March 7, 2023
eCommerce retailers can reap the benefits of Google’s AI and machine learning with Performance Max campaigns. However, there are control, exclusion, and cost considerations they should monitor closely.
Google first introduced its newest campaign type, Performance Max (PMax), in November 2021. By the end of Q3 2022, PMax had replaced Smart Shopping and Local campaigns.
As digital marketers adjusted to the new campaign type, clear benefits and drawbacks of PMax have emerged.
Below, we provide a brief overview of PMax, how it works, and detailed explanations of its pros and cons. We also explore what type of eCommerce client could benefit the most from PMax plus optimization tips you can use to start or revise PMax campaigns.
PMax is a goal-based, shopping campaign type in Google Ads that can be used to supplement your current marketing efforts.
Through AI and machine learning, it integrates data from shopping and search campaigns into your ad structure, then advertises across YouTube, Display, Search, Discover, Gmail, and Maps to strengthen and optimize your pay-per-click (PPC) strategy, save you time on account management, and maximize successful performance and results.
You don’t set keywords, ad targets, or bids in a PMax campaign like you would for a search ad campaign. Instead, you take the following steps:
Gather all your creative materials–ads, images, logos, headlines, descriptions, and videos–into asset groups
Create a budget with a daily budget period
Set either an optional return on ad spend (ROAS) or cost per action (CPA) target
Provide as much session data from Google signals as possible
You can learn more about building PMax campaigns in this overview. For full step-by-step instructions on how to set up this campaign type in Channable, please read our Help Center article.
The goal of this campaign type is to provide greater end-to-end efficiency by:
Streamlining your marketing strategy, processes, and workflows
Increasing the value of your ad spend
Optimizing conversion opportunities
Using Smart Bidding, PMax decides the optimum placement for your ads, then pulls images, videos, copy, and other content to create ads for each channel.
Smart Bidding uses audience targeting, bidding, budget optimization, and creative performance data to select which ad and channel will convert best according to your goals in real-time.
In other words, the campaign will switch the format of your ads depending on what works best at specific times and in specific places.
PMax creates both search and shopping ads within one campaign, and you can upload all creative assets at the same time. As a result, you won’t need to manage assets across separate campaigns, and campaign information won’t be siloed.
For example, suppose a consumer watches an ad on YouTube for five seconds. Then, they search for the product on Google Shopping, visit the website, and purchase the product.
Performance Max tracks all that information, and all conversions refer back to one campaign. The campaign learns from this information and shows the same YouTube ad to other consumers with similar behaviors to drive conversions.
This isn’t possible in separate search ad campaigns; you’d only be able to tell which consumers were watching your YouTube videos and which consumers were searching on Google Shopping, without connecting the two behaviors.
Since you have the option to select a conversion goal from the start of the campaign, business objectives and spend are prioritized in PMax campaigns.
PMax wants to help you drive as many conversions as possible with the least amount of campaigns.
It optimizes results based on either your ROAS or CPA goals and determines the highest conversion opportunities across all channels.
Almost any eCommerce retailer can benefit from using PMax. The question is whether you’ll find more value with a different campaign type or PMax if you don’t have the budget for both.
It’s important to keep several considerations in mind:
The amount of control you’d like to have over your campaigns
The effect of PMax on other campaign types like search ads
How much PMax campaigns will cost if you have limited conversion data or assets
An experienced PPC specialist likely will use PMax campaigns to supplement and support existing search ad campaign efforts because the control over campaigns is limited.
If you’re still learning about and experimenting with campaign structure, PMax campaigns do provide ease of use and will help you get the most out of Google’s machine-learning capabilities.
PMax is all about automation, which limits your control over most aspects of the campaigns, like which audience is targeted and what types of ads they see.
Roots Network is a search agency with over 20 years of experience in paid search.
The agency works with clients in eight major markets across the US and Europe that have large, complex inventories, and need sophisticated strategies and automation to help execute projects and campaigns.
Its teams have been heavy Channable users since January 2022.
Co-founders Alex Pepermans and Marcel Smal have found PMax campaigns can be quite limiting.
One of the challenges we have with Performance Max as an industry is that it's less transparent. There’s a larger black box over the campaign type. One of the key things you have to do is exclude your branded terms. Otherwise, they’ll be included in Performance Max, and then you have clutter in your data, said Pepermans.
Since this campaign type only lets you bid on conversion or conversion value, if you have specific budget, language, geographies, or bidding strategies you want to execute, you’ll have more control with search ad campaigns.
Alternatively, you could run a separate Performance Max campaign for each specificity, or add more than one conversion goal to a single Performance Max campaign, but you’d still need to track the conversions separately.
Google prioritizes PMax over other campaigns with the exception of exact-match keywords across search campaigns or display campaigns that have a higher ad rank.
Since ads from PMax are more likely to be shown to audiences, you might hear about PMax consuming, or “stealing,” performance metrics from other campaigns.
Guy Schepers, Head of Paid at Fingerspitz, a full marketing services agency in the Netherlands, has been using Channable’s PPC tool to create and scale dynamic customer campaigns for over six years.
When it comes to PMax, he believes marketers run into issues when they’re not sure how to narrow the scope of their campaigns.
“What I see, and it's quite a common mistake, is marketers using the audience signals incorrectly. They make a really big audience, and it's too broad. You should use it to say, ‘This type of customer is my best fit, and I think you have to focus on this type of person,’” he explained.
“I also think you should exclude specific placements. Oftentimes, our clients will see a huge amount of spend on one placement. They have a lot of volume, a lot of spend over there, but most of the volume is misclicks or kids’ channels.”
It’s much more difficult to set exclusions in PMax than search campaigns, but there are several ways to gain back some control over the way PMax affects other campaign types.
You can exclude branded terms, so your PMax campaigns stay focused on finding new customer segments. Consumers searching by brand name are already the most likely to convert.
Likewise, if you have keywords that perform well, you could consider excluding those terms from the materials in your asset groups and use them only in search ad campaigns. Otherwise, it’s likely ads from PMax will be prioritized over those search ads.
While you aren’t able to exclude placements for separate campaigns in PMax, you can create an account-level placement exclusion. You also can use URL exclusions, but keep in mind, it will limit your reach.
PMax campaigns could be a significant investment, and budget will be a heavy factor when determining whether or not to add this campaign type to your overall strategy.
Google recommends, “an average daily budget of at least three times your CPA or cost per conversion for the conversion actions selected for your campaign. Generally the budget should be consistent with other well-performing campaigns in your account.”
Also, it’s important to remember that PMax works best when it has the most information possible. If you can’t provide a lot of conversion data at the start of a PMax campaign, you could find yourself budgeting over $300 a day until it collects enough data to start showing significant results.
Schepers also has clients who’ve run into cost issues creating additional assets specifically for PMax, and those challenges relate back to limited control as well.
The negative side is we can’t see which conversions come from a search or shopping placement. Some of our clients developed videos just to use in PMax campaigns and asked about the impact because of the associated creation costs. They wanted feedback on whether they were working or helping profits. That information isn’t really visible.
If you aren’t able to provide a lot of conversion data, you’ll need to allocate at least six weeks for a new Performance Max campaign to gather sufficient data and produce strong results and actionable insights.
Schepers still sees an upside to the structure of PMax campaigns. Although they can be more costly upfront, his clients have become more willing to talk about brand awareness.
Before PMax, they’d say, ‘No, we don't want anything to do with YouTube, it's not effective enough, we don't see the profit directly coming from there.’ With PMax, the mindset of some of our clients shifted. They’ve become more aware that salience is really important for overall performance.
If you’re still on the fence about whether PMax campaigns would be beneficial to your strategy, think about the length of your customer journey.
“For typical eCommerce clients, the customer journey can be as short as one day. But for the eCommerce platforms with a longer journey, PMax campaigns can be a good deal because they deliver the extra touch points needed to convert,” said Schepers.
He also believes eCommerce platforms that are interested in discovering new customer segments will be more interested in PMax campaigns.
“Those who are curious about the new prospecting possibilities, where you only bid for new clients, could find more value,” he explained.
Below are additional high-level tips that will help optimize your PMax campaigns:
Provide as much preexisting conversion data as you can to jumpstart a successful campaign.
If your campaign is new, set your target to CPA, or “Maximize Conversions,” to maximize a shorter learning period while it’s collecting data.
Provide all available asset types if possible, especially video. Video isn’t a requirement, but if you don’t add your own, then Google automatically generates it for you, and you won’t have control over the quality.
Build out asset groups to optimize your campaign, and make sure your asset groups are varied. If you are selling multiple products, or selling across multiple brands, think carefully about how to divide asset groups and consolidate traffic by theme, so the most relevant ads are being shown. PMax allows 100 asset groups per campaign.
Highlight promotions and discounts in the product descriptions to motivate customers and boost conversions.
PMax allows you to advertise across all channels–YouTube, Display, Search, Discover, Gmail, and Maps.
All creative assets can be uploaded at the same time.
You have the option to select a conversion goal, ROAS or CPA, from the start of the campaign.
PMax provides extra opportunities to find highly relevant customers and conversions, and you’ll likely want to use it to support existing search ad campaigns.
Its automation also limits the amount of control you have, and potentially could impact the effectiveness of other campaign types.
PMax could wind up costing a significant amount to start if you have limited conversion data.
Companies with a longer customer journey that requires extra touch points might find the most benefit with this campaign type.
If you’ve already set up your Google Shopping feed in Channable, you can add a Performance Max campaign. Then, you can compare your search ad and Performance Max campaigns to benchmark performance goals, and gain better insights into your overall strategy.
Our PPC tool generates thousands of search ads in minutes, and lets you add pre-existing assets–headlines, descriptions, and images–to your Performance Max campaigns at scale. Using Channable Insights & Rules, campaign updates are continuous.
New products will be added automatically, and products also will move to the correct campaign accordingly. For example, if a product goes out of stock or profit margins change, it will move to another campaign to create more relevancy and specificity.
We’re working on a new feature that will allow you to auto-sort assets by theme and create multiple, theme-based asset groups for Performance Max across all product feeds.
If you’d like a demo, please contact our sales team.
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