This guide offers you deeper insights and optimization strategies for your Demand Gen campaigns.
On this page:
- Overview of Bid Strategies
- Advanced Bidding Strategy Goals
- Smart bidding overview
- Demand Gen: Understanding Performance
- Demand Gen: Common Challenges
- Demand Gen: Evaluating Performance
- Demand Gen: Performance Checklist
Overview of bid strategies
Demand Gen campaigns offer a variety of performance bidding strategies. These strategies primarily focus on either driving efficiency or volume.
| Strategy Category | Bid Strategy | Goal |
| Efficiency based bidding | Target cost per action (CPA) | Get as many conversions as possible at your set target CPA. |
| Target return on ad spend (ROAS) | Get as much total value from all of your conversions at your set target ROAS. | |
| Volume based bidding | Maximize conversions | Get as much conversion volume as possible within your campaign’s budget. You do not set a CPA target here. |
| Maximize conversion value | Get the most conversion value within your campaign’s budget. You do not set a ROAS target here. | |
| Click based bidding | Target cost per click (CPC) | Get as many clicks as possible at your set target cost per click (CPC). Target CPC tries to keep your average CPC equal to the target you set. |
| Maximize clicks | Get as many clicks as possible within your campaign’s budget. You do not set a CPC target. |
Tip on target setting: Setting the right target CPA/ROAS is very important. It is recommended to plan your media strategy and assign your CPA/ROAS targets to be in-line with your social campaigns. Alternatively, it is very common to check your desired CPA/ROAS by starting with a “max” strategy.
Advanced bidding strategy goals
Goal setting
Your campaign will only optimize for the goal of the specific bid strategy you select, and not for other metrics. For best results, clearly define your primary objective and select the corresponding bid strategy. Avoid evaluating based on a secondary metric that conflicts with the bid strategies’ primary goal.
If you’re using a deeper conversion goal like purchases, it is recommended to set up a shallow conversion goal(s) in the account as non-biddable to help the system learn and ramp up more quickly.
Demand Gen campaigns offer a variety of performance bidding strategies. These strategies primarily focus on either driving efficiency or volume.
Driving efficiency
- Target CPA: Get as many conversions as possible at your set target CPA.
- Target ROAS: Get as much total value from all of your conversions at your set target ROAS.
- Target CPC*: Get as many clicks as possible at your set target cost per click (CPC).
Information: If you have a desired return on investment (ROI) for your Demand Gen campaign, then use a “target” strategy.
Driving volume
- Maximize conversions: Get as much conversion volume as possible within your campaign’s budget.
- Maximize conversion value: Get the most conversion value within your campaign’s budget.
- Maximize clicks*: Get as many clicks as possible within your campaign’s budget.
* Click based bidding should not be used for conversion efficiency. For click goals, use click-based bidding that will require no conversion tracking set up.
Smart bidding overview
Smart Bidding refers to bid strategies that use machine learning to optimize for conversions or conversion value in each and every auction, a feature known as “auction-time bidding". You can set a bid, budget, and goal, and the algorithm will then optimize the campaign plan to deliver the best results at that bid and budget for that goal.
Important:
- At the launch of every campaign, you can learn what works and what doesn't for that campaign's unique set of goals, assets, targeting, bid, budget, and so on. Changing settings forces the campaign to do some or all learning over again; large changes can amount to a total reset.
- Limit bid adjustments to a maximum of +/- 15% across the campaign duration. Crucially, refrain from making any changes whatsoever during the initial learning period.
- Do not jump to conclusions about performance until the campaign has moved past the learning stage. The waiting period can be tough, but you can monitor your learning period status in Google Ads reporting directly.
- Instead of making one big change, slowly flex bids by 5-10% (no more than 15%) per week on campaigns. Limit the big changes to a maximum of +/- 15%.
- Campaign changes can temporarily affect the performance of your campaign
Two important factors for smart bidding
- Budget: Your budget should be at least 10 times your target CPA. If there is a low daily budget, that’s usually the top reason a new Demand Gen campaign underperforms. For example, if your budget is $100 and your bid is $10, you are capped at 10 conversions/day at your set target.
- Conversion Volume: The campaign needs to generate at least 50 conversions to get a good foundational understanding of what successful impressions can be for you.
- Note that consolidating your ad groups helps ensure conversion performance.
Demand Gen: Understanding Performance
Many factors of your campaign can lead to different performance outcomes. Here are a few foundation concepts of performance.
- Intrinsic Volatility: Even for a perfectly stable campaign, with no changes to your budget, targeting, or ad creatives, you'll still see some natural variation in your daily results. This is intrinsic volatility. It's usually found in campaigns with a smaller number of average daily conversions.
- Campaigns with lower daily conversion volume will see higher intrinsic volatility merely due to random chance. For example, the day-to-day change in CPA for a campaign that drives 4 or 5 conversions each day would usually be larger than for a campaign that achieves 99 or 100.
When you're analyzing your campaign's performance, review trends over a longer period rather than focusing on daily performance. Short-term volatility is a normal part of the advertising landscape, especially for campaigns with lower conversion volumes. This helps you make more informed decisions for your advertising strategy.
- Campaigns with lower daily conversion volume will see higher intrinsic volatility merely due to random chance. For example, the day-to-day change in CPA for a campaign that drives 4 or 5 conversions each day would usually be larger than for a campaign that achieves 99 or 100.
- Conversion Delays: Conversion delays can occur from the time it takes for a user to perform the action after seeing the ad, and the data processing and attribution lag that can occur.
- This is a normal part of data processing and attribution. Expand the date range considered to include multiple weeks (last 30 days is a common lookback window). You can view your conversion delay by reviewing your campaign and attribution reporting.
When evaluating performance, set a date range that accounts for delayed conversions. For instance, if you have a 24–hour average conversion delay, yesterday’s performance stats are probably incomplete. Make sure to follow data strength best practices to improve your measurement and ROI.
- This is a normal part of data processing and attribution. Expand the date range considered to include multiple weeks (last 30 days is a common lookback window). You can view your conversion delay by reviewing your campaign and attribution reporting.
- Ad Group Consolidation:If an ad group has seen very sparse conversions for over a week (many days with 0), it lacks enough information to continue bidding confidently, which can occasionally lead to undesirable behavior (for example, spend spikes).
When evaluating performance, assess individual ad groups and consolidate any that are not ramping or seeing many conversions. Start with more broadly targeted ad groups where possible.
Demand Gen: Common Challenges
Here are some common challenges that can help you for your next campaign!
| Challenge type | Challenge | Recommendation |
| Campaign changes | Making a change is one of the most common causes of performance shifts. | If you made a recent change, you may see fluctuations in performance. Wait for at least 30-50 conversions to evaluate performance after a change. Note, making a change to a creative will reactivate policy approvals, which take around 24-48 hours to complete. |
| Channel performance | You want to leverage channel controls to run the Demand Gen campaign on specific channels. | Run Demand Gen campaigns across all channels unless there's a specific reason not to. Running across all channels allows for full optimization, generally achieving the best performance and increasing opportunities for lower CPAs. Over time, the system will optimize for the channel(s) that perform best for your conversion goal. |
| Performance skews and shifts | You want more distributed performance across channels, assets, devices, and so on, but sometimes the performance skews. | Every campaign tries to optimize to achieve its goal with maximum efficiency, including the distribution across channels, assets, and so on. If necessary, it is possible to create separate ad groups or campaigns with different targeting, but note that the efficiency may be impacted as a result of doing this approach. |
Demand Gen: Evaluating Performance
Demand Gen campaigns offer a variety of performance bidding strategies. These strategies primarily focus on either driving efficiency or volume.
- Driving Efficiency: “Target” strategies are aimed to hit your set target. Evaluating performance based on maximizing spend and conversion volume or on spend and conversion volatility would not be aligned with what “target” strategies are trying to achieve.
- Driving Volume: “Max” strategies are aimed to spend your budget and deliver conversion volume. Evaluating performance based on maintaining a certain CPA or on CPA volatility would not be aligned with what “max” strategies are trying to achieve.
Build out an evaluation framework
Aligning on your measurement framework ahead of launch is critical. Adjust the below timeline as you see fit, but this is our overarching timeline for performance evaluation.
Measurement recommendations
- Before launch, align on your test goals/KPIs in order to measure the proper outcomes of your campaign.
- Scope out any measurement studies ahead of campaign launch.
- Ensure you leave enough time before analyzing your campaigns to account for conversion lag time.
Campaign reminders
- Align to Demand Gen’s best practices for the most optimal approach.
- Have a consolidated campaign structure for optimal learning (avoid creating too many ad groups).
- Adjust your campaign as necessary, but avoid making drastic changes.
Demand Gen: Performance Checklist
Here are a few facets that can affect the performance of your campaign.
- Goal alignment: This is a critical starting point. Decide on what matters to you most and what goal you are trying to achieve. From there, pick a bidding strategy that meets that goal. If you are using an efficiency strategy, select a target based on your social campaigns.
- Conversion tracking: Foundational campaign set up and tracking are very important for smart bidding to work effectively. Make sure you have reviewed your conversion tracking set up, and follow data strength best practices.
- It is recommended to optimize for a deep conversion action (like a purchase conversion) that you ultimately care about, but make sure you are also tagging/tracking all the shallow conversion actions throughout the funnel so the learning period can be faster. Set up shallow conversion goals as non-biddable at the account level to help the campaign ramp. Lastly, if you have an app, make sure you leverage Web to App Connect for optimal performance.
- Budget: Sufficient budget is crucial for campaign success, acting as the fuel for your efforts. A best practice is to set your budget to at least 10 times your CPA bid. Utilize Performance Planner to explore various budget scenarios and estimate the resulting performance improvements.
- Learning period: Allow the campaign sufficient time to successfully conclude the initial learning period. Crucially, it is advised to refrain from implementing excessive modifications until the campaign has successfully yielded a minimum of 50 conversions.
- Ad group consolidation: It is best practice to monitor your ad groups. If you notice that one hasn’t seen conversions for many days, consolidating or broadening your targeting may improve performance.
- For retailers (Product feeds): Connect your product feed to turn your ads into dynamic virtual storefronts and improve campaign performance.
- Performance factors: Intrinsic volatility and conversion lag are normal and can cause temporary performance fluctuations, especially for campaigns with lower conversion volume. When you’re evaluating performance, review trends over a longer period rather than focusing on daily performance.
- Performance evaluation: Remember to evaluate the performance of your campaign based on the bidding strategy that you’ve selected. If you’re comparing Demand Gen vs Social Platforms, make sure you use Conversions (Platform Comparable).