What Is Demand Gen?

Demand generation is the new buzzword.

But I feel like people don’t understand what it actually is.

It’s just thrown into conversations because it sounds good and people misuse the term.

So I’ll try to explain it with an example:

There is creating demand and capturing demand.

Let’s say you’re a Google Ads agency.

You help companies set up and manage Google Ads. So you have a solution that solves a problem.

And there is a certain pre-existing demand for your solution.

There is a certain amount of people and companies who know about Google Ads, consider them a good idea, and are looking for people or agencies to help them set them up and manage them.

But this demand is limited. So you have to fight with all the other Google Ads agencies over it to try to *capture* it.

That’s what “demand capture” is.

It leads to the marketing activities we see all the time: lead gen ads, promotional email sequences, content and ads where compare compare themselves to competitors (“we’re better/cheaper/faster/have more features/etc”)

Now, *generating* demand means that you increase the pool of people who are aware of Google Ads, think they are a good idea, and are actively looking for Google Ads services.

So it’s the activity of educating people who don’t know about your solution to the point where they start looking for it.

By educating people about how Google Ads drive business outcomes, eg. revenue growth.

For example, you can make videos about how Google Ads help companies improve their margins, how they help restaurants grow sustainably, how they outperform Facebook Ads, etc.

And if they learn the benefits of Google Ads from you, it’s natural for them to try to work with you.

But here’s the problem with creating demand: you can’t fake it.

For example, Google Ads is just one way to grow revenue. There are other ways to achieve the same outcome: Facebook Ads, LinkedIn Ads, cold email, organic TikTok, etc.

So, you’ll have to convince people that Google Ads is the best way to generate revenue relative to all the alternatives.

And that’s just not the case for many businesses because they’re still doing the same thing they did 20 years ago and there are now many alternatives that drive the same outcome but more efficiently and effectively.

That’s why most companies might talk about *generating demand* but never will, because it’s a deeper problem than a marketing problem – it’s a product problem.

That’s my best understanding of demand generation.