Basics and purpose
What are DemandGen campaigns?
DemandGen campaigns are Google’s most advanced demand generation solution. They reach over 3 billion monthly active users across YouTube, Discover, Gmail, and the Google Display Network. As the successor to Discovery Ads (fully replaced in March 2024), they combine machine learning with visually compelling formats.
The key difference from other campaign types: DemandGen creates new demand instead of capturing existing demand. The campaigns are primarily positioned in the upper and middle stages of the marketing funnel—ideal for awareness-building and consideration phases.
Strategic positioning
DemandGen offers the perfect balance between automation and control. While Performance Max relies on full AI automation, DemandGen campaigns allow for precise manual adjustments of audiences, placements, and bids. The campaigns focus on visual, immersive interfaces rather than text-based search results.
The rankings include:
- YouTube : Home Feed, Watch Next, In-stream Ads, Shorts Feed
- Discover : Personalized feed on mobile devices
- Gmail : Promotions and Social Tabs
- Google Display Network : Fully integrated from 2025
Ideal use cases
E-commerce and retail lead the success statistics, with an average 246% increase in sales. Fashion and lifestyle brands particularly benefit from the visual storytelling possibilities. B2B companies report 3x more leads at 71% reduced costs.
Particularly suitable for:
- Product launches and brand extensions
- Seasonal campaigns with lead time
- Companies with visually appealing products
- Brands with sufficient budget for the learning phase
Advantages over other campaign types
The practical data shows impressive results:
- 61% lower costs than social media campaigns
- 3x higher click-through rates than traditional display advertising
- 15-40% better brand lift metrics
- Access to YouTube Premium inventory that Performance Max often misses
Campaign setup and settings
Campaign structure
Practical experience shows that a consolidated campaign performs better than multiple segmented campaigns. This is due to faster machine learning through concentrated conversion data. Structure your campaigns as follows:
Recommended structure:
- 1 campaign per main goal
- 3-5 ad groups by target groups or product categories
- At least 3 ads per ad group
Campaign goals and bidding strategies
DemandGen supports the following campaign objectives:
- Awareness : For brand awareness (CPM bidding)
- Consideration : For traffic and engagement (CPC or CPV)
- Conversions : For direct actions (Target CPA or Target ROAS)
The available bidding strategies:
- Maximize Conversions : No target CPA for maximum volume
- Target CPA : With a specific cost-per-conversion goal
- Target ROAS : For revenue-oriented campaigns
- Maximize Conversion Value : For e-commerce without a ROAS target
- Target CPC : New since 2024, ideal for traffic campaigns
- Maximize Clicks : For pure reach goals
Important campaign settings
Location and Language Targeting : Leverage the hidden feature of ad group-level targeting for hyperlocal personalization. This enables city-specific ads within a campaign with enhanced machine learning.
Frequency capping : Unlimited by default. Our recommendation: 3-5 impressions per day for awareness campaigns, 7-10 for conversion campaigns.
Ad Scheduling : The “midnight budget error” is real – Google often serves too many ads directly after midnight during budget reset. Block the first 2-3 hours after midnight or use dayparting for optimal distribution.
Budget and bidding optimization
The budget reality
Google recommends a daily budget of 15 times the target CPA. However, practical experience shows that the 5x rule often works just as well. With a target CPA of €50, a daily budget of €250 is sufficient instead of €750. This strategy makes DemandGen accessible even for smaller budgets.
Critical success factors:
- At least 50 conversions for optimal performance
- Plan a 4-6 week learning phase
- No major changes during the first 14 days
Advanced bidding strategies
The 20% trick : Initially set your Target ROAS 20% lower than your historical performance. This gives the algorithm more flexibility and leads to better results during the learning phase.
Value-Based Bidding : Use different conversion values for different actions. Google then automatically optimizes for the most valuable conversions.
Mixed Billing Model Arbitrage : YouTube Shorts (CPM), Gmail (Teaser Click), and Discover Video (CPC/Engaged Views) have different billing models. Use these differences to optimize your budget through targeted placement management.
Budget pacing and scaling
Follow the 10-15-25 principle :
- 10% of the total budget for DemandGen testing
- 15% for proven DemandGen campaigns
- 25% once consistent performance is achieved
The integration with Performance Max follows the 60-40 rule : 60-70% budget for PMax (conversions), 30-40% for DemandGen (awareness/consideration).
Targeting and audiences
Audience strategies
DemandGen treats audiences as “signals,” not strict targeting parameters. This means Google can expand beyond your defined audiences.
Available audience types:
- Custom Segments : Keywords, URLs, Apps
- In-Market Audiences : Users ready to buy
- Affinity Audiences : Interest-based
- Life Events : Life events (moving, marriage, etc.)
- Customer Match : Own customer lists
- Lookalike Audiences : Based on Customer Match
- Remarketing : website visitors, app users, YouTube viewers
The meta-lookalike import trick
A particularly effective workaround uses Facebook campaigns to generate high-quality seed audiences:
- Start a Meta Lead Gen campaign with qualification questions
- Export the email list
- Import this as a Customer Match into Google Ads
- Create 2.5%, 5% or 10% Lookalike Audiences
According to field studies, these “pure” lookalikes perform 25-30% better than native Google audiences.
Optimized Targeting
Pro tip : Turn off Optimized Targeting initially. This gives you full control over audience expansion. Only enable it after 2-3 weeks, when you have sufficient conversion data.
Audience Expansion Control : The three levels offer different reach:
- Narrow (2.5%) : Highest precision for premium products
- Balanced (5%) : Optimal balance for most campaigns
- Broad (10%) : Maximum reach for mass market
Demographic targeting
Use the hidden Demographic Expansion Control for compliance-critical campaigns. You can limit expansion to age/gender while leaving other demographic characteristics open.
Creative and asset requirements
Asset specifications in detail
Image requirements:
| Format | Dimensions | File size | Optimal use |
|---|---|---|---|
| 1:1 Square | 1200 x 1200 px | Max. 5 MB | Standard format for all placements |
| 1.91:1 Landscape | 1200 x 628 px | Max. 5 MB | Discover Feed and Gmail |
| 4:5 Portrait | 1200 x 1500 px | Max. 5 MB | Mobile feeds |
| 9:16 Vertical | 1080 x 1920 px | Max. 5 MB | YouTube Shorts |
All images must be between 600×600 and 64 megapixels. Supported formats: JPG, PNG, GIF (static), WebP.
Video specifications:
- Recommended length : 15-30 seconds (maximum technically unlimited)
- Formats : MP4, MPG, MOV, WebM, AVI, FLV
- Resolution : Minimum 480p, recommended 1080p or higher
- File size : Up to 256 GB
- Aspect Ratios : 16:9, 1:1, 4:5, 9:16 (for shorts)
Text elements:
- Short headlines : 30 characters (3-15 recommended)
- Long headlines : 90 characters (1-5 recommended)
- Descriptions : 70-90 characters (recommended 2-5)
- Business Name : 25 characters
- Call-to-Action : Selectable from a predefined list
Creative best practices from practice
The Lo-Fi Video Secret : Contrary to Google’s recommendations, unprofessional, user-generated videos often perform better than highly produced content. YouTube Shorts in the 9:16 format with an authentic look achieve up to 40% higher engagement rates.
The 5-Second Rule : The key lies in the problem-solution hook in the first 5-10 seconds. The most successful videos follow this structure:
- Second 0-3: Problem/Pain Point
- Seconds 3-7: Suggest solution
- Seconds 7-15: Show product
- Seconds 15-30: Call to action
Asset diversity is critical : Google requires at least three assets per aspect ratio for optimal performance. Best practice: 5-7 assets per format for maximum rotation and testing.
AI-supported asset generation
Google’s new Generative AI tools are revolutionizing asset creation:
- Upload 1-3 hero images
- Use “Generate more like this”
- Create 15-20 AI variants
- Test and scale winning styles
Google guarantees that no two identical images will be created, giving you a unique competitive advantage.
Product feed integration
Integration with Google Merchant Center enables dynamic product ads:
- Performance boost : 33% more conversions without CPA increase
- Minimum requirement : 4 products (use variants for small catalogs)
- Image requirements : 100×100 px (Non-Apparel), 250×250 px (Apparel)
- Automatic optimization : Google selects the best product-asset combinations
Optimization and performance management
Mastering the learning phase
The first 14 days are critical. Avoid any changes during this phase. After 50+ conversions, you can begin targeted optimizations:
Optimization hierarchy:
- Bid adjustments (maximum ±20% per week)
- Budget increases (maximum 20% daily)
- Add new assets (do not remove any)
- Audience extensions
Asset rotation and testing
Implement a 2-3 week asset rotation cycle to avoid ad fatigue:
Week 1-2 : Hook Testing (vary the first 5 seconds) Week 3-4 : Format Testing (video vs. image vs. carousel) Week 5-6 : Messaging Testing (various value props) Week 7-8 : Visual Testing (colors, styles, people)
Performance metrics and KPIs
Primary metrics:
- CTR : Target> 0.70% (average is 0.65%)
- Conversion Rate : Industry dependent, typically 2-5%
- CPA : Should be ±10% of the target after the learning phase
- View Rate (Videos): Target> 25% for in-stream
Secondary metrics:
- Brand Lift : 15-40% above baseline
- Search Lift : 20-50% more brand searches
- Earned Actions : Organic actions by ad view
Channel-specific optimization
With the new Channel Controls (Beta, fully available from March 2025), you can optimize channel-specifically:
YouTube Shorts :
- Vertical videos (9:16) mandatory
- Sound on by default
- Shorter hooks (3 seconds)
- Higher frequency caps possible
Gmail :
- Teaser optimization critical
- Longer headlines perform better
- Product images with a white background
- Clear pricing
Discover :
- Native look preferred
- Lifestyle imagery via product shots
- Emotional headlines
- Mobile-first design
Troubleshooting and error diagnosis
Systematic error analysis
If you have performance issues, follow this framework:
- Check conversion tracking : Are all tags implemented correctly?
- Landing page relevance : Is the message match correct?
- Asset quality : Do all assets meet specifications?
- Audience size : Are the target groups too small?
- Budget limitations : Is the budget being fully utilized?
Common problems and solutions
“Eligible (Limited)” status :
- Cause: Insufficient reach or quality score
- Solution: Expand audiences, improve asset quality
No conversions after 15 days :
- Cause: Usually tracking problems or incorrect bidding
- Solution: Activate Enhanced Conversions, track micro-conversions
High costs without results :
- Cause: Often wrong audience or weak creatives
- Solution: Audience testing, creative refresh
Performance fluctuations :
- Use the “Explanation” function (blue dotted values)
- Check seasonal influences
- Analyze competitor activities
Advanced diagnostic tools
N-gram Analysis : Identifies negative keyword opportunities despite a lack of direct support in DemandGen.
Quality Score Deep-Dives : Analyze impression-weighted quality scores for hidden optimization potential.
Conversion Funnel Analysis : Use micro-conversions (newsletter signups, add-to-cart) to accelerate the learning phase.
Practical recommendations for maximum success
Start checklist
- Budget : Minimum 5x Target CPA daily
- Assets : 3+ per format, all aspect ratios
- Audiences : Customer Match + Lookalikes as a basis
- Tracking : Enhanced Conversions + Micro Conversions
- Patience : Plan for a 4-6 week learning phase
Optimization rhythm
Daily : Check budget utilization Weekly : Analyze asset performance, test new assets Bi-Weekly : Bid adjustments, audience expansions Monthly : Strategic reviews, creative refresh
Success indicators
After a successful learning phase you should see:
- Stable CPAs within ±10% of target
- CTRs above industry benchmark
- Positive Brand Lift Metrics
- Increasing search volumes for your brand
- Cross-channel synergies with other campaigns
DemandGen campaigns are more than just another advertising format—they’re a strategic tool for proactive demand generation. With the right combination of technical expertise, creative excellence, and strategic patience, you can achieve sustainable results that go far beyond traditional display advertising.
