This piece is part of a larger historiography series where I’m breaking down how modern marketing got to where it is, to actually understand the path we took so we can stop repeating the same mistakes under different names and frameworks. Read the previous historiography on how the MQL became the most important metric in marketing.
I was raised on demand generation as a marketing philosophy. I started my marketing career in 2007 during the rise of Salesforce, Eloqua, Marketo and the like. I believed the lead funnel was marketing, they were one and the same. I drank the Kool Aid hardcore.
Now I hate it, I think demand generation is ridiculous and has absolutely nothing to do with marketing. But yet and still it is the dominant “marketing strategy” in B2B organizations. How did we get here? Is there a better way or are we just doing demand gen wrong?
With all the irony in the world, demand generation came to prominence at the right time, the right place and to the perfect audience. Its rise came from a perfect cocktail of the ability to translate a complex issue into a simple framework, technological developments and a solution to real shift in consumer behavior.
If you want to understand how demand generation took over B2B marketing, you have to examine a sequence of very fortunate events. It was a stacking of conditions, each one pushing marketing closer to a system that prioritized growth, not necessarily “demand”. As a result, there was more emphasis put on an operating model rather than a true philosophical approach to marketing.
Before demand generation became a function, a job title, or a dashboard category, demand itself was a strategic question.
Philip Kotler’s framing around demand states is still one of the clearest ways to think about this, because it forces a level of discipline that modern B2B marketing often skips entirely, which is diagnosing what stage of demand you’re even dealing with from the start. Whether demand is absent, latent, declining, misunderstood, or misdirected before deciding what to do about it.
Kotler notes that marketing’s job is about managing demand (not creating it). Classifying your product into the correct demand state helps you pick the right strategy. For example, whether to educate the market, stimulate sales, or even discourage consumption.
If demand is latent, your job is education. If demand is misdirected, your job is repositioning. If demand is declining, your job is reinvention or exit.
And in a well-structured marketing organization, that work happens before anything resembling demand generation enters the picture. Because demand gen, in its proper role, is not responsible for figuring out whether the market cares, it is responsible for managing and accelerating interest once there is something worth responding to.
To understand why demand gen took over B2B marketing, you have to step into what B2B orgs actually looked like in the early 2000s, particularly from a sales perspective, because this is not a marketing-only story, it is a revenue system story.
B2B sales at the time was heavily relationship-driven, field-based, and dependent on outbound effort, referrals, industry presence, and a sales team’s ability to navigate complex buying environments where multiple stakeholders, long timelines, and internal politics dictated outcomes more than any single piece of marketing ever could.
A sales rep wasn’t closing a deal because someone clicked an ad. (I would argue, it’s still not, but that’s another rant for another day.)
They were closing deals because they knew how to work an account over months, sometimes years, building relationships, educating buyers, handling objections, managing risk perception, and helping a group of people arrive at a decision they could defend internally.
The problem was that this model didn’t scale cleanly, certainly wasn’t predictable and sales teams (and board members) wanted better inputs.
What if they could reduce the number of cold conversations and increase more informed ones?
What if they could walk into a meeting where the buyer had at least some context, some awareness, some recognition of the problem, instead of starting from zero every time?
At the same time, the internet was changing how buyers behaved.
People were researching online before engaging with sales. They were visiting websites, reading whitepapers, subscribing to emails, and leaving behind signals that didn’t exist in the old model.
Now marketing had access to activity, but no structured way to translate that activity into something sales trusted.
Sales still thought most “leads” were junk. Marketing still thought sales wasn’t following up properly.
Enter a consultancy focused on solving this very issue.
When SiriusDecisions was founded in 2001 by John Neeson and Rich Eldh, it was not built to invent demand generation as a philosophy of marketing. It was built to bring structure and fact-based thinking to B2B growth, particularly at the intersection of sales, marketing, and product.
Neeson and Eldh were trying to answer a fundamental question for B2B CEOs: “I gave you $20M, what did I get back?” (An extremely flawed premise IMO. I wrote about it here)
SiriusDecisions had a revenue and operations lens from the start.
It looked at how B2B companies actually grew, where they broke down, how functions misaligned, and how to create repeatable systems that executives could understand, manage, and improve.
A SiriusDecisions executive noted that back in 2000 that the focus of marketing was on volume and collecting business cards. The mentality was “throw them to sales and let them figure it out,” he said.
Around 2005, the thinking changed to “let’s provide quality to sales, not just quantity.” Now sales and marketing should collaborate on driving demand creation. Demand creation, meaning focusing on building awareness and educating a broad audience about a problem and a potential solution. He suggested marketing departments should create programs to help move sales forward. A “campaign in a box” to help build demand with their large accounts.
They had a sales POV from the start. The goal wasn’t to “fix” marketing, it was to aid sales. This frame is critical because it moved marketing away from being seen as an equal yet independent function from sales, into a sales support function.
They were telling organizations how to operate and giving a prescription to the problem. This is also why their work resonated.
At that time, B2B needed an operating system. The assumed problem was that sales and marketing didn’t share a model for how demand moved through the business.
The introduction of the SiriusDecisions Demand Waterfall in the mid 2000s changed everything, because it simplified coordination.
For the first time, companies had a structured way to define what happened between initial interest and closed business:
Inquiry becomes MQL (Marketing Qualified Lead).
MQL becomes SQL (Sales Qualified Lead).
SQL becomes opportunity.
Opportunity becomes revenue.
Now suddenly, a sales leader and a marketing leader could sit in the same room and talk about conversion rates, volume, leakage, and velocity using the same definitions instead of arguing about what a “lead” meant in the first place.
That was a game changer. The Waterfall forced discipline, definitions and seemingly accountability.
And executives loved it for a very specific reason. It made marketing feel forecastable (is that a word? I’m just gonna go with it.)
If you could measure how many inquiries turned into MQLs, how many MQLs turned into SQLs, and how many SQLs turned into pipeline, you could start to believe that revenue was not just a lagging outcome but something you could influence through inputs.
That belief became intoxicating and it what made the waterfall model become so dominate in B2B marketing and sales.
It didn’t even have to be fully true, it just has to be directionally useful.
The Waterfall gave B2B companies a conceptual system and Martech made that system executable.
With the rise of platforms like Salesforce, Marketo, and HubSpot, companies could now capture leads, track behavior, and score engagement. Theoretically track the buyers journey and how leads flowed through the funnel. Through automated follow-up, routing contacts to sales, and reporting pipeline contribution.
This is the moment where demand generation becomes infrastructure dictates how the organization runs. Marketing teams were reorganized around it and sales teams depend on it. It’s also how budgets get justified and careers got built.
Blink and you missed it but suddenly demand gen becomes the center of gravity for marketing.
From the late 2000s into the 2010s, a wave of companies built around subscription models, venture capital, and growth-first strategies shifted the way businesses thought about marketing entirely.
The playbook was simple, at least on paper. Acquire users at scale, lower the barrier to entry, grow the customer base, monetize over time and worry about profitability later. AKA the “growth model”.
This model worked for companies like Amazon, Netflix, and Uber. But for small to mid-size companies with niche audiences and limited budgets, not so much. A host of B2B SaaS firms prioritized expansion over immediate margin discipline. Every company was suddenly a tech company, from Airbnb to Tesla, believing that tech firms were allowed to get away with the “growth model”.
If the business goal is growth, then a system that creates visible growth, like demand gen, becomes incredibly attractive.
The business narrative doesn’t need to be on profitability, you just need more leads, more demos, more traffic. Things that indicate growth.
Once demand gen becomes the philosophy, everything else starts to bend around it.
Demand moves away from marketing analysis and becomes “lead flow.”
Understanding the customer moves away from marketing research and becomes “content consumption.”
Strategy moves away from supporting high level business goals and becomes “campaign planning.”
And marketing moves away from an independent function designed to reflect the market and build preference and becomes “sales and pipeline support.”
At this point, the organization is no longer asking, “What is happening in the market?” Now it’s asking, “What is happening in the funnel?” And those are not the same question.
Demand gen took over because it solved an immediate need. It was a way to align sales and marketing and track growth. But then that became the assumed purpose of marketing.
That is where things broke.
Demand generation is not the problem, in and of itself. It’s just very misplaced within B2B organizations. Demand gen should sit in the middle of the marketing system.
After business strategy defines how the company grows and after market strategy defines where the opportunity is. The brand and positioning also need to be defined.
Then demand gen has a place. It can help you capture interest. It can help you manage attention and convert readiness. But it cannot tell you why the market should care.
And when demand gen is the dominant marketing philosophy, that is the one question marketing forgets how to answer.
Follow Moni Oloyede at https://www.linkedin.com/in/moni-oloyede/
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