How Cutting Demand Gen Killed Performance Max Performance

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A marketing team ran an experiment to test the relationship between Demand Gen and Performance Max campaigns:

  • A Performance Max campaign was set up to promote a best-selling product.
  • A Demand Gen campaign targeted the same audience, focusing on engagement and brand awareness.

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Initially, Demand Gen was not generating direct revenue, so after two months, they decided to cut its budget. The results were dramatic:

  • Performance Max clicks dropped by 60%.
  • Conversions took a major hit.

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Demand Gen seemed like a waste of budget at first, but its true impact was only revealed once it was removed. Without the extra engagement and awareness, fewer users entered the sales funnel, which negatively impacted Performance Max.

Reactivating Demand Gen: The Comeback Effect

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A few months later, they reactivated and optimised Demand Gen. This time, they saw a massive improvement in Performance Max results:

  • Impressions surged by 350%.
  • Clicks rebounded by 200%.
  • Conversion value increased by 160%.

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This experiment proves that not all campaigns are designed to drive direct conversions, but they can still fuel the success of revenue-focused campaigns. Demand Gen played a crucial role in warming up audiences, leading to better performance for Performance Max when users were ready to buy.

New Performance Max Experiment Features: A Smarter Way to Test Assets

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In addition to insights on campaign synergy, Google has introduced a new asset testing feature for Performance Max campaigns. Previously, advertisers could run experiments comparing PMax against Search, Shopping, and Display campaigns. Now, Google has added the ability to test a feed-only Performance Max campaign (essentially a Shopping campaign) against one with full assets, including ad copy, images, videos, and extensions.

This experiment setup splits the campaign into a control and trial group without requiring a duplicate campaign or additional budget.

Why This Matters

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  • Less wasted budget: Instead of duplicating campaigns and increasing costs, advertisers can now test variations within a single PMax campaign.
  • Better B2B testing: For B2B advertisers, where most conversions come from Shopping ads, this feature helps determine whether adding assets (Display and Search) enhances performance or simply drains the budget.
  • Easier insights: The experiment provides topline performance comparisons, making it simple to analyse which approach delivers better results.

The Takeaway: Strategic Experimentation Drives Success

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These updates and insights reinforce one key lesson: campaigns do not work in isolation.

  • Demand Gen campaigns may not always drive direct sales, but they prime audiences for conversion, helping Performance Max campaigns perform better.
  • New PMax experiment tools allow advertisers to test ad assets more effectively, helping them make data-driven decisions without additional costs.