Account Based Marketing vs Demand Generation: Differences, Commonalities & Use-cases

Account Based Marketing (ABM) and Demand Generation often go head-to-head as top marketing strategies. But which one is right for you?

The choice isn’t quite simple. You need to understand what makes each strategy unique, how they work together, and what impact they can have on your returns. 

In this guide, we’re discussing ABM and demand gen to understand their differences, similarities, and potential benefits. We’ll also look at how analytics tools help understand the performance of each for better execution. Let’s get started.

TL;DR;

• ABM focuses on targeting specific high-value accounts with personalized content, aligning sales and marketing for a cohesive approach.
• Demand Generation aims to create broad awareness and interest, guiding potential customers through the sales process.
• Key differences include focus, approach, ROI, sales alignment, content strategy, and ideal use cases.
• Metrics for ABM include Engagement Score, Pipeline Contribution, and Conversion Rate. 
• Metrics for demand generation include the Number of Leads, Cost per Lead, and Sales Cycle Length.
• Tools like Factors can enhance both strategies, offering insights into segmentation, user journey mapping, and performance measurement.

What is Account-Based Marketing?

Account-based marketing or ABM is a targeted strategy where marketers prioritize one or a few businesses(accounts) instead of trying to attract their total addressable market. All the marketing resources are allocated to converting just one or a few accounts at a time. This is in stark contrast to regular marketing where campaigns are created for mass appeal. With ABM, you look at visitors as part of an account and create personalized campaigns tailored to their unique needs. Answer questions like: 

• What’s the visitor’s industry? 
• What business are they associated with? 
• What are the pages people within this business/industry have shown interest in? 

Let’s take an example:

Say you want to onboard a SaaS startup as a new customer. You decide to use ABM. With a marketing analytics and account intelligence tool like Factors, you identify the industry and businesses your visitors are associated with. 

As you segment accounts, patterns show that your target accounts repeatedly visit a specific feature page. With this information, you can now retarget the accounts via emails, content, and ads highlighting this feature further.

So, instead of focusing on the entire industry or a persona, your efforts are targeted, and more importantly — backed by data. You can even attribute revenue to your ABM campaigns to maximize the results.

Demand generation, on the other hand, takes a different approach.

What is Demand Generation?

Demand generation is a strategy for creating awareness and interest in your products or services. Rather than collecting leads or targeting accounts, demand gen uses tactics to nurture potential customers through the buyer journey.

It isn't just about attracting leads. It's about mapping out a strategic path to turn interest into action from potential customers from initial awareness all the way to conversion.

Let’s take an example:

Say a B2B SaaS company launches a new software feature. They could use Demand Gen to promote it. They might start with blog posts, webinars, and social media content explaining the feature's benefits. As interest grows, targeted emails and personalized follow-ups help guide prospects toward buying.

The goal of demand generation is building steady demand for a product. By aligning marketing and sales, you create a smooth journey for potential customers. This keeps your brand top of mind when they're looking for a solution.

Account Based Marketing vs. Demand Generation: Key Differences

Before we jump into the details, let’s take a quick glance at the differences between account-based marketing and demand-generation.

ABM vs Demand Gen - Approach

Account-Based Marketing (ABM) and Demand Generation are two strategic approaches in the B2B marketing space. Although they both aim to generate revenue, their methodologies and goals vary significantly.

Account Based Marketing (ABM) targets specific, high-value accounts with personalized messaging across different channels. With ABM, you are targeting accounts that are already looking for a solution. These are generally near the bottom of the funnel. So, you do not need high-level content. Simply segment your targets by common factors, then craft experiences tailored to each segment.

For example, a CRM SaaS company wants to bring on big healthcare providers. Using a tool like Factors, they can de-anonymize and segment accounts based on the pages and features each account engages with. Then, they can create hyper-personalized content that speaks directly to those accounts.

Demand generation casts a wider net where the goal is driving awareness and interest from a broad audience, not just targeting select accounts. You want your customers to remember your brand when they begin to actively look for solutions. 

If that same CRM SaaS company used demand gen, they'd create content and initiatives aimed at a buyer persona instead of a specific business/account. With the persona in mind, they could host webinars, write blog posts about CRM benefits in general, or launch broad ad campaigns. This attracts a wide range of potential customers.

Sales and Marketing Alignment

The partnership between sales and marketing teams is super important for both Account-Based Marketing (ABM) and Demand Generation. But the way they work together is really different.

With ABM, sales and marketing collaborate closely to find, target, and connect with the right accounts. They join forces to create customized plans, messaging, and content that speaks to each account's specific needs and challenges. 

Imagine a B2B software company selling a banking solution to financial companies. The ABM approach would have the sales and marketing teams analyze the finance industry, identify key companies that could benefit from the solution, and develop targeted campaigns. Here, the sales team provides insights into a company's unique needs and marketing creates custom content to ensure a strategy that directly speaks to the target audience.

Demand Generation has a more linear relationship between sales and marketing. Marketing is in charge of building general awareness and interest. Once leads are created, the sales team takes over to go after those opportunities. 

If that same software company uses demand generation, marketing might run broad campaigns about all features or a general benefit of the tool. The content is then catered to everyone that fits their persona and their pain points. When interest is sparked, the sales team steps in to qualify and nurture those leads towards conversion.

Content Strategy

Content strategy plays a central role in marketing, but how it's applied differs quite a bit between account-based marketing (ABM) and demand generation.

As part of ABM, the content is personalized, like a tailored suit stitched to fit an individual client. It zeroes in on the specific needs, pain points, goals, and decision-making processes of each target account. 

Suppose a B2B cybersecurity firm wants to land major banks as customers. Their ABM content would be custom products — whitepapers, banking incident reports, interviews with top bankers, etc. — laser-focused on the unique security challenges and regulations faced by the financial industry. This tailored approach helps the content resonate more deeply, demonstrating an intricate understanding of that particular audience's needs. 

Demand generation creates content with broad appeal, touting general benefits rather than customized solutions. Here the focus is on establishing the brand as a thought leader and go-to industry resource. 

If running a demand-gen campaign, our hypothetical cybersecurity firm would publish ebooks, blogs, and podcasts about cybersecurity trends, best practices, and insights useful to businesses across industries. This positions them as trusted experts, laying the groundwork for future engagement with various audiences across industries.

Metrics for Account Based Marketing vs Demand Generation

Tracking the right metrics gives you real insights into what's working and what needs tweaking. ABM and demand generation measure totally different things since they have different strategies. 

What ABM Metrics Should You Be Tracking?

While there are many ABM metrics that you need to keep an eye out for, here are some of the important ones. 

Engagement Score — This tracks how much your target accounts interact with your content across channels. Are they spending time on your site, clicking links, or engaging on social media? Having access to this kind of information is very helpful for seeing what content resonates so you can personalize more.

With Factors, you have the ability to bring together data from across different platforms on a single dashboard.

The customizable dashboards and reports on Factors can help you understand:

• if your ABM campaigns are reaching the right people 
• If they’re conveying the message well enough so your target accounts interact with the content

Pipeline Contribution — What percentage of sales opportunities come from account-based efforts? This directly connects marketing to revenue. You can see specific deals influenced by account-based campaigns. It's great for understanding ROI and aligning with sales.

Through Factors, you can track specific opportunities that originated or were influenced by ABM campaigns. 

Suppose you have multiple ongoing ABM campaigns including email, paid ads, and social media. 

Factors tracks and provides data give you a full view of your ABM performance and helps in understanding the ROI of ABM and aligning marketing with sales goals.

Conversion Rate — What percentage of targeted accounts move to the next stage towards becoming customers? Are your accounts going from leads to qualified leads? This shows how well your targeted content prompts the actions you want. Critical for evaluating personalization.

With custom reporting features on Factors, you can create a full conversion funnel, identify all the campaigns bringing in leads, and more. 

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What Demand Generation Metrics Should You Track?

Let’s now look at the set of metrics that you need to track for demand generation campaigns. 

• Number of Leads — How many new leads are you generating through marketing? Quantity indicates if demand efforts are working initially. Starts you on lead nurturing and qualification.
• Cost Per Lead — What's the average cost to acquire each lead? Total spend divided by lead volume. Helps weigh marketing efficiency and guide budget.
• Sales Cycle Length — How long does it take on average for a lead to become a customer? From initial interest to closed deal. Shows how smoothly leads move through the sales process. Reflects both marketing and sales effectiveness.

With Factors, you can create unified views of your sales and marketing data.It helps you easily track key demand generation metrics like leads, cost per lead, and sales cycle length. 

With this, you gain clear insights to optimize your campaigns, processes, and spend for maximum ROI without spending time switching tabs or tools. 

Should You Use Demand Gen or Account Based Marketing?

The choice between demand gen and ABM depends on a few key things.

• Business Size: If you're a large company targeting specific high-value accounts, ABM could be a good fit since it's more personalized. Smaller businesses that want broad awareness might prefer demand gen instead.
• Industry: Industries where relationships matter more, like business services, may benefit more from ABM's tailored approach. But industries that need mass outreach could be better off with demand gen.
• Product Complexity: Complex or specialized products that need explaining may also call for ABM's account-specific focus. Products with widespread appeal are likely better suited for demand gen's broad reach.
• Target Audience: It also comes down to knowing your target audience and what will resonate. If you need to cater to particular accounts' unique needs, ABM is probably the way to go. But if you have a more general audience, demand gen can cast a wider net.

You could even use both the strategies together to cover all bases. The key is matching the strategy to your goals and who you're trying to reach so you can create maximum impact with minimal resource wastage.

What Strategy Would You Choose?

We've explored the unique strengths of each strategy, compared their differences, and seen how they can precisely target leads or cast a wider net for brand awareness. 

So whether you want to create personalized experiences with ABM or prioritize brand awareness with Demand Generation, we hope this guide will help you make the right decisions. 

Factors helps you simplify the path to executing successful marketing strategies. You can understand and track demand gen metrics and ABM efforts, aligning them with your unique needs. From segmentation to journey mapping, Factors is your secret weapon to master both strategies and measure campaign performance.

Ready to take your marketing up a level? Check out Factors today and discover how you can leverage ABM and Demand Generation to drive growth and success.