What is Google Demand Gen? How to Use It + Expert Tips

Google demand gen ads identify your top-performing media assets and deliver them across Google’s entertainment feeds. This guide includes a complete walk-through and examples to inspire your next campaign.

Step aside, discovery ads: there’s a new campaign type taking over Google’s entertainment feeds. As of October 2023, demand gen ads have begun rolling out in place of discovery ads.

What are demand gen ads and how do they work? And most importantly, how can you use this new AI-powered campaign type to your brand’s advantage?

In this guide, we’ll cover everything you need to know about demand gen ads — including a tutorial, best practices, and a campaign setup checklist.

What are Google demand gen campaigns?

Demand Gen Ads are immersive, interactive, and visually rich ads that appear on various Google platforms. 

Unlike regular Google Ads, these ads target audiences based on their website and online history, interests, and saved pages and items, instead of keywords. 

This means your audience might not directly seek out your products when they see this type of ad. However, they may have frequented your website or joined industry-related Facebook groups that Google’s machine-learning algorithms deemed characteristic of your brand’s ideal audience. 

If these ads sound similar to discovery ads, there’s a good reason. Demand gen ads were introduced as a replacement for discovery ads. In fact, discovery campaigns will automatically upgrade to demand gen campaigns in 2024.

However, demand gen ads have several additional capabilities that make them more powerful than discovery ads. Below, we’ll explore differences like bidding strategies, lookalike segments, product feeds, placements, and formats.

Where do demand gen ads serve?

If you’ve historically run discovery ads, the placement options for demand gen ads will look familiar. Both display in the:

• YouTube home feed
• YouTube watch feed
• Discover feed
• Gmail promotions tab
• Gmail social tab

However, demand gen ads also display on YouTube as:

• In-feed ads
• Skippable in-stream ads
• Shorts

Let’s take a closer look at these in turn.

The Google App (Discovery feed)

These ads show up on the Google app on your mobile phone, where you can view the latest news, events, and other topics. They also appear on the home page and the Discovery Feed. 

What determines how your ads make it to your audience? It’s a targeting combination of their interests, saved pages, and both website and purchase history.

YouTube

YouTube is the second most popular search engine in the world. That’s why we use YouTube Ads to target keywords your audience might search for in their next video. Still, YouTube campaigns help you capitalize on the audience casually watching, without necessarily having to type your brand keyword into the search box. 

With 90% of people using YouTube to discover new brands or products compared to other social media channels, demand gen ads are excellent for lead generation purposes. 

Gmail 

Imagine your products reaching the inboxes of 1.8 billion people. Gmail Discover Ads, nestled within the “Social and Promotions” tab, don’t look salesy or obtrusive. Yet they still stand out from other ads in Gmail.

What ad formats do demand gen campaigns use?

Demand gen campaigns have three ad format options:

• Single image ads like the LinkedIn Ads example below can include up to 20 creatives. Google Ads will automatically display the image that’s most likely to achieve the desired outcome.

• Video ads like the Domino’s Pizza example below can include up to five creatives. Again, Google Ads automatically selects the best video to display for each ad auction won.

• Carousel image ads like the SelectBlinds example below can include up to 10 cards. Each card can display a unique image, headline, URL, and cal-to-action (CTA).

Note that adding an ecommerce product feed to a demand gen campaign limits your ad format options. Product feeds automatically display like the Google Ads example by Inside Weather below.

Which objectives align with demand gen ads?

Because demand gen ads are geared toward the middle and bottom of the funnel, they work with the following Google Ads campaign objectives:

• Product and brand consideration
• Traffic
• Leads
• Sales

Google demand gen ads vs. Google discovery ads

On the surface, the two Google Ads campaign types appear pretty similar. Both are AI-powered ads that deliver to YouTube, Gmail, and Discover. However, demand gen ads introduce new features for almost every aspect of the campaign — ultimately making them much more powerful.

Formats

Discovery ads supported images only. In contrast, demand gen ads allow images, videos, and image carousels.

Placements

Demand gen ads have two placements that discovery ads never had. In addition to displaying in the YouTube home and watch feeds, demand gen video ads can now appear in the YouTube feed and in the shorts feed.

Targeting

Both campaign types allow location targeting and first- or third-party audience segments. Demand gen ads also support lookalike audiences, an exclusive new audience targeting option that uses your customer list as a seed or source.

Optimization

In addition to optimizing for conversions and conversion value, demand gen ads can also maximize clicks. This extra option gives advertisers more flexibility and a better chance at getting the right results.

Reporting

Both discovery ads and demand gen ads support standard Google ads, asset, and unique reach reporting. For demand gen ads, Google Ads also provides conversion path reporting, which offers more insight into the customer journey.

Availability

Demand gen ads are now widely available to advertisers as of October 2023. However, discovery ads are no longer available for new campaigns in Google Ads. If you have any existing discovery campaigns, they’ll automatically upgrade to demand gen ads by November 2023.

Why you should use demand gen ads

If you’ve historically used discovery ads, then upgrading them to demand gen ads is a no-brainer. But if you’re considering launching your first campaign of this type, you may not be convinced yet. What is demand gen, and how can these ads benefit your business?

Here’s a look at the benefits.

Reach prospects at scale

First, consider the scale. Since demand gen campaigns include so many Google feeds, they can reach up to 3 billion users each month.

These surfaces are known for driving results. In fact, 87% of consumers report that YouTube helps them make purchase decisions faster. And over 90% of consumers took additional action after learning about new products via Discover and Gmail.

Capture more conversion opportunities

Because these campaigns can include both images and video, they offer extra flexibility. For example, you can connect with potential customers via image ads in Discover, video ads in the shorts feed, and a product feed in Gmail — giving you far more opportunities to drive demand.

“Demand gen ads have been yielding more significant results compared to discovery ads,” shares Google Ads expert Magee Clegg. “For instance, we saw a 25% increase in click-through rates for one of our clients within the first month of switching to demand gen ads. This is largely due to the more personalized, ‘native’ feel of these ads which blends seamlessly with the content the user is already interacting with.”

Expand audience targeting strategically

A demand generation strategy centers on creating interest in your company’s offerings and guiding prospects toward a conversion. But how can you introduce your business to new prospects while keeping wasted ad spend to a minimum?

With demand gen ads, you can set up lookalike audiences. These segments are based on your own customer lists, so they let you connect with people who are a lot like your existing customers — making them a likely to be a good fit for your brand.

“We’ve noticed a big difference since we started using demand gen ads,” explains Max Maybury, owner and co-founder of AI-Product Reviews. “They give you a better chance of targeting the right people and getting better leads than discovery ads. We’ve also noticed a jump in conversion rates, meaning demand gen ads get through to our audience.”

Optimize for the outcomes you want

Whether you want to use demand gen ads to get more traffic or convert more customers, there’s an optimization option for you. This campaign type supports maximize conversions and maximize clicks bidding strategies so you can focus on the result you want.

Depending on your goal, you have other options to optimize demand gen campaigns too. For example, you can target new customers with special introductory offers or cross-sell products to existing customers at a discount.

How to set up a Google Ads demand gen campaign

To get started with demand generation campaigns, you need a Google Ads account and at least one image and one video. If you plan to advertise for ecommerce, you need a Google Merchant Center (GMC) product feed too.

Select a compatible objective

Open your Google Ads account and click the plus sign to start a new campaign. Select the campaign objective that best aligns with the business goal you want to achieve.

Keep in mind that demand gen campaigns work with select mid- and bottom-of-funnel objectives only. These campaigns aren’t compatible with brand awareness, app promotion, or local store visits objectives.

After choosing an objective, select demand gen as the campaign type. If you plan to target sales or lead generation, you’ll also need to confirm the conversion action you want to measure — or set one up if you haven’t already.

Optimize for your main goal

Click to create a new demand gen campaign. Then choose a relevant optimization goal.

The available options may vary, depending on if you enable a GMC product feed:

• Clicks help you get as much website traffic as possible. This goal is great for MOFU campaigns, as it can help you build Google remarketing lists for search ads (RLSA) to use with BOFU campaigns.
• Conversions help you get as many leads or sales as possible. This goal is designed for BOFU objectives and works best when you use high-intent audience segments.
• Conversion value helps you get the largest conversions possible. This goal works well for BOFU campaigns that track the unique value of each conversion action.

If you plan to advertise ecommerce products, enable your GMC product feed as well. By default, Google Ads automatically promotes the most relevant products from your feed. If necessary, you can select specific collections or products at the ad group level.

Set a budget and target cost per action

To get more control over the return on investment (ROI) for your campaign, consider setting a target cost per action (CPA). While this Google Ads setting is optional, it can help you get the conversions you want at the cost you need.

Then set a campaign budget and time frame. Currently, demand gen campaigns require daily budgets rather than lifetime budgets. End dates are always optional — and aren’t necessary for ongoing campaigns.

Choose audience targeting options

Next, build a target audience for the ad group. Use the campaign objective and your business goals to choose the most relevant approach.

If your business serves customers in specific geographic areas, use geotargeting to build a target audience. With Google Ads, you can either target or exclude users by country, state, city, neighborhood, or landmark.

Then use Google’s audience signals to reach potential customers based on their interests, behaviors, or past interactions with your business. You can use Google’s affinity and in-market signals or connect your own first-party data sources to create custom audiences.

Demand gen ads also have the option to target lookalike audiences. To create a new one, click the “Add an Audience” button and select “Lookalike” as the segment type. Note that these audiences only work with demand gen campaigns.

By default, Google Ads usually enables optimized targeting, which is similar to audience expansion on other advertising networks. This setting allows Google Ads to target people beyond the audience you defined when it’s likely to increase conversions.

According to Google Ads, this setting increases conversions by an average of 20%, which means it’s often a good idea. But if you need to reach a more specific audience, make sure to disable this setting.

Create a demand gen ad

After confirming ad group settings, it’s time to build your creative. Note that if you enable a product feed, you won’t see any ad format options. Instead, Google Ads will pull images directly from your GMC product feed.

If you don’t add a product feed, you’ll be able to choose between creating an image, video, or carousel image ad. Make sure to scroll through the ad previews to confirm where the ad format is eligible to display.

For example, video ads can appear in the shorts feed, in the YouTube feed, and in the discover feed. However, this ad format isn’t compatible with Gmail.

If you want to maximize reach for all available placements, plan to create multiple ads in the same ad group. By creating image, video, and carousel ads, you can fully leverage the capabilities of demand gen campaigns.

No matter which format you choose, it’s in your best interest to upload as many options as possible. For example, image and video ads require just one creative, while carousel ads need at least two cards.

But when you add the maximum number of creatives, you give Google Ads more options to configure ads that resonate with your target audience. Upload up to 20 images, 5 videos, and 10 carousel cards.

The same goes for ad copy. In most cases, you can add up to five headlines, five long headlines, and five descriptions. As the campaign collects data, you can see what messaging works best for your audience and use your findings to improve this and other campaigns.

Best practices for demand gen ads

How can you make the most of demand gen campaigns? Use these best practices and expert tips as a guide.

Use lookalike audiences wisely

Google Ads’ lookalike audiences are one of the most exciting new elements of demand gen campaigns. But they aren’t right for every demand gen campaign.

Lookalike audiences tend to work best for mid-funnel campaigns that optimize for clicks or for bottom-of-funnel campaigns promoting products and services with short sales cycles.

Keep in mind that lookalike audiences are similar to your existing customers, aside from one major difference. In many cases, they haven’t heard of your business yet — and they may need time to consider your offer.

It’s often best to start with Google Ads’ “Narrow” setting for lookalike audiences, as it targets people who are the most similar to your customer list. As you scale demand gen campaigns, consider using “Balanced” or “Broad” settings.

Pay attention to the ROAS

Google Ads costs can vary significantly, depending on your objective, campaign type, and industry. If you expect to spend the same on demand gen ads as you did on discovery or other campaign types, think again.

For example, I entered my typical performance max budget for a demand gen campaign. Google Ads recommended doubling this daily budget for a demand gen campaign, despite the identical objectives.

If you see similar cost discrepancies, pay attention to the metrics that truly matter — like return on ad spend (ROAS). A higher ROAS from demand gen ads may make this campaign type work prioritizing over others.

Leverage campaign reporting and attribution insights

For deeper insights into your demand gen campaigns, use Google Ads’ advanced reporting options. With conversion path reports, you can learn more about the journey customers take before conversions. You can also see how elements like devices affect outcomes.

“With Google Ads custom reports and HawkSEM’s proprietary ConversionIQ marketing technology, our team gets maximum visibility into conversion paths,” shares HawkSEM CEO Sam Yadegar. “ConversionIQ also provides full-funnel attribution, allowing us to make demand gen ads a valuable component of clients’ ad strategies.”

Maximize demand gen ad strength

The more unique creative and copy assets you upload to demand gen ads, the more options you give Google Ads to deliver relevant ads to your target audience. As a result, you can expect better results.

How do you know when you’ve added enough assets? Use the ad strength gauge as a guide, and aim for “Excellent” status. You can achieve it by adding the maximum number of high-quality assets.

Run demand gen ad experiments

Demand gen ads are relatively simple to set up, but they still have plenty of room for testing and optimization. To improve results, plan to run an A/B experiment.

Use Google Ads’ built-in A/B testing tool to compare multiple versions against each other. The experiments tool supports up to 10 versions, allowing you to compare Google ad sizes, formats, and creatives.

Google Ads demand gen campaign checklist

Choose a relevant campaign objective

Optimize for the most important outcome

Build a target audience using first- or third-party data

Select the best ad format (or create multiple ads to leverage all)

A/B test demand gen ads to identify what works best for your goal and audience

The takeaway

With Google Ads’ new campaign type, you can successfully leverage demand generation marketing to drive traffic, consideration, high-quality leads, and sales. Curious how demand gen ads could work for your business?

Reach out to the PPC experts at HawkSEM to learn how we can optimize your advertising and marketing strategy.

Start by taking a look at the number of conversions you’re getting by device category. To find this (and the next few reports), you’ll need to have conversion goals set up in your Google Analytics account. This will let you see the number of conversions and total revenue generated in each of these report types.