Google has introduced Demand Gen campaigns, replacing Discovery campaigns with a stronger focus on video placements, audience targeting, and engagement-driven advertising. This update has raised an important question for advertisers: How does Demand Gen compare to Performance Max (PMax), and which one should you use?
Both campaigns leverage Google’s AI-powered automation, but they differ significantly in terms of creative control, ad placements, audience targeting, and optimization strategies.
This guide provides a detailed comparison of Demand Gen vs. Performance Max, their best use cases, and strategic recommendations to help advertisers maximize their ROI and campaign performance.
Understanding the Two Campaign Types
What Is Google Demand Gen?
Entity: Google Demand Gen Campaign
Google Demand Gen is the evolution of Discovery campaigns, designed to deliver high-impact, visually engaging ads across Google’s most interactive platforms.
Key Features of Demand Gen:
Placement Control – Select specific ad placements, including YouTube Shorts, Gmail, and Google Discover.
Designed for Visual Creatives – Optimized for short-form videos, carousels, and immersive ads.
Custom Audience Targeting – Supports lookalike audiences, intent-based targeting, and manual segmentation.
Best For:
Brand awareness & engagement
Reaching new audiences through high-impact visuals
Retargeting & mid-funnel campaigns
What Is Performance Max (PMax)?
Entity: Google Performance Max Campaign
Performance Max is a fully AI-powered campaign type that serves ads across Google Search, Display, YouTube, Gmail, and Maps. It automates bidding, audience selection, and ad placements to optimize for conversions.
Key Features of Performance Max:
AI-Driven Optimization – Google’s algorithm automatically adjusts bidding and placements.
Full Multi-Channel Reach – Ads run across all Google properties without manual placement selection.
Goal-Based Learning – Focuses on maximizing conversions and return on ad spend (ROAS).
Best For:
Ecommerce businesses with product feeds
Lead generation with bottom-funnel intent
Fully automated campaigns optimized for conversions
Key Differences – Demand Gen vs. Performance Max
Audience Targeting Capabilities
Demand Gen:
Manual audience selection – Lookalike segments, interest-based discovery, and custom intent targeting.
More control over segmentation – Ideal for mid-funnel targeting.
Performance Max:
Fully AI-driven audience signals – Google dynamically selects the best users based on past behavior.
Optimized for bottom-funnel conversions – Best for lead gen and ecommerce.
Ad Placement Control
Demand Gen:
Choose where your ads appear – YouTube Shorts, Gmail, and Discover feeds.
More transparency over placement-specific performance.
Performance Max:
No placement control – Ads are distributed across all Google properties automatically.
Limited transparency on performance by channel.
Creative Asset Management
Demand Gen:
Optimized for visual creatives – Marketers can tailor ads for specific placements.
Best suited for video-first advertising strategies.
Performance Max:
Automated asset testing – Google’s AI selects and tests different creative elements.
Less control over how creatives are used across placements.
Reporting & Optimization Differences
Demand Gen:
Provides placement-specific reporting – Advertisers can see which platforms drive the most engagement.
Allows more manual campaign optimization.
Performance Max:
Aggregated reporting – No visibility into how ads perform by channel.
Optimized for total conversion goals rather than individual placements.
Choosing the Right Campaign for Your Goals
Best Use Cases for Demand Gen
Brand awareness & engagement campaigns.
New product launches and mid-funnel retargeting.
Advertisers who need placement control for storytelling campaigns.
Best Use Cases for Performance Max
Ecommerce stores with product feeds & shopping ads.
Lead generation with automated optimization for high-intent users.
Campaigns focused on maximizing conversions and ROAS.
Can You Use Both Campaigns Together?
Yes! Many advertisers combine Demand Gen and Performance Max for a full-funnel strategy.
How to Use Both Together:
Demand Gen for Awareness & Engagement – Use video creatives to capture attention.
Performance Max for Conversions – Optimize for final purchase or lead generation.
Use First-Party Data Across Both – Share customer lists for better retargeting.
Strategic Budgeting & Performance Tracking
Recommended Budget Allocation
Suggested Split for a Balanced Campaign Strategy:
Demand Gen: 30-40% – Focus on awareness, engagement, and mid-funnel conversions.
Performance Max: 60-70% – Prioritize bottom-funnel conversions and ROAS.
Conclusion
Summary of Key Differences:
|
Feature |
Demand Gen |
Performance Max |
|
Placement Control |
Yes |
No |
|
Creative Customization |
More Control |
AI-Optimized |
|
Audience Targeting |
Manual & Lookalikes |
AI-Driven |
|
Best For |
Brand Awareness |
Conversions |
Use Demand Gen for creative control and mid-funnel engagement.
Use Performance Max for conversion-focused automation.
Combine both for a full-funnel approach.
At Collab Lab, we help businesses maximize their Google Ads strategy for better engagement and ROI.
Need expert guidance? Contact Collab Lab today!
FAQs: Google Ads Demand Gen vs. Performance Max
No. Performance Max automatically distributes ads across all Google properties without manual placement control.
Yes. Demand Gen has replaced Discovery campaigns and now offers expanded video ad placements.
Performance Max is better for ecommerce, especially if you use product feeds and shopping ads.
Yes, but Performance Max is better for bottom-funnel leads, while Demand Gen is ideal for mid-funnel engagement.
Absolutely! Many advertisers use Demand Gen for engagement and Performance Max for high-intent conversions.
