Google's Demand Gen - the new golden child

February 28, 2024

What is Demand Gen?

Demand Gen is a new channel on the Google Suite designed to discover and convert new customers through visually engaging content.

Combining the best of Google and Youtube’s visual surfaces, Demand Gen uses AI algorithms to mix images, videos, and text in the best combination possible to reach your target audience.

Demand Gen allows us to expand the impact of the ads through the diverse placements of Gmail, Discover and Youtube, that helps put potential customer in a purchase mindset.

Demand Gen vs Performance Max

You might've noticed that both Performance Max and Demand Gen show up on the same Google spots like Gmail, Discovery, and YouTube.  But how are they different, and should we pick one over the other, or run them together?

Performance Max is all about reaching folks who are either in the market for something or thinking about buying. Say, you want a new t-shirt but aren't sure where to get it from. That's where Performance Max steps in.

Now, Demand Gen? It hangs out between the "hey, I exist" stage and the "hmm, should I buy this?" stage. Instead of waiting for someone to want something, it tries to spark interest ahead of time. For example, you might not be thinking about buying a new t-shirt right now, but Google figures you might in the future. So, it tosses you a Demand Gen ad just in case.

When it comes to the creative stuff Demand Gen works best with big-picture branding, while Performance Max does better with focused product lines or specific service offerings.

So, in short: Demand Gen finds your future customers, while Performance Max talks to the ones you've already got. They don't exactly fight over the same ad space, but there's a chance they could overlap a bit. The do not compete in the same auction, however there is a risk of low level cannibalisation.

How does Demand Gen stack up to other channels?

Demand Generation has proven to be an efficient and effective channel for driving cheap, and engaged, traffic for some of our clients. 

Traditionally, we have looked towards Meta as the “Bread and Butter” of platforms for generating awareness, getting users to site and using exciting + eye catching creatives.

However, since the release of Demand Gen, we have begun to move investment away from Meta campaigns, in favour of Google’s newest channel.

Example of how metrics (from the platform) measure up against each other.

Demand Gen in Summary

Demand Gen is a new addition to the Google suite, designed to captivate and convery new customers through visually engaging ads and placements. 

Unlike performance Max, which targets active purchase consideration, Demand Gen operates between generating awareness and creating interest, making it ideal for Brand activities.

It’s efficacy in driving cost-efficient and engaged traffic has spurred a redirection of investment away from traditional platforms like Meta toward Google's latest channel.

We have seen some interesting performance so far, so It’s worth a test! However, like with any top of funnel channel, its important to monitor it’s impact on sitewide metrics such as MER and COS to validate it’s true performance.

Written by:

Bella Cordwell

Senior Performance Specialist
at Reason

Written by the team at Reason.

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