Research shows that 81% of retail consumers look up products before buying online, and they find brands through demand gen channels more often than direct searches.
This major change in how consumers behave makes demand gen campaigns especially valuable to your marketing strategy. Google demand gen ads now reach up to 3 billion potential customers monthly through YouTube, Gmail, and the Google Discover feed.
Demand gen campaigns mainly focus on top-of-funnel awareness and getting people involved, unlike traditional search ads. Your products shine through visually appealing images, videos, and carousel ads that catch attention beyond regular search results.
Google’s Discovery ads completed their upgrade to Demand gen campaigns by the end of 2024, which opens new ways to reach your audience. You can build brand awareness or boost engagement with this step-by-step piece that shows you how to become skilled at Google Demand Gen ads – from initial setup to optimization.
What Are Google Demand Gen Ads?
Google Demand Gen ads show the rise of digital advertising that reaches potential customers before they start searching for products or services. These AI-powered campaigns use rich visuals to grab attention and spark interest across Google’s most popular platforms.
These campaigns pair striking visuals with smart placement to build awareness early in the customer’s experience. They work like digital billboards that show up where your audience hangs out online. This helps you connect with people during their free time when they’re open to finding new brands.
How Demand Gen is different from traditional search ads
Traditional search ads and Demand Gen campaigns work at completely different stages of the customer’s experience:
Intent vs. Discovery: Search ads target people who actively look for specific terms. Demand Gen reaches audiences based on their interests, behaviors, and demographics—whatever they’re searching for. This marks a change from capturing existing demand to creating new demand.
Format and Appearance: Search ads mainly use text and appear on search results pages. In contrast, Demand Gen campaigns feature rich visual formats like:
- Image ads with striking visuals
- Video ads (both short and long-form)
- Carousel ads for storytelling
- Portrait and square image formats
Placement Strategy: Rather than waiting for users to type keywords, Demand Gen ads appear across several Google properties:
- YouTube (including standard videos, Shorts, and in-stream)
- Google Discover feed
- Gmail promotions tab
- Google Display Network (in some cases)
Targeting Approach: Search campaigns rely on keyword research. Demand Gen focuses on audience targeting through first-party data, lookalike audiences, and interest-based signals. You can reach potential customers based on who they are, not just what they search for.
Measurement Focus: Search campaigns track direct conversion metrics. Demand Gen offers extra insights through Brand Lift, Search Lift, and Conversion Lift reports. These tools help track how ads affect brand perception, search behavior, and final conversions.
Why they matter for top-of-funnel marketing
Demand Gen campaigns have become crucial for several key reasons:
Changing Consumer Behavior: People now find products on many channels before buying. YouTube has become twice as likely as other video services to help research products and brands. Users also find YouTube ads 16% more trustworthy than ads on other video and social platforms.
Massive Reach Potential: These campaigns let you tap into Google’s huge user base—over 3 billion monthly active users across YouTube, Discover, and Gmail. YouTube Shorts alone gets more than 50 billion global daily views. The potential reach is huge.
Proven Consumer Action: Google reports that 63% of consumers find new products or brands on Google feeds. Among these users, 91% take action right away. This shows how well these ads work during the discovery phase.
Mid-Funnel Bridge: Demand Gen builds a crucial bridge in your marketing funnel. It helps you stay connected with users who aren’t ready to buy but want to learn about your products. You can shape their choices before they start searching specifically.
Complementary Strategy: Adding Demand Gen to your current marketing makes the customer journey more complete. Advertisers who added Google Display Ads to their Demand Gen or Video Action Campaigns saw 16% more conversions. This shows how these campaigns boost overall marketing results.
These campaigns are now essential tools for marketers who want to build brand awareness, reach new audiences, and create interest before competitors capture attention through traditional search advertising.
Where Your Ads Will Appear
Google’s Demand Gen campaigns show your ads in high-visibility spots throughout Google’s ecosystem. You need to know where these ads appear to create better assets and improve your campaign strategy.
YouTube placements
YouTube gives you the most options to place your demand gen ads, reaching up to 3 billion active users each month. Here’s where your ads can show up:
- YouTube Shorts – This vertical video format grows faster than ever, with over 50 billion views daily. Shorts ads play automatically with sound on, perfect to grab attention quickly. You’ll want to use the vertical 9:16 aspect ratio here.
- YouTube In-stream – These ads play before, during, or after longer videos. They start playing automatically and turn sound on when users interact. This placement lets you tell your brand’s story in an immersive way.
- YouTube In-feed – Your ads show up on the homepage, search results, and “Up Next” panel. The ads play automatically without sound, so you’ll need eye-catching visuals to get clicks.
- Additional YouTube spots – Your ads might appear in the Home feed, Watch Next feeds, and Search results. This broad coverage helps you reach users everywhere on the platform.
Google has added placement-level reporting that breaks down YouTube performance into In-Stream, In-Feed, and Shorts metrics. This detailed data helps you spot which spots work best for your goals.
Google Discover feed
The Google Discover feed shows users content based on what interests them and what they’ve searched for. Most users find it on Android devices, the Google app, and Google.com’s mobile homepage. This feed has become a key way for users to find new brands.
Your demand gen ads blend naturally with other content in Discover, making users more likely to notice them. In this placement:
- Video ads play automatically without sound when WiFi is available
- You can use single images or carousel ads
- The ads look just like regular content
About 63% of people find new products through Google feeds, and 91% of those take action right away. This makes Discover perfect for introducing your brand to new customers.
Gmail promotions tab
The Gmail app, especially its Promotions and Social tabs, is the third major spot for demand gen campaigns. Users see your ads while checking their promotional emails.
Gmail ads match the platform’s look:
- Videos play automatically without sound
- Ads sit among other promotional emails
- Users see clear “Sponsored” or “Ad” labels
Google tests a new Gmail ad format that turns the Promotions tab into a shopping showcase. This new format includes:
- A big product ad front and center
- Clicking shows more products side by side
- Full details like product images, names, prices, ratings, and special offers
This update combines demand gen ads with shopping features, giving ecommerce marketers new ways to boost sales.
Using YouTube, Discover, and Gmail together helps your demand gen campaigns reach potential customers at different points in Google’s ecosystem. Understanding each placement’s features helps you create better ads that work well everywhere.
Demand Gen vs Performance Max: Key Differences
The right strategy for your marketing goals depends on understanding how Demand Gen and Performance Max campaigns differ. These Google campaign types share some features but serve different purposes.
Control and automation
Demand Gen and Performance Max take different approaches to campaign management. The main difference lies in how much control you keep versus what Google’s AI handles.
Demand Gen campaigns give you more hands-on control over key elements. You can:
- Pick specific audience segments based on interests and demographics
- Block certain audience groups
- Target lookalike audiences (you won’t find this feature anywhere else in Google Ads)
- Choose not to use AI optimization
Performance Max, on the other hand, puts automation first. This type of campaign:
- Uses audience signals instead of fixed targeting
- Lets Google’s AI find potential customers beyond your set parameters
- Takes care of bidding, budgets, audiences, and creative combinations
- Gives you less insight into how decisions are made
As one expert puts it, “Think of PMax and Demand Gen like the peanut butter and jelly of Google Ads. They work best together, but each brings a very different flavor to your marketing sandwich.”
Placement and creative flexibility
These campaign types reach audiences in different ways:
Performance Max:
- Shows up everywhere in Google’s ad system
- Runs on Search, Shopping, Display, Google Maps, YouTube, Discover, Gmail, and video
- Reaches more people through multiple ad types
Demand Gen:
- Works only on visual channels
- Runs just on YouTube, Gmail, Discover, and Google video partners
- Uses eye-catching creative and impactful visuals
The way they handle creative assets is different too. Demand Gen lets you control everything – you upload assets and Google places them appropriately. Performance Max not only mixes your assets but can create new ones using AI.
You can preview ad combinations with Demand Gen before launch. Performance Max tests different combinations without showing you previews first.
Funnel stage targeting
Each campaign type works best at different stages of the customer’s path to purchase:
Demand Gen:
- Works best for top and middle-funnel marketing
- Builds interest before active searching begins
- Creates awareness and gets people thinking about your product
- Helps nurture leads who aren’t ready to buy
- Shines when launching new products or warming up new audiences
Performance Max:
- Works at every stage from awareness to purchase
- Aims to drive conversions and results
- Finds people ready to take action now
- Uses AI to spot high-intent users close to deciding
- Focuses on sales, leads, and revenue-driving actions
One expert sums it up nicely: “Demand Gen fills the funnel, and Performance Max squeezes every last drop out of it.”
The reporting tells a similar story. Performance Max bundles data across channels, making it less transparent. Demand Gen shows detailed reports by audience and placement, helping you see exactly what drives engagement.
Your marketing goals should guide your choice between these campaigns. Demand Gen works better for building awareness and interest with more control and visibility. Performance Max uses automation to maximize conversions across Google’s properties.
Setting Up Your First Demand Gen Campaign
You just need careful preparation and a good grasp of key settings to set up your first Google Demand Gen campaign. The right approach will help you create campaigns that work well to reach potential customers on Google’s visual platforms.
Choosing the right campaign objective
Your campaign objective is the foundation of your entire Demand Gen strategy. Google gives you four main objectives for Demand Gen campaigns that match different business goals:
- Sales objective – Perfect when you want to drive conversions from customers ready to buy. This objective uses features that start the purchasing process with eye-catching ads and automated targeting to reach people who are browsing and comparing products like yours.
- Leads objective – Works best to collect contact information from potential customers. This option focuses on getting email addresses, newsletter signups, and other contact details from people interested in your business.
- Website traffic objective – Gets potential customers to your website. This approach helps customers research product options through automated bidding, targeting, and ad creation.
- Awareness and consideration objective – Great for new products or market expansion. This objective builds brand recognition through compelling visual ads and bid strategies that get you the most views.
You can’t edit your objective once you pick it, so think carefully about your main business goal.
Selecting Demand Gen as the campaign type
Here’s how to set up your campaign after you pick your objective:
- Log in to your Google Ads account and click the “Create” button
- Select “Campaign” from the dropdown menu
- Add a clear campaign name (like “Demand Gen – Cold Traffic” or “Demand Gen – Retargeting”)
- Toggle “Run a product feed campaign” if you’re using product feeds
- Add conversion goals based on your advertising goal
- Click “Continue” to move forward
For ecommerce campaigns, you might want to start with a bigger budget. Some experts say to start with at least USD 5,000 per month (about USD 166 per day) to test properly. Traditional Search or Shopping campaigns might work better if you have a smaller budget.
Setting up conversion tracking
Your Demand Gen campaigns need good conversion tracking. Google’s AI can’t optimize your campaign performance without it.
Start by deciding which actions you want to track as conversions:
- Purchases for ecommerce
- Form submissions
- Email signups
- Add-to-cart actions
- Website engagement events
The next step is to set up the tracking code:
- Install the Google tag (formerly Global Site Tag) on every page of your website
- Add event snippets to pages where conversions happen (like thank-you pages)
- Check that your tags work before launching campaigns
Your campaigns will work better if you give Google lightweight conversion events like “add to basket” or “site visit” along with your main conversion actions. This gives the system useful signals to optimize faster.
Budget thresholds matter too. Google suggests a budget that’s at least 15 times your target CPA for campaigns using target CPA bidding. Use Google’s tCPA scaling simulator to estimate traffic potential at different bid levels for campaigns using Maximize conversions bidding.
Note that Demand Gen campaigns take 2-6 weeks to learn while Google collects data to optimize your bids. Keep your settings the same during this time to get the best results.
Targeting the Right Audience
The success of Demand Gen campaigns largely depends on reaching the right audience at the right time. Google’s sophisticated targeting options let you find potential customers based on their interests, behaviors, and similarities to your existing customers.
Using first-party data
First-party data forms the foundation of audience targeting in Demand Gen campaigns. This valuable information comes from data that customers share willingly, such as email addresses or phone numbers your business directly collects and owns.
The strategic value of first-party data is substantial. Marketers who exploit this data can generate double the incremental revenue from a single ad placement or communication. Your first-party data:
- Shows you who your most valuable customers are
- Lets you craft better messages to boost campaign results
- Reveals how people interact with your business
- Shapes product development and strategy
Machine learning combined with first-party data helps you reach more customers as privacy rules change and third-party data becomes scarce. The data shows that 90% of consumers will share their personal information when they get something valuable in return, like better convenience or customized experiences.
Creating custom segments
Google Demand Gen campaigns’ custom segments help you build targeted audiences using specific keywords, URLs, and apps that relate to what you sell. These segments pick the right audience automatically to match your campaign goals, whether you want to boost reach, awareness, or performance.
To cite an instance, see how a running shoe company might build a custom segment for “Avid Marathon Runners”:
- They’d add interest keywords like “5K runs,” “triathlon athlete,” or “long distance runner”
- They’d include URLs of running and marathon training websites
- They’d list fitness apps marathon runners typically use
Search term-based segments often bring the most value among various custom segment types. These segments find users who looked for specific terms on Google properties. You can reach the same people you’d target with Search ads, but at a much lower cost. You might pay $20+ per click through traditional Search, but reaching that same user through Demand Gen on YouTube or Gmail could cost about $1 per click.
The catch is that search term-based custom segments work only on Google-owned properties like YouTube, Discover, and Gmail.
Leveraging lookalike audiences
Lookalike audiences stand out as one of the most powerful targeting options you’ll find only in Demand Gen campaigns. These segments help you find people who share traits with your current customers, so you can reach potential buyers with similar behaviors.
Here’s how to build effective lookalike audiences:
- Begin with quality “seed” data (customer match lists, previous buyers, etc.)
- Pick specific geographic locations to target
- Choose your reach: narrow (2.5%), balanced (5%), or broad (10%)
Your first-party data quality directly affects how well your lookalike audiences perform. You’ll want 1,000 to 5,000 high-value users in your seed list for the best results. Your most engaged and profitable customers create more accurate lookalike groups, so start with them.
You can get even more precise by grouping your data by demographics, buying patterns, or site behavior before creating lookalike audiences. This lets you tailor messages for specific customer groups and boost engagement and conversion rates.
Smart use of first-party data, custom segments, and lookalike audiences helps your Demand Gen campaigns find the right people at the perfect moment. This approach streamlines processes and boosts results.
Creating High-Performing Ad Creatives
Visual elements are the life-blood of successful demand gen campaigns. The right creatives help you engage audiences and optimize performance on Google’s visual platforms. Here’s how to create high-performing assets that make an impact.
Image specs and best practices
Google Demand Gen campaigns support multiple image formats to maximize placement coverage on platforms. You need to upload at least three images in these aspect ratios to get the best results:
- Landscape (1.91:1): Minimum 600×314 pixels, recommended 1200×628 pixels, 5MB maximum file size
- Square (1:1): Minimum 300×300 pixels, recommended 1200×1200 pixels, 5MB maximum file size
- Vertical (4:5): Minimum 480×600 pixels, recommended 960×1200 pixels, 5MB maximum file size
- Vertical (9:16): Minimum 600×1067 pixels, recommended 1080×1920 pixels, ideal for YouTube Shorts
Image quality significantly affects performance. High-resolution, compelling visuals with clear subjects help build brand trust and inspire action. You can start by reusing successful images from your social platforms to showcase your brand.
Video formats and tips
Video ads tell your brand’s story better. You should prepare videos in these formats to cover all placements:
- Horizontal (16:9): Recommended 1920×1080 pixels for HD quality
- Square (1:1): Recommended 1080×1080 pixels for HD quality
- Vertical (9:16): Recommended 1080×1920 pixels, essential for YouTube Shorts
Videos should run at least 5 seconds. Shorter videos between 15-30 seconds work better. Videos under 10 seconds won’t play on YouTube In-stream.
You can control where your videos appear with creative-level priorities:
- In-stream (plays before, during, or after other videos)
- In-feed (appears on YouTube home, search, watch-next, Discover, and Gmail)
- Shorts (YouTube’s short-form video feed)
Google offers tools to create videos if you don’t have any. These include a video creation tool with templates and a trim feature to make shorter clips from longer videos.
Carousel ads for storytelling
Carousel ads let users swipe through 2-10 images, making them great for sequential storytelling. This interactive format works well for:
- Taking audiences through a brand story
- Showing different product or service features
- Breaking down complex ideas into simple parts
Start with an eye-catching hook frame that makes people want to swipe. Arrange each card like book chapters (setup, problem, solution, proof, CTA). Keep your visuals consistent across slides to create one unified story.
Advertisers see 33% more conversions at similar costs by adding product feeds to Demand Gen campaigns. A/B testing different creative combinations helps you find what appeals to your audience and delivers the best results.
Budgeting and Bidding Strategies
Budget planning and bidding strategies are the foundations of successful demand gen campaigns. Google’s AI needs enough data to improve performance, and you retain control over your ad spend by setting the right financial parameters.
Recommended daily budget
Google has specific minimum budget requirements for demand gen campaigns that use conversion-based bidding:
- Maximize Conversions: Your daily budget should be at least USD 100.00 per campaign to capture enough conversions
- Target CPA (tCPA): You’ll need USD 100.00 or 20x your target CPA daily—whichever amount is higher
- Value Bidding Strategies: Maximize conversion value campaigns require a minimum daily budget of USD 100.00
- Target ROAS: Your daily budget should be USD 100.00 or 20x your expected average conversion value divided by target ROAS
Campaign total budgets offer an alternative approach. Google can spread your spend evenly throughout the campaign period without daily limits. This works great for campaigns with fixed start and end dates, giving you more flexibility in daily spending.
Maximize conversions vs target CPA
These bidding strategies take different paths to optimization:
Maximize Conversions: This strategy focuses on volume and uses your entire budget to get as many conversions as possible, regardless of individual conversion costs. This works best for:
- New campaigns collecting original conversion data
- Accounts that can be flexible with cost-per-acquisition targets
- Cases where getting more conversions matters more than efficiency
Target CPA: This approach keeps your cost per conversion around a specific value, which might limit volume but gives you predictable costs. This strategy shines when:
- Your historical conversion data is stable (at least 30 conversions monthly)
- Your profitability depends on specific acquisition costs
- You just need predictable costs per result for budget planning
Remember to start with maximize conversions for 2-4 weeks to collect enough data. After that, you can set a target CPA based on actual results.
When to adjust bids
Smart timing of bid adjustments makes a big difference in demand gen campaigns:
- After the learning phase: Let your campaign run for the first 14 days without changing bids. This helps train the model properly
- When transitioning to value bidding: Make sure you have at least 50 conversions with value in the last 35 days, plus 10+ conversions with value in the past week
- When setting tROAS targets: Start with a target about 20% lower than your historical average ROAS
- When changing bidding strategies: Change one thing at a time—don’t adjust bidding strategies while increasing budgets
Regular performance reviews of devices, locations, and timing can reveal opportunities for bid adjustments. Your campaign should reach at least 50 conversions before you make any major bid changes.
Optimizing and Measuring Performance
Your demand gen campaigns need strong performance monitoring as their foundation. The results will improve dramatically when you track the right metrics and optimize based on informed data after your ads go live.
Understanding the learning phase
Google’s algorithms use the learning phase to gather performance data that optimizes your campaign delivery. This critical phase typically runs for one to four weeks. The system tests various contexts such as time of day, locations, and targeting parameters during this period.
You can make the learning period shorter by:
- Getting at least 50 conversion events before making changes
- Avoiding frequent edits that reset the learning process
- Beginning with manual bidding to collect initial data
Key metrics to track
These metrics will help you measure your campaign’s success:
- Marketing Qualified Leads (MQLs) and Sales Qualified Leads (SQLs): See how your marketing efforts turn into sales opportunities
- Cost Per Lead (CPL) and Cost Per Acquisition (CPA): Check your efficiency and profitability
- Close Rate Per Channel: See which channels bring your highest-quality leads
- Average Deal Size: Learn how well you attract high-value customers
- Click-Through Rate (CTR): Measure your ad’s relevance and engagement directly
Using reporting columns for insights
Google offers specialized reporting tools that enable deeper analysis:
- You can segment reports by network (YouTube, Discover, Gmail, Display) to learn about channel performance
- YouTube traffic breaks down further into in-stream, in-feed, and Shorts
- The creative performance shows up in asset reporting at campaign and ad levels
- Your viewer engagement patterns appear over time in the Analytics tab
Conclusion
Google Demand Gen ads mark a big change in digital advertising and transform the way brands connect with potential customers. These visually rich campaigns reach users on YouTube, Discover, and Gmail. They grab people’s attention before they even start looking for products or services.
Traditional search ads only capture existing demand. Demand Gen campaigns do something different – they create new demand. This approach helps you build awareness and consideration early in the customer’s trip. Your marketing funnel expands from top to bottom. These campaigns give you more control than Performance Max. You get precise targeting through first-party data, custom segments, and exclusive lookalike audiences.
Your first campaign needs a solid plan for goals, conversion tracking, and audience targeting. High-quality visual assets make a big difference. You’ll need landscape images, square formats, vertical videos, and interactive carousel ads. Each creative piece plays a key role on different platforms.
Smart budget planning matters too. You should start with $100 daily per campaign. This gives Google’s AI enough data to work well. Once the original learning phase ends, real results will guide your next steps.
Getting good at Google Demand Gen ads takes time and patience. The results are worth it. You can reach billions of users during their discovery phase. Your brand builds awareness before competitors do. People see your message when they’re most open to new brands.
Making your campaigns better never stops. Look at placement performance, creative impact, and how audiences respond. This helps you spot ways to improve. Time and experience will show you what works best for your business goals – whether that’s awareness, consideration, or conversions.
Google Demand Gen ads give modern marketers a powerful way to reach customers early. The strategies in this piece will help you build campaigns that work. They won’t just catch eyes – they’ll drive real business results across Google’s big network.
FAQs
Q1. What is the recommended daily budget for Google Demand Gen campaigns? For conversion-based bidding, Google recommends a minimum daily budget of USD 100.00 per campaign. This ensures sufficient budget for capturing conversions and allows Google’s AI to optimize performance effectively.
Q2. How do I set up a Demand Gen campaign in Google Ads? To set up a Demand Gen campaign, log into your Google Ads account, click “Create,” select “Campaign,” add a campaign name, toggle “Run a product feed campaign” if applicable, add conversion goals, and click “Continue.” Then, choose your campaign objective and follow the prompts to complete the setup.
Q3. What are the key differences between Demand Gen and Performance Max campaigns? Demand Gen campaigns offer more manual control over targeting and creative assets, focusing on top and mid-funnel marketing. Performance Max, on the other hand, uses more automation, appears across all Google properties, and is designed to drive conversions throughout the entire funnel.
Q4. What types of ad creatives work best for Demand Gen campaigns? High-performing ad creatives for Demand Gen campaigns include a mix of image and video formats. Use landscape, square, and vertical images, as well as short-form videos (5-30 seconds). Carousel ads are also effective for storytelling and showcasing multiple product aspects.
Q5. How long should I wait before optimizing my Demand Gen campaign? It’s best to avoid making significant changes to your Demand Gen campaign during the initial learning phase, which typically lasts 2-4 weeks. After this period, and once you’ve accumulated at least 50 conversions, you can start making data-driven optimizations to improve performance.
