Google’s Performance Max: Explained

Tim Cross 31 October, 2022 

Just under a year ago Google launched ‘Performance Max’, a new advertising product which, as the name suggests, is geared towards performance advertisers. At its core, Performance Max is pitched as a buying tool which advertisers can use to get the most out of their spend on Google channels, in an uncomplicated manner. It was launched as an entirely new product, but has also been designed to replace similar existing tools within Google Ads, namely Smart Shopping and Local campaigns.

But while on the surface it sounds fairly innocuous, Performance Max has proven somewhat controversial, with some in the industry questioning the black box nature of how Performance Max spends advertisers’ budgets, and arguing it’s designed to drive money towards poor quality Google inventory.

Here’s the ins and outs of Performance Max:

The Basics

Performance Max essentially lets advertisers run one single campaign which runs across all Google Ads inventory – YouTube, Display, Search, Gmail, Maps, and Discover – all geared towards the same performance objective.

Advertisers using Performance Max choose their campaign objective, set specific conversion goals and their overall budget, and then upload assets, data, and audience signals relevant for the overall campaign. Google says Performance Max will then optimise bids across inventory types towards the advertiser’s chosen campaign goals.

Google says Performance Max is designed as a compliment to search campaigns, meaning it won’t conflict with an advertiser’s existing keyword targeting bases search campaigns which are run through Google Ads.

The Details

The idea behind Performance Max is that it takes out a lot of the legwork for advertisers in targeting performance goals. As such, the campaign setup is fairly straightforward.

Advertisers choose one campaign objective – either sales, leads, or local store visits can be run as Performance Max campaigns. They then choose their conversion goals, which are groups of similar conversion actions which the advertiser wants to drive (‘Purchases’ would be one conversion goal, covering multiple different types of specific purchases). Conversions can be weighted as more or less important through values – advertisers choose either to maximise total conversions, or total conversion value.

The advertiser also uploads a set of assets – a mix of images, videos, headlines, descriptions, and logos. Google uses these assets to automatically generate ads for each channel, meaning the advertiser doesn’t have to upload finished ad designs, just the basic assets. Audience signals – essentially types of users which the advertiser wants to target – can also be chosen, while factors like language and location can be set for targeting purposes.

And that’s pretty much it. There are other controls and adjustables within the Performance Max setup, but campaign creation can be pretty simple.

What’s less simple – and less clear – is how Google uses all this information to choose which inventory to bid on. Performance Max uses ‘Smart Bidding’, a set of bidding strategies developed by Google which draw on contextual signals, audience signals, and machine learning to optimise bid, and improve bid optimisation over time. The idea is that Google learns what works and what doesn’t work, and adjusts its strategy accordingly.

But this is very much a black box – advertisers using Performance Max don’t get much insight into what’s really happening with their campaigns. There are forecasting and measurement tools available within Performance Max, which will advise advertisers on what they can change in their campaign setup to get better results. But it’s lacking in terms of overall campaign data – for example how each specific channel is performing.

The Pros and Cons

One of Performance Max’s big strengths is also a big weakness, depending on your perspective. Namely, that Performance Max basically asks the advertiser to hand over assets and basic campaign parameters, and let Google do the rest.

The appeal is obvious for smaller businesses which don’t have the resources to scrutinise campaign data to try to optimise campaigns across channels themselves. Performance Max doesn’t require much to get started, and you’ll find many within the industry who report strong results using the tool.

But others are much less inclined to trust Google to run the show. There are several reasons for this – some will worry that the lower levels of control will result in bad ads appearing in bad places. Others will back themselves to optimise their own campaigns across separate channels more efficiently. Even Google will admit that the machine learning element of Performance Max may take time to figure out what works and what doesn’t – time that some agencies may be unwilling to grant it. And there have been reports of lead generation Performance Max campaigns generating lots of leads, but with low conversion rates.

And there are concerns that Performance Max represents the direction that Google wants to take its advertising tools generally – reducing the feature set in order to prevent advertisers tinkering with settings and harming their own campaign results, but thereby taking these same valuable tools out of the hands of those who know how to use them.

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About the Author:

Tim Cross is Assistant Editor at VideoWeek.
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