Google Ads Demand Gen - new AI solution from Google

The Google Ads universe offers a variety of campaign types, not all of which are equally suitable for every business or account. Since October 2023, Google has expanded its offering with the new campaign format "Demand Gen Campaigns." Below, you'll learn when this format makes sense, how it works, and what options it offers for setup and optimization.

What is a demand gen campaign?

Demand Gen is an innovative, AI-powered campaign type in Google Ads. The goal is to reach new audiences and spark their interest in products or services before they actively search for a brand.

Demand Gen leverages visual and entertainment-focused platforms like YouTube (including Feed, Shorts, and In-Stream), the Discovery Feed, and Gmail to deliver ads in a single campaign.

Demand Gen is essentially an improved version of Discovery Ads, replacing it with more powerful tools and features to help you achieve your marketing goals even more effectively.

Since March 2025, all Discovery campaigns have been automatically migrated to Demand Gen. Advertisers do not need to take any action during this transition. Campaigns will remain active, and all previous data and insights will be retained.

New demand-gen campaigns can now be created directly in the Google Ads account.

How does Google Ads Demand Gen work?

To better understand this advertising format and decide if it's right for you, here are the basics of how Google Ads Demand Generation works:

Ad placements of the Demand Gen campaign

YouTube: Ads appear in the Home feed, Watch feed, Shorts, in-feed ads, and skippable in-stream ads.

Google Discover: Ads are displayed in the Discover feed, which presents personalized content based on users' interests.

Gmail: Ads can be placed in the Promotions and Social tabs, areas where users frequently interact.

Demand Gen campaign ad formats:

Ad formats of the Demand Gen campaign

Single-image ads: Up to 20 creative assets can be uploaded, and Google will optimize the ad based on the highest probability of success.

Video ads: Up to 5 video assets allow you to dynamically address your target audience.

Carousel ads: Up to 10 cards, each with its own image, headline, URL, and call-to-action (CTA), are possible.

Goals of the Demand Gen Campaign

Traffic, brand awareness and consideration, leads, sales.

Benefits of Google Ads Demand Gen Campaigns

Demand Gen versus Performance Max

1. Objective:
   • Performance Max: Optimized for the entire sales funnel, with a focus on conversions and increased sales.
   • Demand Gen: Focuses on generating demand in the middle funnel to create interest and brand awareness.
2. Platforms:
   • Performance Max: Uses all Google channels (e.g. Search Network, Display, YouTube, Gmail, Discover).
   • Demand Gen: Focuses on visual platforms such as YouTube (including Shorts), Gmail and Discover.
3. Ad formats:
   • Performance Max: Combines text, image, and video ads in one campaign.
   • Demand Gen: Offers advanced visual formats such as carousel ads, videos, and single images.
4. Target audience:
   • Performance Max: Uses AI to reach audiences based on signals such as search behavior and interests.
   • Demand Gen: Enables more precise targeting through lookalike audiences and custom segments.
5. Reporting features:
   • Performance Max: Standard reports focusing on conversions and ROAS.
   • Demand Gen: Advanced reports such as conversion path and brand lift analysis, conversion path reporting, data-driven attribution modeling, brand and conversion lift.

When to use demand gen campaigns?

Demand gen campaigns are ideal for generating additional demand. However, they are less suitable when there is already more demand than can be met with current Google Ads campaigns.

If your existing campaigns are well-targeted, you have a relevant impression share, and you can afford a higher CPA, demand-gen campaigns can be beneficial. Because these campaigns target demand rather than conversions directly, you should expect higher initial costs and few additional conversions.

A major advantage of demand-gen campaigns is that they span other networks and target users at different stages of the customer journey. For example, the Discovery Network offers the opportunity to place ads in an environment where users typically read news. Visual content such as images and videos can further reinforce the advertising message.

Tip: Combine Demand Gen campaigns with Performance Max. While Demand Gen creates targeted demand, Performance Max campaigns cover all networks. Remarketing allows you to retarget and re-engage users from Demand Gen campaigns.

Flexible bidding options for the Demand Gen campaign

In the days of Discovery Ads, bidding options were very limited. Options like "Maximum Conversions," "Target CPA," and "Target ROAS" were available for fine-tuning.

However, with the introduction of Demand Gen, Google has introduced a new bidding strategy— Maximum Clicks. This option is a game-changer for advertisers looking to manage longer and more complex conversion paths, increase offline sales, or drive more traffic to their website.

Various ad formats in a single campaign

Until now, advertisers were limited to choosing either product images or custom image ads. Demand Gen, however, is a refreshing innovation that offers a wider range of ad formats. You can now include short videos, various image formats (such as square, portrait, and carousels), copy, calls to action (CTAs), and more in a single campaign.

• Video display
• Image display
• Carousel display

To optimize your campaign performance, we recommend using a combination of image and video assets from your existing social media and video campaigns. When doing so, keep in mind the "rule of three":

• Integration of all image formats: portrait, square and landscape.
• Integration of various video formats: square, landscape and vertical.
• Use of three descriptions and headings each.

For retailers, it's a good idea to attach GMC product feeds to transform ads into a virtual store. After selecting the appropriate ad formats, the final review takes place before the campaign launches.

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Lookalike Audience Segmente

Lookalike audiences refer to users who exhibit behaviors and characteristics similar to those of your current customer list. This is a powerful feature that allows businesses to reach potential customers who closely resemble their existing customers. All you need to do is provide your own data, usually in the form of a customer or remarketing list. Google Ads processes this data and assigns it to the appropriate audience groups.

Three settings for similar audiences in Google Ads:

1. Narrow: The goal is to reach 2.5% of users in your campaign's target region and language who are similar to your database.
2. Balanced: The goal is to reach 5% of users – this is also the default setting for Google Ads.
3. Broad: The goal is to reach 10% of users in the target region and language who are similar to your database.

The focus is on placing the most effective video and image content where users are most visually engaged. Advertisers can combine personalized creative with lookalike segments based on their existing audience lists.

Expanded reach on YouTube thanks to Demand Gen

Previously, Google Discovery Ads enabled advertisers to reach users on platforms such as the Discover feed, Gmail, and certain areas of YouTube, including the home page, search, and the Watch Next feed.

However, with Demand Gen campaigns, Google is taking it a step further, expanding its reach to YouTube Shorts and in-stream ads. This move fits perfectly with the growing trend of short-form video content on platforms like TikTok, Instagram Reels, and Facebook Watch.

This is how Google Ads leverages the potential of YouTube Shorts for advertising. It gives businesses a great opportunity to test both short- and long-form video ad content across multiple platforms, helping them find the optimal combinations that resonate best with their target audience.

Flexible bidding options

Bidding strategies such as “Maximum Conversions,” “Target CPA,” or “Target ROAS” take on a new dimension with Demand Gen: Longer and more complex conversion paths, measurement of offline sales, and website traffic growth can be displayed in the advanced reporting feature.

Advanced reporting functionality for Demand Gen campaigns

Tracking performance and reporting is undoubtedly one of the most critical aspects of any advertising campaign. This is where you collect the data that tells you how your ads are performing.

The three previous reporting options—standard reporting in Google Ads, asset reports, and unique reach analysis—are only suitable for smaller businesses. With the upgrade to Demand Gen, the advanced reporting functionality provides in-depth analysis: This includes conversion path reports, data-driven attribution, brand lift analyses, and conversion lift analyses.

Advertisers gain more comprehensive insights into the performance of their campaigns.

Tips for successful demand gen campaigns

To ensure that your first demand gen campaigns not only consume resources but also work effectively, you should consider these strategies:

• Patience and adaptation: Wait at least two weeks after the campaign launch before making any changes. Limit tCPA adjustments to a maximum of 20% to promote stability and learning.
• Bidding strategy: Start with the Maximize Conversions option to gain initial insights. After reaching 50 conversions, you can move to goal-based strategies like CPA or ROAS.
• Budget optimization: A daily budget of €100 to €500 per ad group provides enough room for effective learning and adjustments that promote long-term growth.
• Ad quality: Use high-quality, visually appealing images and short, concise copy of fewer than 100 characters. Avoid text overlays of more than 20%.
• Audience strategy: Leverage advanced targeting like Customer Match, In-Market, and Lookalike audiences. Import proven audiences from other Google Ads campaigns to further optimize performance.

A demand-gen campaign is a great addition to any business's Google Ads toolkit. However, creating a demand-gen campaign is only the first step. The real challenge lies in monitoring its performance and deriving actionable insights from it. This is especially true if you manage multiple ad campaigns with different objectives and creative content.

How do you overcome this challenge? Don't hesitate to contact me. I'd be happy to help!