Looking to optimize your Google Ads campaigns? As Google Ads continuously evolves, knowing which campaign type suits your objectives is key to driving both immediate results and long-term growth.
Using the right PPC research tools can help guide your strategy, but you need to understand the differences between Performance Max vs. Demand Gen is essential. Both have their strengths, serving different campaign goals to boost your marketing results.
Whether your goal is improving conversions or expanding business reach, we’ll show you how to leverage both strategies to get the most from your paid media campaigns!
Let’s kick things off! 👟
What is Demand Gen?
Demand Generation (Demand Gen) campaigns are designed to engage potential customers at the top of the marketing funnel, focusing on brand awareness and consideration.
Building upon the foundation of Discovery campaigns, Demand Gen utilizes multi-format ads across Google’s Display Network, including YouTube shorts and videos, Gmail, and Discover, to create a cohesive storytelling experience. These campaigns aim to nurture prospects by sparking interest and generating demand for a product or service.
With automated targeting features like Lookalike audiences, Demand Gen expands your reach to users who resemble your ideal customers, helping you attract new leads.
Demand Gen Benefits and Features
Demand Generation campaigns focus on building brand awareness and nurturing leads at the top of the marketing funnel.
- Visual and Immersive Placements: Ads appear across Google’s high-impact platforms like YouTube, Discover, and Gmail to capture attention.
- Multi-Channel Reach: Engage audiences across various Google properties to maximize exposure.
- Content Marketing: Create valuable, engaging content to attract and nurture potential leads.
- Lead Scoring: Prioritize leads based on their likelihood to convert, focusing on high-potential prospects.
- Audience Understanding: Refine your target audience with data insights to improve campaign targeting.
- Data-Driven Decision Making: Optimize campaigns using performance data to make informed decisions and enhance results.
Demand Gen Pricing
For Demand Gen campaigns, Google recommends a budget of at least $100 per day per campaign or 20 times your expected average conversion value/tROAS, whichever is higher.
What is Performance Max?
Performance Max is Google’s most advanced automated ad campaign, designed to help businesses reach potential customers across all Google platforms, including Search, Shopping, Display, YouTube, Gmail, Discover, and Maps.
Instead of manually selecting ad placements, you provide assets like headlines, images, and videos, set your goals, and let Google’s AI take care of the rest.
Launched in 2022 as a replacement for Smart Shopping, Performance Max uses machine learning to optimize bidding, placements, and audience targeting.
It doesn’t rely on keywords but instead leverages audience signals to find users who are most likely to convert.
Performance Max Benefits and Features
Performance Max is fully automated, utilizing AI to optimize various aspects of your campaign based on your set objectives:
- Goal-Based Optimization: Focuses on driving conversions aligned with your specific goals, such as sales or leads.
- Automated Bidding and Budgeting: Real-time bid adjustments are made for optimal performance using Smart Bidding.
- Cross-Channel Reach: Expands your ad visibility by displaying them across Google’s extensive network.
- Asset Groups: Dynamically tests and improves performance by mixing text, images, and videos.
- Audience Signals: Uses your data to fine-tune targeting and reach the most valuable customers.
- URL Expansion: Directs traffic to the most relevant pages and tailors headlines according to user and keyword intent.
Performance Max Pricing
Performance Max campaigns typically have a lower CPC than the average Google Ads rate, with an average CPC of $0.68, compared to Google Ads’ $0.85.
With a conversion rate of 1.83%, close to the 1.96% Google Ads average, its AI-powered optimization can help maximize campaign efficiency.
Demand Gen vs Performance Max: Key Differences Explained
Let’s break down the real differences between Performance Max and Search Ads, how they work, where they win, and which drives better results.
Plus, we’ve got a strategy to help you get the best ROAS, no matter which one you choose.
1. Targeting Capabilities
Demand Gen offers more traditional targeting where you can set specific parameters, such as targeting those aged 35+ who recently searched for HVAC services.
It also allows for targeting lookalike audiences and excluding both first-party and lookalike audiences.
Performance Max relies on audience signals provided by advertisers, but it doesn’t allow for fixed audience targeting.
Google’s AI extends beyond the set parameters, targeting those likely to convert, even if they don’t meet the exact criteria.
Winner: Demand Gen
Demand Gen offers more control over audience targeting compared to Performance Max, allowing manual selection or exclusion of specific audiences for more precise reach.
2. Placements and Channels
Demand Gen focuses on reaching potential customers through highly visual channels. Ads are shown on platforms like YouTube, Gmail, and the Discovery Feed, driving awareness and demand generation.
- Platforms: YouTube, Gmail, Discovery Feed, Google Video Partners
- Focus: Visual-driven demand generation
- Targeting: Manual audience targeting options available
Performance Max ads reach a broader audience across all Google platforms, including Search, Shopping, YouTube, Gmail, Discover, Display, and Google Maps (we recommend to also use local SEO tools for location-based strategies). It utilizes AI to optimize ad placements based on business goals, targeting a wider range of users.
- Platforms: Search, Shopping, YouTube, Gmail, Discover, Maps, Display
- Focus: Optimized for conversions across multiple channels
- AI-driven: Audience signals used for machine learning
Winner: Performance Max
Performance Max offers broader reach across multiple Google platforms, enabling advertisers to maximize visibility and conversion opportunities by leveraging a full inventory coverage strategy, unlike Demand Gen’s narrower scope.
3. Reporting
Demand Gen offers detailed reporting that provides in-depth insights into campaign performance, allowing for granular adjustments. It enables advertisers to analyze placement, audience performance, and other specific metrics, giving them control over optimization.
- Detailed audience and placement insights
- Provides more granular data for manual adjustments
- Ideal for advertisers seeking hands-on management and analysis
Performance Max reporting is intentionally limited to prioritize automation and performance. It offers minimal data on placements, audience, and creative performance. The search terms and placement reports are quite limited, focusing more on efficiency.
- Limited visibility on placements and audience insights
- Focus on automation and AI optimization
- Reduced reporting for broader, performance-focused goals
Winner: Demand Gen
Demand Gen offers more detailed reporting tools with actionable insights, allowing advertisers to closely analyze placements and audience performance for precise campaign adjustments, which is ideal for those seeking control over their campaigns.
4. Control
Demand Gen provides advertisers with more control over their campaigns compared to Performance Max.
With Demand Gen, you can manually adjust ad placements, refine audience targeting, and opt out of AI optimization. This goves you greater control over where and how your ads appear.
Performance Max, on the other hand, relies heavily on automation, offering less control over specific placements and targeting.
The system optimizes campaign performance with minimal intervention from the advertiser, focusing on efficiency rather than granular control.
Winner: Demand Gen
Demand Gen offers greater control over placements and targeting. This makes it more suitable for advertisers who prefer a hands-on approach and want to manage their campaigns with precision.
5. Goals
Demand Gen prioritizes control and lead quality, making it ideal for advertisers who want to push users further down the funnel.
It excels at upper-funnel initiatives like brand awareness and engagement, using visually engaging ads across YouTube, Discover, and Gmail.
Performance Max is designed for scale and efficiency, using AI to maximize conversions across Google’s full inventory.
It automates bidding and targeting to optimize for lower-funnel goals, ensuring ads reach high-intent users across multiple platforms.
Winner: No clear winner
Choosing between Demand Gen and Performance Max depends on your goals. Neither is the ultimate solution for maximizing conversions and return on ad spend, each has strengths, but a fully optimized strategy often requires using both effectively.
Demand Gen vs Performance Max? Search Ads is More Effective Thanks to AI
Search ads are keyword-targeted ads that appear on Google when users actively search for products or services.
Compared to Demand Gen and Performance Max, search ads boost your ROAS by focusing on high-intent users. They don’t waste budget on broad targeting or uninterested audiences, making them the smarter investment for direct conversions.
For example, search ads convert at around 4.2%, way higher than display ads at just 0.55%. 🤯
That’s because they reach people actively searching for what you offer, making them far more likely to buy. In some industries, conversion rates even hit 10%, driving fast, efficient sales.
Want even better results? OTTO Google Ads automates the hard work, optimizing your campaigns for maximum performance and higher returns with minimal effort.
What is OTTO Google Ads?
OTTO Google Ads, powered by Search Atlas, removes the guesswork from running Google Ads. It automates keyword selection, campaign structuring, and ad copy creation.
It automates tasks and delivers better results for search ads, surpassing Demang Gen and Performance Max without wasted budget.
Which Tasks Does OTTO Google Ads Handle for You?
OTTO Google Ads handles everything from campaign setup to keyword research and ad creation, ensuring your ads hit the right audience effortlessly.
For example, unlike Performance Max, which prioritizes Google’s profits, OTTO Google Ads is designed to maximize your ROAS.
How OTTO Google Ads Optimizes Your Ad Strategy
By syncing with your website and Google Ads account, OTTO Google Ads leverages advanced AI to fine-tune your campaigns, improve targeting, and optimize performance.
It gives you full control while eliminating the manual workload.
OTTO Google Ads Pricing
With OTTO Google Ads, you get smarter automation at a lower cost. It cuts unnecessary ad spend while driving higher returns, making search ads more profitable than ever.
| Starter plan | Growth plan | Pro plan | Enterprise | |
|---|---|---|---|---|
| Price | $99 monthly | $199 monthly | $399 monthly | Custom |
| Free OTTO SEO Activation | 1 | 1 | 3 | Custom |
| User Seats | 2 | 3 | 5 | Custom |
| GSC Sites | 5 | 15 | Unlimited | Custom |
| GBP Accounts | 3 | 10 | 25 | Custom |
| Regular AI Quota | 100 | 250 | Unlimited | Custom |
Surpass Demand Gen and Performance Max with Smarter Ads
Demand Gen and Performance Max each have their place depending on your goals, but if you’re looking for the best ROAS and conversion rates, they fall short.
Search ads, on the other hand, target users actively searching for what you offer, leading to a much higher conversion rate of 4.2% (or even over 10%), compared to just 0.55% for display ads.
With OTTO Google Ads, you’re not just automating your ad campaigns, you’re unlocking their full potential. 🚀
OTTO helps you leverage search ads’ high conversion rates and even surpass them by optimizing your strategy with AI. You’ll increase conversions, save time, cut unnecessary costs, and get better results with less effort.
Why aren’t you maximizing your ROAS yet? Get started for free today with our free trial. No commitment, cancel anytime!
