New research from CMO Huddles, the flocking awesome community of B2B marketing leaders, reveals a stark reality facing today’s marketing leaders: the relentless focus on demand generation (demand gen) has led to a “death spiral” that threatens long-term growth and stability. Despite diminishing returns, most B2B marketers remain stuck in a cycle of over-investment in demand gen at the expense of critical brand-building efforts.

Troubling Trends in Demand Gen Overload

In a recent survey of over 130 B2B marketing leaders shared insights into their budget priorities for 2025. The findings paint a concerning picture:

• 51% plan to increase their demand gen budgets, despite tepid results from similar investments in 2024.

• Only 22% aim to prioritize brand and reputation-building efforts—essential for fostering trust and differentiation in crowded markets.

• Demand gen hiring outpaces strategic investments, with 30% of marketers focusing on filling these roles while underinvesting in innovative skills like generative AI (10%) and data analytics (22%).

This unbalanced focus perpetuates short-term thinking, leaving critical opportunities for brand differentiation and customer trust on the table.

As Drew Neisser, Penguin-in-Chief of CMO Huddles, bluntly observed:

“Marketers are doubling down on demand gen — even when it clearly isn’t working. Meanwhile, they neglect the foundational work of building awareness, trust, and a differentiated brand. They are going down a rabbit hole that is only getting deeper.”

The Case Against Demand Gen as a Lone Strategy

While demand gen can help capture the 5% of prospects actively in-market, it neglects the 95% who are not ready to buy. The over-reliance on this tactic is compounded by inefficient spending on MarTech, which consumes up to 20% of marketing budgets but often remains underutilized.

The data shows the cracks in the foundation:

• Sales conversion rates are dismal, with success reported in just 20% of leads.

• Buyers frequently cite a lack of urgency and trust as reasons for disengagement.

Educating the C-Suite: A Critical Challenge

One of the biggest barriers to change is the mindset of CEOs, CFOs, and private equity (PE) firms. Too often, these stakeholders view marketing as a "gumball machine" that should generate immediate ROI, undermining efforts to build sustainable, long-term growth.

As Neisser warns,

“Increasing demand gen budgets guarantees even shorter tenure for already under-the-gun CMOs.”

Marketers must help their executive teams understand the long-term value of brand-building—an investment that pays dividends in trust, loyalty, and differentiation.

A Call to Action for B2B Marketers

B2B marketing is at a crossroads. The current demand gen-heavy approach is unsustainable and counterproductive. By refocusing on brand clarity, customer trust, and long-term strategies, marketers can reclaim their path to sustainable success.

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