­cal­ly on Google, and by run­ning a pay-per-click cam­paign, they get the vis­i­bil­i­ty need­ed while wait­ing for the organ­ic lists to per­co­late up to the top of the rank­ings. You can earn email address­es by pub­lish­ing won­der­ful con­tent and you can buy email address­es, too. By cre­at­ing con­tent for both, you nur­ture the peo­ple who already know you, and you can bring new peo­ple into your ecosys­tem at the same time.

For me, it comes down to bud­get. If you can afford to invest in every­thing, there is a lot to choose from. If you have to be more selec­tive, then you need to match up your rev­enue goals, expect­ed results and bud­get to make sure all three of those expec­ta­tions are aligned. Don’t expect to dri­ve mil­lions of dol­lars in incre­men­tal rev­enue for $2,000 a month in mar­ket­ing spend. If you want to dri­ve a Mer­cedes, you have to pay for the Mer­cedes.

Demand gen­er­a­tion or inbound mar­ket­ing? The choice comes down to your busi­ness goals, mar­ket­ing bud­get and lev­el of exper­tise. Under­stand the plus­es and minus­es of both and make a deci­sion that’s right for your com­pa­ny, your prospects, and your mar­ket­ing team.