Mastering both Demand Gen and Performance Max (PMax) campaigns is about understanding how they work and what sets them apart. By getting to know each campaign type, it’s possible to incorporate both of them into your marketing efforts so that they work together to target the entire customer journey.
Demand Gen vs PMax: What’s the difference?
Whilst there are some similarities between Demand Generation and Performance Max campaigns, such as their ability to show ads across multiple placements, there are also key differences that set them apart.
Understanding these differences is crucial to using each campaign type effectively. As well as using them both at the same time.
1. Placements
One of the most prominent differences between Demand Gen and PMax campaigns is the placements. PMax campaigns can display ads on Search, Shopping, Display, Google Maps, YouTube, Discovery Feed, Gmail, and video. In contrast, Demand Gen campaigns only show ads on the latter four placements.
This overlap might lead some advertisers to believe that using PMax alone is sufficient since it covers a broader range of placements. However, excluding Demand Gen from your PPC strategy might mean missing out on opportunities on offer with Demand Gen.
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2. Customer Journey
Another key difference between Demand Gen vs PMax is the stage of the funnel they target. Demand Gen is designed to target mid-funnel users, nurturing prospective leads and customers who are higher up the funnel. As the name suggests, their purpose is to generate demand.
PMax campaigns, on the other hand, target users at the bottom of the funnel who are ready to convert. This is evident in their placements, since Search and Shopping are typically bottom-funnel channels, while video placements that feature heavily in Demand Gen are generally for awareness and consideration.
3. Targeting
Demand Gen offers advertisers more freedom to manually select targeting criteria, such as placements, channels, and granular targeting options. For example, you can choose to advertise with video, select YouTube as the placement, and manually build an audience to target. This level of targeting control is not available with PMax.
PMax campaigns are fully automated, using all of the available placements and automatically selecting the best inventory to generate conversions. (The exception to this is when only a product feed is supplied, focusing the campaign on Google Shopping placements).
PMax targeting is based on audience signals built by the advertiser. Strong audience signals, incorporating robust conversion data and even first-party data, increase the chances of success. The key difference between the two is that there’s no way to manually manage PMax targeting, besides influencing audience signals.
4. Ad creation
Performance Max campaigns create ads automatically using ad assets supplied by the advertiser, making it crucial to use high-quality assets. Google finds the most effective ad combinations and optimizes them accordingly.
One of my go-to PMax structures involves building multiple asset groups based on product themes. For example, a homeware brand could group living room assets together in one asset group, and bedroom assets in another. This allows some influence over ad creation, ensuring the content stays relevant for users, though control is still limited.
With Demand Gen, advertisers have full control over creatives, uploading assets and previewing ad combinations before launching. You can also tailor creatives to each placement, such as uploading separate YouTube ads for in-feed, in-stream, and shorts.
When to use Demand Gen vs PMax
Understanding the differences between Demand Gen and PMax campaigns will help you choose the right one based on your needs and goals. This choice may depend on your preference for certain placements, the need to target specific stages of the funnel, or how much control you’re willing to sacrifice.
When to use Performance Max
Consider the following to determine if Performance Max campaigns are right for you.
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Full-Funnel marketing
PMax is excellent for full-funnel marketing, allowing you to reach consumers at all stages. However, it should prioritize driving conversions, making it ideal for full-funnel strategies with an emphasis on lower funnel activity.
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Diverse placements
If you want to branch out from Search and Shopping and experiment with Display and YouTube ads for instance, PMax is a great choice. It broadens your reach and supports a full-funnel approach, with easy setup and management due to its automation.
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Audience signals
PMax relies on audience signals to drive conversions. Ensure you have sufficient and accurate conversion data in your account. A minimum of 20 to 30 conversions per month is recommended for a single PMax campaign, although the more the merrier when it comes to data.
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Ecommerce and Revenue Tracking
PMax is best suited for ecommerce brands that track revenue data, but it can also be effective for lead generation accounts that also have enough data to warrant PMax campaigns.
When to Use Demand Gen
Demand Gen campaigns may be better suited for scenarios where having more control over your campaign is important. Lack of control is one of the main challenges (and criticisms) of PMax, therefore in instances when control is a necessity, choose Demand Gen.
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Manual control
Demand Gen allows you to manually manage creatives, placements, and targeting. If you have specific advertising goals or prefer hands-on management, this campaign type is ideal. You may also want to experiment with Lookalike audiences, which are new to Google Ads and very similar to Lookalikes in Meta Ads.
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Targeted placements
Demand Gen campaigns are limited to YouTube, Discovery Feed, Gmail, and video partner sites. If you aim to reach users exclusively on these channels, Demand Gen is the right choice.
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Mid-funnel activity
Demand Gen is better suited for mid-funnel activities, as well as filling up the top of the funnel with new prospects. If your objective is to drive awareness higher up the funnel, Demand Gen might be a better option than Performance Max.
Why to run Demand Gen and PMax at the same time?
Running both Demand Gen and Performance Max campaigns simultaneously is beneficial for brands aiming to reach users at all stages of the funnel. Demand Gen is designed to engage new audiences higher up the sales funnel, while PMax focuses on driving lower funnel sales and leads.
This dual approach effectively expands your reach and broadens campaigns, contributing to new customer acquisition. It is particularly suited for large accounts with substantial budgets, where a portion of the spend is allocated to generating brand awareness. If Search and Shopping campaigns are already maximized, using both PMax and Demand Gen in your strategy could help generate even more from Google Ads.
With that in mind, it’s important to highlight that running Demand Gen may not be ideal for smaller accounts that have strict conversion targets. In this case, being a campaign type that’s better suited to awareness, it wouldn’t be the number one priority and I would instead master campaigns that target users with the highest intent.
How to master both Demand Gen and PMax
Using both Demand Gen and PMax campaigns together requires balance. These campaign types can complement each other rather than compete, especially in terms of placement, where PMax might otherwise cannibalize.
Let’s take a look at some strategies for a balanced approach.
Mid-funnel vs bottom-funnel
To prevent Demand Gen from clashing with PMax campaigns, keep Demand Gen focused on higher funnel advertising while PMax handles bottom funnel activity, with a focus on driving conversions.
Ensure Demand Gen placements, messaging, and targeting are tailored for users higher up the funnel. Let’s face it, Demand Gen hasn’t been designed to drive users from awareness straight to conversion, so the campaign should reflect that. Whereas PMax should be fully geared towards conversion-focused bottom funnel activities, through effective audience signals and well thought-out asset groups.
Complement PMax Shopping
Demand Gen works well alongside Search campaigns, targeting different stages of the funnel. This principle applies to PMax as well, particularly with PMax Shopping campaigns.
By only supplying a product feed within the PMax asset group, the campaign targets Shopping placements exclusively. This allows Demand Gen to target users through YouTube, Gmail, Discovery Feed, and other video placements, minimizing overlap with PMax, which is an effective way to minimize overlap between Demand Gen vs PMax.
‘Always on’ campaigns vs shorter campaigns
Treat Demand Gen and PMax campaigns differently in terms of ‘always on’ activity. PMax, being conversion-focused, should remain ‘always on’ to maintain performance and the continuous flow of conversion data.
Demand Gen campaigns, on the other hand, can be strategically switched on and off as needed, similar to paid social ads, tailoring messages for specific periods. Keep in mind Demand Gen’s learning period when adopting this approach.
Adjust Target CPA for Demand Gen
Adjust the target CPA for Demand Gen campaigns to optimize performance. Set the target to 2x your standard campaign performance to give the campaign space to find prospective audiences.
For instance, if your usual CPA is £15, set the Target CPA for Demand Gen to £30 (or more). The daily budget should also be 15x the Target CPA for optimal performance, which might be a deal breaker for accounts with smaller budgets. This is a general guide that advertisers should aim for, however, if you are unable to meet this requirement it may still be worth testing out Demand Gen.
Reporting and insights
PMax reporting has improved since its launch but still lags behind other campaign types like Demand Gen. Scripts can help bridge this reporting and analysis gap and are well worth the investment - Mike Rhodes is an industry favorite.
One strategy to also help with this is to use Demand Gen campaigns to test unique creative assets and gain deeper insights into creative performance. These learnings can then be applied to PMax campaigns, allowing the two campaign types to complement each other effectively.
Final word
The key to using both Demand Gen and PMax effectively is setting up the campaigns so they work together without overlap, avoiding PMax cannibalizing certain placements. This will help to prevent inefficient campaigns and poor use of budget.
Master both Demand Gen and PMax campaigns by targeting different stages of the customer journey while benefiting from each campaign type's unique features and capabilities. Demand Gen provides greater control over targeting, placements, and ad content, while PMax leverages machine learning to drive conversions.