Growth marketing, demand generation, inbound: a single trade-off
Growth marketing, demand generation and inbound are three names for a single budget trade-off: what share goes to capturing the buyers already in-market, and what share to staying in the memory of those who are not yet there. The first group represents about 5% of the market.
- The Ehrenberg-Bass Institute estimates that about 5% of B2B buyers are in-market at any given time. The other 95% will not buy for months or years.
- The calculation comes from the replacement cycle: a company switches suppliers roughly every five years, which puts 20% of the market in a position to buy over a year.
- Most budgets cut too early come from this: significant sales are expected within the first weeks, while the real cycle runs in months.
- You do not bring a buyer in-market. They enter it through their own need, and then choose the brand they remember.
- The author of the figure states himself that it is an order of magnitude, not a precise rule.
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Out-of-market buyer
An out-of-market buyer is a company or a person who fits your target audience but has no active need to fill at the moment your message reaches them. They already own what you sell, are tied to a contract, or do not plan to replace it for several years. According to the work of the Ehrenberg-Bass Institute, this category represents about 95% of a business market at any given time. No advertising brings them in-market: they enter it through their own need.
Three labels, one budget question
Growth marketing presents itself as a culture of continuous experimentation across the whole customer journey. Demand generation presents itself as creating interest upstream. Inbound presents itself as attraction through content rather than interruption. All three are defensible, and all three dodge the same question: what share of the budget goes where.
This question has a numerical answer. Professor John Dawes, of the Ehrenberg-Bass Institute, starts from a simple observation: a company switches suppliers roughly every five years. That puts 20% of the market in a position to buy over a year, and about 5% over a quarter. The remaining 95% are not indifferent, they are out-of-market.
The uncomfortable point: you do not persuade a buyer to come in-market. A manager who has just signed a three-year contract will not change their mind because your message is convincing. What advertising does is build and refresh the brand's memory, so that it comes to mind at the moment the need appears. Yet many management teams expect commercial returns within the first weeks of a campaign, a horizon unrelated to this cycle.
Two management tools round out this framework: marketing mix modeling at the scale of an SMB, and the specific case of construction companies.
What to settle before choosing an approach
The gap between the real buying cycle and the horizon over which a budget is judged is the first cause of premature cuts. A campaign judged over two weeks when the market renews over five years is judged on noise, and the money already spent is lost the moment it is cut.
- What is our real replacement cycle, and what share of the market can buy this quarter?
- What share of the budget captures existing demand, and what share prepares it?
- Over what horizon do we judge the second share, and who accepts that horizon in writing?
- Are our competitors already capturing the 5%, and at what cost per customer?
- If the acquisition cost has not fallen after that horizon, what do we cut?
The answer that holds up puts a number on your replacement cycle before proposing a split. A hollow answer sells a named method, promises qualified opportunities from the first month, or treats the 95% out-of-market as a target to convert.
Deciding the split between capturing demand and preparing it is a trade-off settled on your real cycle and your acquisition cost. A 90-minute consultation settles it, with a written summary your team can execute.
How to split the budget in practice
The split depends on your position, not on a universal rule. Three situations cover the majority of cases.
| Situation | Budget priority | What would be a mistake |
|---|---|---|
| Unknown brand, strong existing demand | Capture first, the demand is already there | Funding awareness before knowing whether the offer converts |
| Known brand, rising cost per customer | Prepare, competitors are bidding up the same 5% | Responding by raising bids |
| New category, no one is searching | Prepare, there is nothing to capture | Buying keywords with no volume |
The second row is the one that comes up most often in meetings. When every competitor targets the same 5%, the cost per customer rises mechanically for everyone. Responding with higher bids buys volume at a price that destroys the margin. The way out runs through the 95%, and it is slower. The calculation of the advertising break-even point is detailed in the move from reported ROAS to actual profit.
What stays in-house: the real replacement frequency in your sector, the list of reasons that trigger a supplier change among your customers, and the margin that sets the maximum price of an acquired customer. What gets delegated: producing the content that builds memory, capturing existing demand, measurement and periodic reading. A company that documents why its last five customers changed suppliers gets a better split than a company that applies a rule read somewhere.
Measuring without fooling yourself
The two halves of the budget are not measured with the same tools, and trying to apply a single dashboard to both is the second cause of unjustified cuts.
Capture is measured in the usual way: cost per customer acquired, conversion rate, lost impression share. Preparation is measured differently: the share of requests that name you rather than search a category, the change in cost per customer over twelve months, and the length of the sales cycle. These three figures move slowly, and that is normal.
Professor Dawes states himself that the 95% is an order of magnitude meant to carry an idea, not a precise rule. A vendor who builds a plan costed to the dollar on this proportion is misusing it. What to take from it is the direction: the vast majority of your future buyers cannot buy today.
The indicators that change a decision are detailed in marketing indicators, building brand memory in branding, and budget framing in splitting the budget across channels. The specifics of the buying group are covered in what makes a B2B buying cycle different.
Stepping up a level rather than bidding up the same demand is at the heart of the Generate demand and growth goal.
Already running a marketing team? See how we plug in as reinforcement on paid advertising.
Frequently asked questions about growth marketing
What is the difference between growth marketing and demand generation?
They are mostly two vocabularies. Growth marketing emphasizes continuous experimentation across the whole journey, demand generation the creation of interest upstream. The real trade-off they cover is identical: what share of the budget captures in-market buyers, and what share prepares the others.
Where does the figure of 5% of in-market buyers come from?
From the work of Professor John Dawes, of the Ehrenberg-Bass Institute. The calculation starts from a replacement cycle of about five years, which puts 20% of a market in a position to buy over a year and about 5% over a quarter. The author notes that it is an order of magnitude.
Can you create demand in an out-of-market buyer?
Not in the sense of making them buy now. A buyer comes in-market through their own need, when what they own reaches end of life or a contract ends. What marketing can do is increase the probability that your brand comes to mind at that moment.
Is inbound still relevant?
Yes, as a means rather than a doctrine. Producing useful content serves both capture, by answering the questions of active buyers, and preparation, by building familiarity among the others. What has aged is the idea that it alone is enough to fill a pipeline.
- Ehrenberg-Bass Institute for Marketing Science, The 95:5 rule is the new 60:40 rule, accessed July 2026.
- Ehrenberg-Bass Institute for Marketing Science, The 95:5 Rule: Why B2B Growth Starts Long Before the Purchase, accessed July 2026.
- John Dawes, Ehrenberg-Bass Institute, The 95:5 Rule, original text published in 2021, including the author's clarification on the scope of the figure.
Gabriel almost always takes your first call and carries out your audit. He builds the strategy starting from your growth goal: where to put your budget, which market to test and how to connect each lead to a real sale in your CRM. He mainly leads engagements for three goals: Optimize the profitability of your digital campaigns, Develop a new market, and Generate demand and growth. With Geneviève, he also works on organic search (SEO), AI visibility (GEO) and conversion rate optimization (CRO). The sales a Google Ads or Meta Ads campaign brings in depend on the page that receives the click. He writes mainly about marketing strategy, paid advertising and measurement.
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