Performance Max Campaigns – One campaign type to rule them all?

On November 2, 2021, Google announced the rollout of Performance Max Campaigns (PMC) to all advertisers. Performance Max Campaigns is Google’s latest Smart Campaign type and is going to replace both Local Campaigns as well as Smart Shopping Campaigns some time next year. In particular, PMC will allow advertisers to automatically serve ads on YouTube, Search, Discover, Gmail, Maps as well as the Google Display network.

Here is what we will talk about:

Performance Max Campaigns - ad formats. Illustration of six mobile devices lined up next to each other, each showing a different ad example across Google’s channels. From left to right, they show ads on YouTube, Display, Search, Discover, Gmail and Google Maps. Above the phones are the logos for each.
Ad formats covered via Performance Max Campaigns

For many retailers who just got used to working with Smart Shopping this might have come as a surprise – especially as the change is significant enough that it calls for a re-evaluation of ad strategies.

This article is for those of you, who were surprised by the announcement and are curious to learn more. But also for those of you who are completely new to the topic. I would like to explain to you what Performance Max Campaigns are, which benefits and disadvantages they bring and who will benefit most from this new campaign type. While I will not go through the PMC setup, I recommend checking out this excellent setup description here.

So, let’s start with a closer look into PMC to better understand what it is all about.

What are Performance Max Campaigns?

According to Google, Performance Max Campaigns “allow you to promote your products or services across the Google Network by creating one easy-to-manage campaign” (Source). From this description, we can already deduce that Performance Max Campaigns will offer a new “one-size fits all” approach to advertising. It will allow advertisers to reach large audiences more easily and reduces the effort for setups and campaign maintenance to a bare minimum. Merchants are also likely to see an influx of additional traffic as PMC covers the entire Google network (search and display).

However, as the saying goes, there is no free lunch. Advertisers can expect certain drawbacks – even though we have yet to see which exactly. For now, it looks like it will reduce possibilities to customise, monitor and steer campaigns based on individual goals and preferences. For example, it will be impossible to factor in margin data, stock information, seasonal information or other information on the item level. A no-go for many advertisers.

What is the difference to Smart Shopping Campaigns?

Many might have expected Smart Shopping Campaigns to be around for longer. Or they might have even expected an expansion of the campaign type. So, what are the differences between Smart Shopping Campaigns and PMC and how significant are they?

What we currently know is that there are two main differences between Performance Max and Smart Shopping Campaigns:

  1. More campaign types are covered with this new format
    Performance Max Campaigns feature a broad range of different ad formats. This includes Display Ads, Text Ads, Shopping Ads etc. This makes it especially desirable if you want to promote your offer across several channels in various forms.
  2. Asset groups are the center of all activities and will replace ad and product groups
    An “asset group” is a combination of various assets. It features text, images, logos, links to YouTube videos and more. Asset groups represent a certain “theme” or audience. They also connect to a particular “listing group” which represents a certain group of items. These listing groups can be based on single item IDs or brand, category, custom labels etc.
Performance Max Campaigns - asset groups which are the new center of all activities and will replace ad and products groups. Asset group in Performance Max campaigns is a combination of various assets.
Asset groups represents a specific theme and cover a certain group of products

Are Performance Max Campaigns right for you?

The decision for or against Performance Max Campaigns stands and falls with the following requirements:

  • ease of maintenance
  • control and customisation
  • transparency and insights

On the one hand, Performance Max Campaigns combine different ad formats and thus help you achieve greater reach with minimum effort. On the other hand, control and transparency is limited – to an even higher degree than what we already saw with Smart Shopping campaigns. Advertisers will therefore have to choose once again: control and transparency vs greater ease of operation and outreach.

With PMC, it looks like advertisers will neither have the possibility to set goals per channel nor to know how the individual channels are performing.

If transparency is important to you and you like using granular campaign structures, PMC will most likely not be the best option for you. If transparency is NOT your top goal and you wish your ads to appear on multiple channels with minimum effort due to e.g. scarce resources, PMC is definitely a good option.

Whether or not Performance Max Campaigns are a particularly great fit for smaller or bigger corporations has yet to be seen. In the end, it will depend mostly on the factors mentioned above. No matter the size of your company, this new campaign type will require some rethinking about how ad campaigns and resources are managed going further.

What does the introduction of PMC mean for your campaigns?

The main impact will be:

  • Smart Shopping Campaigns and Local Campaigns will be replaced
  • You will be able to reach more audiences with one campaign type
  • Advertisers will need to find new ways to improve ecommerce performance

Regular campaign types (i.e. standard Shopping campaigns) will most likely no longer serve once Performance Max Campaigns become active. What does “most likely” mean here? According to Google, Performance Max will show if it drives better performance than existing campaigns. Since it is Google’s new campaign type you can expect that it will be triggered for most queries. For Search campaigns, there will be an exemption: keyword-driven campaigns will take priority. Exact keywords will for now have higher priority and ads will be served from this campaign rather than from PMC.

Overcoming the limitations of PMC

Advertisers will have to consider that with PMC, the use of custom labels will likely reap less success than in the past. Most advertisers we work with currently have a campaign structure based on custom labels that represent margin data, stock, seasonal information or similar. Asset groups, however, are not intended to encourage product-based optimisation. Custom labels can only be applied to the whole asset group (instead of single products). This might actually do more harm than good and leave little room for bringing in this business critical information.

Furthermore, advertisers will have to think about how to deal with the lack of reporting and optimisation options. The consolidation of various campaign types into one means less customisation possibilities for the individual channels and also, as already described, fewer insights. Most likely, retailers will have to move on to different measures to optimise digital ad campaigns and arrange workflows associated with campaign management.

We also advise advertisers to think beyond paid search and to consider the following factors in strategic planning as they have a significant impact on ecommerce success as a whole:

  1. Optimise creatives: How to create visually appealing assets for PMC?
  2. Core performance metric: ROAS vs Basket Margin vs CLV?
  3. Price Competitiveness: How attractive are my prices?
  4. Client profiles and audiences: How does the performance of target audiences differ?
  5. Buyer intent and customer journey: What do people buy?
  6. Assortment strategy: How to forecast demand and optimise stock rotation?

Conclusion

The question remains why Google is moving in this direction. One reason is likely to be that Google Ads management over time has become more and more complex. To encourage adoption and facilitate campaign management for users new to Google Ads, the introduction of Performance Max Campaigns is for sure a good move. It will help advertisers reach every channel with little effort, while the increase in adoption will help Google strengthen their position against big players like Amazon.

It is definitely an interesting move and we are looking forward to new information about this particular campaign type. For now, the first reactions to the feature are mixed and we are curious to learn which impact the new campaign type will really have on performance. We will keep you updated.

Of course, if you want to test this new feature, we are more than happy to assist.