In an era where consumer journeys are becoming increasingly complex, marketers need strategies that not only capture demand but also generate it. Google’s Demand Gen campaign type offers a new approach to reaching high-intent audiences across visually immersive platforms. This article explores what Demand Gen is, why it has become a hot topic in digital marketing, and how CMOs can leverage its potential for performance-driven growth.

What is Demand Gen?

Google’s Demand Gen campaign type is a next-generation solution designed to drive demand and engagement across Google’s most immersive platforms, including YouTube, Discover, and Gmail. Built as a successor to Discovery campaigns, Demand Gen leverages Google’s AI to enhance creative delivery, targeting, and performance measurement.

By using audience signals, lookalike modeling, and engaging visual creatives, Demand Genenables advertisers to attract potential customers at scale while keeping a performance-driven mindset.

Why is Everyone Talking About Demand Gen?

The buzz around Demand Gen stems from its ability to merge branding and performance marketing into a unified strategy. Traditionally, digital marketers have had a clear separation between demand generation (focused on brand awareness) and direct response campaigns (focused on conversions). Google’s Demand Gen challenges this division by providing a data-driven approach to demand creation while maintaining measurable performance outcomes.

Several key reasons contribute to its growing popularity:
· AI-Powered Audience Targeting: Demand Gen uses Google’s machine learning to identify high-intent audiences, allowing brands to reach potential customers who are likely to engage and convert.

· Expanding Beyond Search: While Google Ads has historically been dominated by Search, Demand Gen pushes into visual and video-driven environments, aligning with consumer browsing behavior.

· Enhanced Creative Capabilities: With support for multiple creative formats, including short-form video, carousels, and immersive imagery, Demand Gen allows advertisers to craft more engaging campaigns.

Demand Gen and Performance Max (PMax): key differences

Both PMax and Demand Gen campaigns are part of Google Ads' AI-powered advertising solutions, but they serve distinct purposes and are optimized for different campaign goals. Here’s a breakdown of their key differences:

1. Campaign objective & focus

· PMax: Designed for conversion-driven advertisers looking to maximize performance across Google's entire inventory. It uses AI to optimize all of Google's placements, including Search, Display, YouTube, Discover, Gmail, and Maps.

· Demand Gen: Focuses on driving demand and engagement rather than direct conversions. It is optimized forvisually engaging ad formats across YouTube (including Shorts and in-stream), Discover, and Gmail to nurture interest before conversion.

2. Audience targeting

· PMax: Uses intent-based targeting, leveraging Google's audience signals, search intent, and historical conversion data to find users who are most likely to take actions.

· Demand Gen: Uses interest-based targeting, leveraging lookalike audiences, custom segments, and engagement history to reach users in the consideration phase.

3. Ad formats & Creatives

· PMax: Uses a mix of text, image, and video ads optimized for all Google channels, dynamically assembling assets based on performance predictions.

· Demand Gen: Prioritizes rich, visual formats, particularly video and image ads, to create immersive experiences that drive awareness and engagement.

4. Success indicators

· PMax: Uses conversion-based measurement models and AI-driven optimization to allocate spend toward high-performing placements and audiences.

· Demand Gen: Focuses more on engagement metrics, such as clicks, views, and interactions, rather than direct last-click conversions.

5. Placement Channels

· PMax: Runs across all Google channels, including Search and Shopping, making it a full-funnel solution.

· Demand Gen: Focuses on visual and social placements, running only on YouTube, Discover, and Gmail.

When should you use what?

· Use PMax if your goal is maximizing conversions and ROAS across all of Google's channels with minimal manual optimization. Learn from our best-in-class approach to PMax.

· Use Demand Gen if your focus is on top-of-funnel engagement, brand awareness, and nurturing demand through visually compelling content before conversion.

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Nevertheless, is Demand Gen just really about brand buzz and not about the sales? Let's see about it in the case study below.

Case study: Where does Demand Gen stand in the digital marketing funnel?

Let’s revisit our client, Brand X, a mid-luxury fashion brand who tested running Demand Gen campaigns on their Google Ads activities. Their goal was to understand what Demand Gen contributes to the revenue coming from Google Ads and from there, integrate it into BAU Google ads activities.

Profile:

· Medium high-end fashion brand, with largest presence in Germany, but also popular throughout Europe.

· Annual paid media budget: approx. €2M, with 50% allocated to Google Ads.

Campaign setup and evaluation:

· Allocate 15% of total Google Ads budget to Demand Gen campaign and run it for a month.

· Analyse Demand Gen’s potential with conversion path analysis based on Google Analytics 4 data (attribution model: DDA – data-driven attribution).

Results: Demand Gen belongs to upper- and mid-funnel

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In conversion paths that involve multiple Paid Search campaign types and segments, Demand Gen only appears at the end in 14% of the total conversion paths, while most the time, it stays in the mid (51%) and beginning (35%). This means that users coming from Demand Gen are not likely to convert right away when they see the ad, but they might convert through other channels such as Generic Text Ads, where conversion intent at the end of the funnel is the highest.

Moreover, Demand Gen has the highest new customer rate compared to all other segments, and 31% higher than the avg. new customer rate of Google Ads activities.

Conclusion

Google’s Demand Gen campaign type offers a new way to engage users across visually rich Google platforms like YouTube, Discover, and Gmail. Unlike conversion-driven PMax, Demand Gen focuses on building awareness and nurturing interest by using AI-powered targeting and immersive creative formats. This helps brands stand out in a crowd of Internet users and influence high-value audiences before they’re ready to convert.

For marketers looking to drive both engagement and performance, integrating Demand Gen with other Google Ads solutions can make your brand stick, which incrementally unlocks significant growth for the business.

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Running Demand Gen but unsure of its impact? Reach out to us to ensure your full-funnel strategy delivers.

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About Crealytics

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Crealytics is an award-winning full-funnel digital marketing agency fueling the profitable growth of over 100 well-known B2C and B2B businesses, including ASOS, The Hut Group, Staples and Urban Outfitters. A global company with an inclusive team of 100+ international employees, we operate from our hubs in Berlin, New York, Chicago, London, and Mumbai.

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