What is Google Ads Performance Max? (How to Use It + Expert Tips)

Performance Max is a goal-based campaign type that appears across all Google Ads inventory. This means your ads are eligible to appear on the Search, Display, Shopping, YouTube, Gmail, Maps, and Discovery networks.

Here, you’ll find:

1. How Performance Max works
2. What are the pros and cons of Google Ads Pmax campaigns?
3. How to I create a Performance Max campaign in Google ads?
4. Optimization tips for Google Ads Performance Max Campaigns

The former new kid on the block (AKA Google Ads Performance Max campaigns) is here to stay.

Many looked at it skeptically at first, as Google boasted about the new campaign type being the pinnacle of every marketer’s hopes and dreams.

Google took the leap in September of 2022 by replacing Smart Shopping campaigns with Performance Max.

Performance Max isn’t going anywhere, so let’s dive deeper into this campaign type and what it can do for you.

What are Google Ads Performance Max campaigns?

Performance Max is a goal-based campaign type for Google Ads. These campaigns show across all of the Google Ads inventory, so your ads are eligible to appear on the Search, Display, Shopping, YouTube, Gmail, Maps, and Discovery networks.

Crafted dynamically from assets and copy you provide, the ads adapt to various ad formats across Google’s advertising channels without you needing to do any of the work.  

Performance Max (also known as Pmax) campaigns are designed to allow advertisers to structure their campaigns around their goals, not Google networks. So, rather than creating a display campaign, you create a campaign centered around a goal like customer acquisition.

 What are the pros and cons of Google Ads Pmax campaigns?

As with any marketing tool, there are pros and cons. This is especially true of any tools that rely heavily on automation and don’t allow for much manual control. These pros and cons should be weighed carefully against your goals and the possible outcomes.

And of course, we suggest you test Performance Max campaigns to better understand how they can further your account-level goals. 

The pros:

• Focused on performance
• Automated and simple to set up
• AI finds opportunities that your other campaigns may not
• You can target the top and bottom of the funnel within a single campaign
• You can increase your conversion value
• It works to get more converting customers

The cons:

• The reporting is currently limited compared to other campaign types
• There can be brand campaign cannibalization
• You have a limited number of inputs you can control
• You can only use Smart Bidding

 How Performance Max works

Performance Max campaigns use your asset group to create ads on the fly. It combines copy and images (or video) to show users an ad that’s tailored to their behavior and preferences. Google does this by using machine learning to optimize both bids and placements.

This optimization focuses on increasing your conversions or conversion value based on your preferences. Not only is machine learning used for the optimization of these elements, but it’s also used to seek out the best audiences for your ads. 

What are the benefits?

• Exposure across all networks
• No need to create multiple campaigns (though you should have a diverse mix of campaign types)
• Saves time
• Ability to use custom audience segments, in-market and affinity audiences, customer lists, and your data segments
• Google does much of the real-time data analysis and optimization for you

What is the difference between Performance Max and other Google Ads campaigns?

The main difference between Pmax and other campaigns is how machine learning is used. 

Audience signals are a guide for advanced algorithms to seek out the most profitable or highest-converting audiences. Google crunches data and learns from your account performance to target new users to benefit your performance.

Pmax also works well for both lead generation and ecommerce, making it a highly flexible campaign with its reach and versatility. Advertisers are catching on to how these campaigns can be a game changer for them.

As evidence of this, Google Ads Performance Max adoption started to increase back in 2022 as the transition away from Smart Shopping ramped up. By Q3 of the same year, they surpassed Smart Shopping, and two-thirds of Smart Shopping advertisers had completely transitioned to Performance Max campaigns.

 How do I create a Performance Max campaign in Google Ads?

Now that you know more about Pmax, let’s talk about how to set up a new campaign. Luckily, these campaigns are relatively straightforward to create, and it shouldn’t be long until your first search ads are up and running. 

1. Create a new campaign and choose your goal

The first thing you need to do is log in to your Google Ads account. 

If you don’t already have an account set up, you can check out our How to Get Started With Google Ads Guide, which will walk you through the steps. 

Log in, and navigate to your account dashboard. Then choose Campaigns from the left-hand menu. Next, click the plus button and select New campaign.

You will then be prompted to pick your advertising objective. If none of the objectives offered fit what you’re looking for, you can choose the option to create a campaign without a goal’s guidance.

Once you have confirmed the conversion goals for your campaign, your account goals will then be pre-populated by default. You can leave them as they are or edit them and add new ones.

Then you can select “Performance Max” as your campaign type.

If you are an ecommerce advertiser and want to add your products to the campaign, select your “Google Merchant Center account” to connect your product feed.

Last, name your campaign and click “continue.”

2. Set your budget and bidding

The next step in creating a Performance Max campaign is to set your budget. 

Go to the “Budget and bidding” section and enter how much you want to spend per day.

Scroll down to “Bidding” and choose a bid strategy.

Performance Max offers two types of bid strategies:

• Maximize Conversions: When you select this option, your campaigns will be optimized for conversions. You can enter a target cost per action (tCPA or target CPA). Smart Bidding will then work to get you as many conversions as possible for that value.
• Maximize Conversion Value: This option helps you to optimize campaigns to values like sales revenue or profit margins. You select a target return on ad spend (tROAS or target ROAs), and Google places bids based on the value you have entered to drive the best possible results.

Next, go to “Campaign settings.”

3. Add location and language

In the Campaign Setting section, you can choose the location you’d like to target from a list of options.

You can also enter another location and type the location’s name. Here you can select both locations that you want to target and those you wish to exclude.

Under “Languages,” you can pick which languages you want your ads to be served in. Alternatively, you can pick “all languages.” By using all languages, you’ll target people who speak more than one language and they also search in more than one language.

Then scroll down to “Asset Group.”

4. Build the asset groups 

In the “Asset group” section, enter your asset group name.

Build out your asset group by adding media such as images, logos, videos, and copy for headlines, descriptions, CTAs, etc. 

Even though Google will allow you to do final URL expansion, you’ll still need to add a final URL specifically for your asset group. Choose the one that fits the best. 

To create your asset group, you’ll need the following:

• One final URL
• Up to 20 images in the specified aspect ratios
• Up to 5 headlines, 5 videos, and 5 logos 
• A short description
• Up to 4 longer descriptions
• Up to 5 long headlines
• Your business name
• A call to action

You can also add any ad assets (ad extensions) that you want to include here. These include:

• Sitelinks
• Callouts
• Call extensions
• Promotion extensions
• Price extensions
• Lead forms

5. Add audience signals

Your audience signals teach your campaign who is most likely to convert. 

You can add your data segments like customer lists, page visitors, cart abandoners, and other data you own. Custom segments can also be added. These would be keywords, URLs, and apps that reflect the audience you’re trying to target. 

In addition to these audiences, you can also target interests and detailed demographics, like education or pet lovers. Last, you can adjust demographics — gender, age, parental status, and income — to really hone in on your target audience.

Google’s best practice is to add your data segments and custom segments.

6. Publish

Your setup is now complete, and you can publish your masterpiece! 

 Optimization tips for Google Ads Performance Max Campaigns

As with any type of Google Ads campaign, you can set it up and let it run, but to make the most out of it, you should continue to optimize your campaign after it’s published. 

Here are some tips for creating the best Performance Max campaigns possible. 

1. Get your creative assets right

You need enticing, diverse, and applicable creatives that can work at multiple stages of your funnel. Oh, and scroll-stopping images and videos that go beyond just product images. 

Use lifestyle images to spice up your ads rather than making them look like your product feed.

As digital marketing is becoming increasingly automated, more marketers are focusing on creativity as the main draw to attract users to their products or services. Your audience targeting is very important, but the creatives you choose will be one of the deciding factors in whether that audience clicks on your ad or not. 

Luckily, creative is one of the areas you have complete control over, and a high-quality image or video, along with a punchy headline, will go a long way to boosting your campaign performance. 

To ensure that your creativity is performing at its best, you should monitor and improve it. A big part of managing a successful Performance Max campaign is iterative testing and implementing improved designs. 

Tools like our own ConversionIQ can provide insights to help you continuously improve your ad creative.

2. Use placement exclusions 

Another tip for improving your Performance Max campaigns? Exclude placements. 

In the “Content” section in the campaign setup, you can start excluding certain placements for your ads, such as websites, YouTube channels, YouTube videos, apps, and app categories.

3. Exclude URLs and URL expansion 

This important setting is missed by many when they set up their campaigns. Performance Max ads can be set up with “Send traffic to the most relevant URLs” ticked. It’s an option that many advertisers think will work well for them – and it can. 

But you need to be careful with it. If you don’t also use URL exclusions, you can end up sending your prospects to irrelevant pages like your privacy policy or terms and conditions. 

“Only send traffic to the URLs provided” is another option that you could choose. This is often better for the majority of advertisers. Especially if you’re doing lead generation for a specific product or service. In addition, if you create granular enough asset groups, they should each have their own dedicated URL or landing page.

4. Monitor conversion tracking and goals

Conversion tracking and goals are the backbones of your Performance Max campaigns. Don’t try to set one of these up before you ensure tracking is working properly. Then, once you do this, you’ll need to decide your end goals. 

Remember, you don’t have to use all of your account-level goals in your Pmax campaign. You can customize it as you see fit. For instance, it’s probably unwise to try to force the AI to optimize for add-to-carts and purchases in the same campaign. 

The target audience for these may be different, and it may make it more difficult to fully optimize your campaign.

5. Check suitability settings

Another way to control where your ads show is to adjust the suitability settings. You can find this at the account level settings. 

Here you can choose the inventory type: standard, limited, or expanded. This will control the violent and graphic nature of the placements. 

You can also exclude sensitive content, content types and labels, and keywords. These settings can offer brand protection as well as help you find your target audience.

6. Test out customer acquisition rules

Part of you may always want to bid equally for new and existing customers, but they may not always provide you with the same value. 

If you upload first-party data in the form of your customer lists, Google can give you an idea of whether your existing customers or new customers provide more value. You can bid equally for new and existing customers or optimize for new customers.

The takeaway

Performance Max is a great tool that is built on powerful machine-learning technology. 

Google Performance Max campaigns:

• Are goal-based
• Focus on performance
• Work to get you more customers and more value
• Use Google’s AI to go beyond your audiences to reach more potential customers (and ramp up performance for Google search campaigns)

These campaigns complement your other campaigns and help to boost conversion value and ROAS. 

This post has been updated and was originally published in February 2023.