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What is Google Performance Max? How Does It Work?

Published on 30 April 2023 - Updated on 30 April 2024

By Andréa Bensaïd

Founder of Eskimoz. I support companies of all sizes in their digital acquisition strategy.

google performance max

Google’s advertising network continuously strives to enhance advertisers’ performance by enabling them to reach new audiences and generate better results. Ultimately, Google aims to automate all advertising campaigns, and Performance Max campaigns are a new step in this direction – toward automation serving performance.

For advertisers, this new tool is particularly important as it replaced Smart Shopping ads in 2022. So, what exactly are Google Performance Max campaigns, and how can you use them to boost your performance?

What Are Google Performance Max Campaigns?

Google Performance Max is a new type of campaign available on the search engine’s advertising network, Google Ads.

Google Performance Max_2

A Performance Max campaign differs from other advertising levers in two ways:

  • it allows advertisers to broadcast a single campaign across Google’s entire network (Search, Display, Discover, Google Maps, Gmail, and YouTube);
  • it largely relies on automation to generate more effective ads, target audiences more efficiently, and identify the most relevant distribution channels.
Google Performance Max_3

(Source: Google)

By the summer of 2022, two years after their launch, Google Performance Max campaigns had definitively replaced Smart Shopping campaigns. It is therefore essential to understand how they work and to activate the right optimisation levers in order to achieve the best possible results. 

How Does Google Performance Max Work?

As for how they operate, Performance Max campaigns differ from other types of campaigns offered within Google Ads. This is because they are based on automation, particularly on a machine learning model that allows the system to store knowledge in order to make the best possible choices during campaigns.

Thus, it is no longer the advertiser who determines their metrics, but Google’s management that acts directly on all aspects of the campaign: ad creation, targeting, bidding, and the attribution mode (which identifies the interactions that lead to conversions).

As an advertiser, you only intervene at the start of creating your Google Performance Max campaign, in three aspects:

  • By setting advertising goals. Be aware, to access Performance Max campaigns, you must opt for specific goals: sales, lead generation or traffic, promotions, and store visits – or choose not to set any goals at all.
Google Performance Max_4

(GOALS)

  • By providing Google with the basic assets, so that the algorithm can create ads by combining these resources: texts, images, and CTAs.
  • By specifying audience signals, which are essential because they enable Google to target the most valuable audiences for your campaigns. These signals also help to accelerate the algorithm’s learning process, which can then maximise the value of the Google Performance Max campaigns.

Subsequently, Google takes care of everything. The system combines elements (following the same principle as Responsive Ads) with the goal of achieving the most relevant and effective combinations, then selects the channels that convert best, taking into account the interests of the targeted audiences, and in accordance with the objectives specified beforehand. In essence, Google Performance Max relies on audiences, not on searched keywords, with further automation for sharper results.

What Are the Advantages of Performance Max Campaigns?

From the search engine’s perspective, the more automated an advertising campaign is, the more effective it is. According to the network, Performance Max campaigns increase the conversion rate by an average of 13%, for a similar cost per action (Google figures). But beyond these numerical promises, what are the real benefits? What advantages does using Google Performance Max bring you? Here are four main ones: visibility, conversion, value, and the quality of insights.

Google Performance Max_5

Visibility Gain

Due to automation, Google Performance Max campaigns help advertisers reach new audiences across a range of channels. Thanks to this multi-channel ad dissemination, your brand benefits from strong exposure, generating new prospects among populations you could not have reached with other types of campaigns. This is ideal for conquering new markets or launching new products/services.

Increase in Conversions

Performance Max ads are more attractive and better targeted. This results in more qualified traffic, more inclined to purchase. Moreover, the algorithm learns quickly and significantly improves its knowledge of your needs, your target audiences, and the type of ad most likely to convert. Therefore, it is able to more effectively disseminate ads and, if necessary, to position itself on more competitive bids but with higher potential, in order to attract internet users who convert better and spend more – this, by optimising the use of the daily budget allocated to your Google Performance Max campaign.

Value Gain

The system predicts the best combinations between audiences and ads, and focuses on the most relevant distribution channels, relying on both audience signals and customised creative resources. In short, Google Performance Max allows you to reach the most receptive audiences with the most impactful creations, distributing attribution across the entire network – all thanks to a significant volume of data. The result is a higher conversion rate, but also an increased average basket size, thus better profitability for the campaigns.

Really Useful Insights

Google Performance Max provides advertisers with reports focused on search trends and graphic creations. These statistics aid in enhancing your understanding of how automated models function and also how your audiences behave. This allows you to adapt your Performance Max campaigns to optimise your results.

What Are the Best Practices for Using Google Performance Max Campaigns?  

In essence, one can assert that Google Performance Max utilises automation to enhance the performance of businesses and brands.

However, there is a downside to keep in mind: this performance comes at the cost of a certain lack of control over campaigns. Indeed, initiating such a campaign involves giving Google the foundational elements and allowing the algorithm to build the structure itself – including the management of the budget allocated for bidding. For example, it is not possible to intervene in the choice of ad placements: the algorithm takes care of everything.

Google Performance Max_6

Using Google Performance Max thus requires accepting this drawback, but also adopting a few best practices to make the most of this advertising tool. Because, while it is indeed the algorithm that manages the campaign, it remains essential to provide it with the right building blocks upfront. Here are some of these best practices.

  • Define a relevant conversion goal for your Performance Max campaign. Note that the tool allows you to specify multiple goals for the same campaign. However, it is recommended to associate only one goal with each campaign to simplify the analysis of the results.
  • Set your daily bidding budget, determine the desired strategy (cost per action, target ROAS, etc.), and choose the geographical areas targeted by your campaigns.
  • The more assets you enter into the tool, the greater the number of combinations that the algorithm can test. So, you must enter a sufficient number of resources: at least four titles, five descriptions, five visuals (high quality), and as many CTAs. These creations must be updated regularly, taking advantage of specific reportings.
  • Specify your audience signals, particularly by importing your lists of similar audiences and remarketing (thus focusing on the audiences that convert best). This information will allow the algorithm to learn faster and enhance the targeting of the campaigns for better conversion results.
  • Keep control of your URLs, without letting Google define them for you. You will thus be able to propose the URLs of your choice, built in coherence with your advertising strategy.
  • Allow time for the algorithm to perfect its learning: it takes at least 6 weeks to properly assess the performance of your smart campaign. This is also the time needed to have sufficient data. So, you need to be patient!

Is Google Performance Max Right for You?

Finally, make sure that Performance Max campaigns are right for you. This is the case if…

  • you have specific advertising goals (e.g. generating online sales),
  • you want to focus your efforts on a single campaign broadcast across all Google channels simultaneously,
  • you aim to increase the reach of your ads (going beyond keyword-focused dissemination),
  • you intend to maximise the performance of your campaign,
  • you do not have time to create personalised ads yourself,
  • you are ready to delegate the management of your campaign to Google’s algorithm (and to wait for results).
Google Performance Max_7

Be aware that Google prioritises Performance Max campaigns. If you have other ongoing campaigns on Google Ads (for example, on Shopping), there is a risk of cannibalisation that should not be overlooked. This cannibalisation will always benefit Performance Max.

In conclusion, Google Performance Max is a particularly interesting lever for advertisers. With a main advantage: its strong conversion potential, thanks to smart campaigns based on automation. Performance Max campaigns are therefore perfectly calibrated to conquer new markets and increase revenues. In return, they require rigorous upfront configuration … and entail trusting Google’s algorithm! Why not test this new approach to find more customers?

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