Performance Max is the new campaign type in the Google Ads suite that is simpler to manage and can bring great results…or sometimes not-so-great results.
In this blog post, I will show you how to learn and start using Performance Max without costly early mistakes.
First, some history. In 2021, Google introduced a new campaign type called Performance Max:
Performance Max is a new goal-based campaign type that allows performance advertisers to access all of their Google Ads inventory from a single campaign.
The popularity of the new campaign was tepid, as most advertisers kept using well-performing Smart Shopping campaigns.
The adoption skyrocketed in September 2022, when Google forced all Smart Shopping campaigns to migrate to Performance Max.
Since then, the effectiveness of Performance Max has been increasing.
Google says that advertisers who use Performance Max achieve, on average, over 18% more conversions at a similar cost per action
However, Performance Max does not always bring better results than standard shopping campaigns.
In this post, I will show you what Performance Max campaigns are, when you should and should not use them, and how to optimize them for maximum effectiveness. Let’s get started!
How are Performance Max campaigns different?
If you have not used Google Ads before, the seeming simplicity of Performance Max is tempting: you set up conversion goals, determine the budget, add assets, and let it do its AI magic.
The reality is not that simple. To better understand how Performance Max works, let’s see how they are different.
Here are four features that set Performance Max apart:
- Nearly complete automation. You don’t have to worry about choosing keywords, targeting, or bidding strategies. All you have to do is provide some creative elements, such as images, videos, headlines, and descriptions, and let Google handle the rest.
- Advanced smart bidding. Performance Max campaigns use advanced AI and machine learning to find and reach potential customers across Google’s platforms. They also adjust the bids for each individual ad based on the likelihood of conversion, resulting in more sales with (hopefully) lower costs.
- Data-driven optimization. Performance Max campaigns rely on a large amount of conversion data to learn and improve over time. The more data you have, the better the campaigns will perform. (We’ll explain how to properly set up conversion tracking below.)
- Broad reach. Performance Max campaigns allow you to reach new audiences across Google’s channels and networks with a single campaign. Your ads can appear on Search, Shopping, YouTube, Display, Discover, Gmail, and Maps, depending on where your customers are.
Benefits of Performance Max Campaigns
Here are some of the benefits you can achieve with Performance Max campaigns:
- Drive more value. Performance Max campaigns use data-driven attribution to measure the impact of each touchpoint across channels on your conversions. This way, you can optimize your budget for the most effective ads and channels.
- Harness the power of automation. Performance Max campaigns leverage Google’s real-time insights into consumer behavior and preferences, as well as your own audience signals, to predict which ads, audiences, and creative elements will work best for your business.
- Focus on the big picture. Performance Max campaigns allow you to focus more on the big picture rather than the details. Instead of spending time on manual settings, you can rely on Google’s automation to handle the optimization process. With Performance Max, you only need to make a few adjustments, but they have a far more significant impact on the campaign performance.
Downsides of Performance Max Campaigns
Knowing the strengths and weaknesses of a tool is important in your decision to use it. Performance Max campaigns are not without their challenges. Here are some of the main issues that you might face with Performance Max campaigns:
Limited control – Performance Max campaigns are fully automated by Google, which means that you have very little say over how your ads are designed, targeted, and delivered1. For instance, you can’t easily exclude display or video ads that you don’t want to show.
Low transparency – Google does not share much information about where your ads are displayed, how they perform, or what factors affect the bidding and optimization. This can make it difficult for you to evaluate what works and what doesn’t and to fine-tune your strategy accordingly.
Risk of cannibalization and competition – Performance Max campaigns can compete with other Google Ads campaigns in your account for the same ad space and audience2. This can result in the loss of traffic or conversions from your existing campaigns or higher costs due to bidding against yourself. You need to closely monitor your campaign performance and budget distribution to avoid wasting money or missing opportunities.
Longer learning periods – Every campaign with smart bidding requires time to learn before reaching its full potential. This is especially true for Performance Max. Learning periods can last up to 6 weeks.
When not to use Performance Max
Performance Max campaigns are not a magic bullet for online advertising. They require sufficient data and learning time to be profitable. That’s why I would avoid using Performance Max in these scenarios:
- New account/no conversion history Performance Max campaigns may waste money on non-shopping traffic and take longer to learn if you don’t have enough historical data to guide them.
- Monthly budget under $1K Performance Max campaigns need a reasonable budget to generate a meaningful number of conversions. With a low budget, you may not see much return on your investment.
- Fewer than 50 monthly conversions Performance Max campaigns work best with a high volume of conversion data. While there may be exceptions, campaigns with low conversions may not perform well with Performance Max.
- Advertiser’s Intolerance to Initial Poor Results Performance Max campaigns need time to learn and optimize before they can deliver optimal results. If you can’t afford to wait or tolerate a drop in performance during the learning period, Performance Max campaigns may not be for you.
In the next section, we’ll look at how to set up Performance Max campaigns.
How to set up a Performance Max campaign for ecommerce?
Let’s look at creating a Performance Max campaign for an ecommerce account.
- Sign in to your Google Ads account and click on the plus button to create a new campaign.
- Select your campaign objective. Select “Create a campaign without a goal’s guidance”
- Select Performance Max as the campaign type
- Select the conversion goals. Here, you are telling the campaign what it should optimize for. If you have added purchase conversion action, they will show up. Select it. Pay attention not to select duplicate conversion actions (i.e. don’t select both Google Ads and Analytics purchases). You can remove non-needed conversions by clicking a three-dotted icon.
- Choose your budget and bidding strategy. Set a daily budget amount. This budget establishes a monthly charging limit for the campaign. Your monthly charging limit is your average daily budget times the average number of days in a month. Your spending may vary each day, but you won’t pay more than your limit. Set a daily budget to be at least the average cost per conversion. The more budget you can afford, the faster the campaign learns.
For Performance Max, Google recommends to set your average daily budget at least 3 times your CPA or cost/conv. for your conversion actions.
- As for the bidding strategy, I recommend using Maximize conversions or maximize conversion value. This is a safe way to ramp up the campaign without overspending. You can introduce targeted goals (tROAS or tCPA) later.
- Select the language Select the languages your customers speak
- Automatically created assets. Select whether you let Google generate text assets and pick the final URL beyond the product’s landing page. I want to keep as much control as I get, so I leave these unchecked
- Create Asset Group(s) You need to set up one or more asset groups. Asset groups is a way to group your products, ad copy, banners, video, and audience signals together.
- Listing groups Click on the pencil icon to select the products you want to promote in this asset group. You can also organize your listing groups into categories or subcategories to target specific products.
- Assets These are the images, videos, headlines, and descriptions you add to your Asset Group. These assets are automatically mixed and matched based on which Google Ads channel (YouTube, Gmail, Search, and others) your ad is being served on. You need these assets: Headline: 3–5 30-character headlines Long Headline: 1 90-character headline Descriptions: 1–4 90-character descriptions Short Description: 1 60-character description Images: Up to 20 images including square images and at least 1 landscape (1.91:1) image Logo images: At least one square logo Videos: Up to five 10+ sec Youtube videos, If you don’t have one, Google will create videos automatically when possible
Assets best practices
Google recommends to:
- Refresh your creative assets because they’re your most powerful tools to drive performance, and allow you to customize the campaign to promote new products, menu items, or sales.
- Add at least 7 image assets, including one format 1200 x 1200.
- Don’t delete the assets with ”low” ratings without replacing them with new ones.
- Add more assets as your marketing message evolves, or add new assets to capture additional users.
- The more assets, the better. More assets means more ad combinations we can serve across networks to maximize performance.
No-asset (Shopping-only) Performance Max campaigns
A popular setup is to run Performance Max campaigns without assets (called feed-only, shopping-only, or naked Performance Max campaigns). This setup helps to minimize the non-shopping ads on a Performance Max campaign. Google acknowledges the no-asset setup:
For advertisers with a Merchant Center feed, you don’t need to supply any additional creative assets to launch a Performance Max campaign. However, we do recommend that you provide creative assets to allow your campaign to serve maximally across surfaces and have optimal performance. Ads may be auto-generated on your behalf when possible. Note that automatically created assets aren’t available for Shopping ads.
- – Choose your audience signals. Add an audience signal to reach the right audiences faster. Start by creating or adding an audience. Performance Max will use it as a starting point to find new conversions across Google. Audience signals have three sections: Custom segments. where I add 3–5 most popular search terms and the websites people browse to (typically competitors’ URLs) Your data. I place here remarketing audiences and customer lists. Interests & detailed demographics. I typically add the closest in-market audiences [image audience signals] Adding more than the above to custom audiences is not necessary.
Once you have completed these steps, you can review and launch your Performance Max campaign. Google will automatically optimize your campaign performance based on your goals, assets, audiences, and listings.
Source: Conversation with Bing, 7/26/2023 (1) How Google Performance Max Works [+ 4 Best Practices]. https://yourmarketingpeople.com/blog/performance-max-campaigns/. (2) How to set up Performance Max campaigns the right way – Search Engine Land. https://searchengineland.com/performance-max-campaigns-set-up-386684. (3) Create a Performance Max campaign – Google Ads Help. https://support.google.com/google-ads/answer/10724896?hl=en. (4) Setting Up Google’s Performance Max Campaigns – Practical Ecommerce. https://www.practicalecommerce.com/setting-up-googles-performance-max-campaigns. (5) All you need to know about Performance Max campaigns for eCommerce. https://blog.converted.in/en-us/blog/all-you-need-to-know-about-performance-max-campaigns-for-ecommerce. (6) What Are Performance Max Campaigns? – Neil Patel. https://neilpatel.com/blog/performance-max-campaigns/. Here is a possible blog section for “How to optimize Performance Max campaigns for ecommerce?”:
How to optimize Performance Max campaigns for ecommerce?
Performance Max campaigns are fully automated, but that doesn’t mean you can’t improve them with some optimization tips and best practices. Here are some ways to optimize your Performance Max campaigns for ecommerce:
Commit to your campaigns. Performance Max campaigns need enough data and time to learn and perform well. The learning period can last from one to 6 weeks. no changes to your campaign settings or assets Feed Optimization Campaign Structure
- Keep it simple to start ( especially with no data). One campaign is a good start
- Split into campaigns if you need Budget and/or bidding control (provided each campaign gets 30–50 conv per month)
- Split asset groups by category/type
- Use Simple audience signals Refresh assets periodically
Bid adjustments Budget adjustment Performance Max Videos Negative keywords Automatically added assets Performance Max Placements
- Commit to your campaigns. Performance Max campaigns need enough data and time to learn and perform well. Be prepared to budget at least $50–100 per day for at least a month and avoid making frequent changes to your campaign settings or assets.
- Use as many assets as possible. The more creative assets you provide, the more options Google has to create relevant and engaging ads for your customers. You should use at least 10 images, 5 videos, 5 headlines, and 5 descriptions for each asset group. You should also use different sizes, formats, and styles of assets to increase your ad coverage and reach.
- Optimize your asset groups. Asset groups are the building blocks of your Performance Max campaign. You can use them to group similar products or services together and target specific audiences or goals. You should create at least 3 asset groups per campaign and use clear names and descriptions for each one. You should also review the asset report regularly to see how your assets are performing and identify areas for improvement.
- Use the customer acquisition feature. If your goal is to generate new customers or leads, you can use the customer acquisition feature to prioritize conversions from new users over existing ones. You can also provide values to indicate how much each new customer or lead is worth to you. This will help Google optimize your campaign for customer acquisition and value.
- Optimize your audience signals. Audience signals are the types of customers or segments that are more likely to convert for your business. You can use existing audiences, such as remarketing lists or similar audiences, or create new ones based on your customer data or Google’s suggestions. You can also exclude audiences that are not relevant or profitable for your campaign. You should review the audience report regularly to see how your audience signals are influencing your results and adjust them accordingly.
- Use campaign exclusions. Campaign exclusions allow you to prevent your ads from showing on certain channels, formats, or placements that are not relevant or effective for your business. For example, you can exclude brand keywords from Performance Max campaigns if you already have a separate Search campaign for them. You can also exclude certain websites, apps, or videos from your Display or YouTube ads if they don’t match your brand image or target audience.
- Choose the right bidding strategy. Performance Max campaigns use automated bidding, so you don’t need to set manual bids. However, you can still choose between different bidding strategies based on your conversion goals and budget. For example, you can choose to maximize conversion volume or value, set a maximum CPA, or set a target cost or conversion value.
- Use ad extensions. Ad extensions are additional information that can enhance your ads and make them more relevant and useful for your customers. For example, you can use call extensions, location extensions, or promotion extensions to encourage customers to call you, visit your store, or take advantage of a special offer. You can also use sitelink extensions, callout extensions, or structured snippet extensions to highlight specific features or benefits of your products or services.
- Use the Performance Planner tool. The Performance Planner tool is a forecasting tool that can help you plan and optimize your Performance Max campaign performance. You can use it to see how different budget and bidding scenarios can affect your results and find the optimal settings for your campaign goals.
- Use the Insights page. The Insights page is a discovery tool that can help you find new opportunities and trends for your business. You can use it to see how your campaign performance compares to other advertisers in your industry, discover new audiences that match your goals, and get recommendations on how to improve your campaign performance.
By following these optimization tips and best practices, you can make the most of your Performance Max campaigns and grow your ecommerce business online. In the next section, we’ll show you how to integrate Performance Max campaigns with your overall ecommerce strategy.
Source: Conversation with Bing, 7/27/2023 (1) 10 Ways to Optimize Your Performance Max Campaigns for … – WordStream. https://www.wordstream.com/blog/ws/2023/01/23/optimize-performance-max-campaigns. (2) Optimization tips for Performance Max – Google Ads Help. https://support.google.com/google-ads/answer/11385582?hl=en. (3) The Ultimate Guide To Performance Max Campaigns (2023). https://www.storegrowers.com/performance-max-campaigns/. (4) How to Optimize Google Performance Max Campaigns – Go Fish Digital. https://gofishdigital.com/blog/how-to-optimize-google-performance-max-campaigns/. (5) Maximizing Your E-commerce Sales with Google Performance Max Campaigns …. https://azameo.com/blog/maximizing-your-e-commerce-sales-with-google-performance-max-campaigns/.