Google Ads Demand Gen Campaigns: Complete Guide + Pro Tips

Google Demand Gen campaigns use AI and audience signals to deliver image, video, and product ads across Google’s most visual surfaces, including YouTube, Discover, Gmail, and Google video partners.

In 2024, Google officially replaced Discovery campaigns with Demand Gen campaigns — an AI-powered campaign type designed to help advertisers connect with their target audience on more visual platforms like YouTube and Gmail.

So, how can you use this 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 setup tutorial, best practices, and expert insights from HawkSEM Senior SEM Manager Drew Paddock.

What are Google Demand Gen campaigns?

Demand Gen campaigns are immersive AI-powered ads that appear on visually rich Google touchpoints like YouTube, Gmail, and the Discover feed.

These ads use images, carousels, and video for a more immersive experience to generate interest in a product or service before the user begins an active search.

While traditional Search ads use keywords to target users, Demand Gen campaigns use audience signals, first-party data, interests, and machine learning to identify users who are likely to engage or convert.

That means Demand Gen ads can create interest and engage people before they actively begin searching for your products or services.

With these same machine learning capabilities, Demand Gen campaigns are automatically optimized for conversions like sales or signups.

Where Demand Gen ads appear

Demand Gen ads appear on Google platforms, including:

1. The Google app (Discovery feed)

Demand Gen ads show up on the Google app, where you can view the latest news and events. They also appear on the home page and the Discovery Feed.

2. YouTube

Demand Gen ads appear on the YouTube home feed or watch feed as:

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

3. 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.

4. Google video partners

Demand Gen campaigns can also serve video ads across Google’s video partner network, helping advertisers reach audiences beyond YouTube.

Demand Gen ad formats

Demand Gen campaigns use AI-powered optimization to automatically test combinations of images, videos, headlines, descriptions, and product information across Google’s visual surfaces.

Advertisers can choose from several primary ad formats:

Image ads

Single-image ads use one static image alongside a headline and description. Advertisers can upload up to 20 image assets and Google will automatically display the image that’s most likely to achieve the campaign objective.

Carousel ads display between two and 10 swipeable cards. Each card can display a unique image, headline, URL, and call-to-action (CTA).

Video ads

Video ads use video assets combined with text elements like headlines and descriptions. Advertisers can upload up to five creatives, allowing Google to test different creative variations across YouTube placements.

Product feed ads

Advertisers with a Google Merchant Center product feed can connect it to Demand Gen campaigns to dynamically showcase products and product information across eligible placements.

When a product feed is enabled, Google automatically pulls product information from Merchant Center to create product-focused ads, like the example below from furnishings company Inside Weather.

4 benefits of Demand Gen ads

Google Ads Demand Gen campaigns help create new interest in your brand and offering before prospective customers have started actively searching.

Here are the benefits of Demand Gen campaigns:

1. Reach prospects at scale

Since Demand Gen campaigns include so many Google feeds, they can reach billions of users each month.

2. 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 through image ads in Discover, video ads in the YouTube Shorts feed, and a product feed in Gmail, giving you far more opportunities to drive demand.

3. Expand audience targeting strategically

Demand Gen campaigns offer lookalike audiences, which allow advertisers to reach people who share similar characteristics and behaviors with their existing customers or first-party audience segments.

These audiences can help brands expand their reach while maintaining relevance and minimizing wasted ad spend.

4. Optimize for the outcomes you want

Demand Gen campaigns support 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.

Who should use Demand Gen campaigns?

“Demand Gen is the right fit for advertisers focused on elevating brand awareness and bringing new customers into the funnel, without giving up efficiency to do it,” says Paddock.

“It shines at the upper and mid funnel by putting visually rich creative in front of high-intent audiences across YouTube, Discover, and Gmail, while still delivering a respectable ROAS thanks to Google’s audience modeling and lookalike segments.”

Ecommerce advertisers tend to get the most out of it, Paddock explains, “since the product feed integration lets you pair awareness-driving creative with shoppable product content, so you’re building demand and capturing conversions in the same campaign.”

If a client wants to grow beyond their existing search demand and reach people who aren’t actively searching yet, Demand Gen is usually Paddock’s suggestion.

Google Demand Gen ads vs. Google Discovery ads

While Discovery campaigns were also AI-powered ads delivered to YouTube, Gmail, and Discover, Demand Gen ads introduced powerful new features.

Formats: Discovery ads support image formats, including single-image and carousel ads. Demand Gen expanded capabilities with additional video placements and creative options.

Placements: 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 allowed location targeting and first- or third-party audience segments. Demand Gen campaigns introduced lookalike segments and more advanced audience expansion capabilities built around first-party data.

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: Discovery ads supported standard Google ads, assets, and unique reach reporting. But Demand Gen ads also provide conversion path reporting, which offers more insight into the customer journey.

“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.”

Google Demand Gen vs. Performance Max

While both campaign types use Google’s AI and automation, they serve different purposes in the customer journey.

Targeting: Demand Gen uses an audience-first approach, helping advertisers reach people based on interests, behaviors, and first-party audience signals before they actively search. Performance Max is more goal-driven, using audience signals as a starting point before expanding to find users most likely to convert.

Objective: Demand Gen is designed to build brand awareness, consideration, and demand among new audiences. Performance Max focuses on driving conversions and conversion value by capturing existing demand and optimizing toward business goals.

Placements: Demand Gen ads appear across Google’s visual surfaces, including YouTube, Discover, and Gmail. Performance Max runs across all Google inventory, including Search, Shopping, Display, YouTube, Discover, Gmail, and Maps.

Ad formats: Demand Gen supports single-image, video, carousel, and product feed ads. Performance Max uses asset groups made up of headlines, descriptions, images, videos, and other creative assets that Google automatically combines into different ad formats.

Optimization: Demand Gen campaigns can optimize for clicks, conversions, conversion value, or YouTube engagement, making them well-suited for upper- and mid-funnel objectives. Performance Max primarily optimizes toward conversions or conversion value using Smart Bidding and machine learning.

Use case: Demand Gen campaigns are ideal for introducing your brand to new audiences and generating interest before a search occurs. Performance Max is designed to maximize conversions across Google’s entire inventory, using automation to find users most likely to complete your goals.

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 ecommerce products, you need a Google Merchant Center (GMC) product feed too.

1. Select a campaign 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.

Demand Gen campaigns are available for objectives like sales, leads, website traffic, and product awareness, depending on your account setup.

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.

2. 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 first-party audience lists you can use for remarketing and audience-based Search strategies.
• 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.
• YouTube engagements (views and interactions) optimizes for YouTube channel subscriptions or YouTube follow-on views.

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.

3. 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. End dates are always optional — and aren’t necessary for ongoing campaigns.

4. 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.

5. 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.

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.

7 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.

1. Start with the “Narrow” setting for lookalike audiences

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.

2. Pay attention to the ROAS

Google Ads costs can vary significantly, depending on your objective, campaign type, and industry.

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 worth prioritizing over others.

3. 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.

4. Maximize Demand Gen ad strength with copy and creative

The more high-quality creative assets you provide — including images, videos, and even animated image variations — the more opportunities Google has to match the right ad to the right audience.

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.

5. 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.

6. Test every ad format

“My number one tip is to lean into the ad formats and actually test across all three,” says Paddock.

“Video, image, and product ads each perform differently depending on the advertiser and the goal, so I like to run all three and let the data tell us where the account wants to lean rather than assuming up front.”

From there, treat creative as an ongoing testing engine: keep refreshing video content, rotate in new display creative to fight fatigue, and make sure your product feed is clean and optimized so it can pull real weight on the awareness and sales side.

“The accounts that win with Demand Gen are the ones that keep feeding the system fresh, varied creative instead of setting it and walking away,” says Paddock.

7. Use audience exclusions strategically

Exclude existing customers, low-value audiences or low-value audiences when your goal is new customer acquisition. You can also monitor placement performance and adjust campaign settings where possible.

The takeaway

With the right strategy in place, you can successfully leverage demand generation marketing to drive traffic, high-quality leads, and sales.

Need a little help with your demand generation strategy?

From Google Ads to SEO to social media, our team of experts earn an average 4X ROI for our clients with proven, data-driven strategies.

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

This article has been updated and was originally published in April 2024.