What changes with Performance Max

If you compare Performance Max as a campaign type with existing campaigns, you will immediately notice several things:

With a single campaign, you target all the Google Ads channels

With Performance Max, you create Search and Shopping ads in a single campaign. That's new. Performance Max also enables you to cover many other (extra) channels in the Google Ads network in one go.

Performance Max replaces Smart Shopping

With the introduction of Performance Max, Smart Shopping campaigns disappear. However, you can still use 'classic' Shopping campaigns instead of or as well as Performance Max campaigns. And you can still use 'classic' Search campaigns.

Ads are now called creative assets

In Performance Max, ads are now called "creative assets". In classic Search campaigns, we talked about ads, headlines and descriptions. Headlines and descriptions now come under creative assets, along with other ads like images and videos.

Google puts more emphasis on target groups

The use of target groups is emphasized more in Performance Max. Linking target groups is encouraged more and there are more possibilities to use target groups within Performance Max.

The pros and cons of Performance Max

The changes with Performance Max offer various advantages to advertisers. However, some changes are not necessarily so favorable for advertisers.

Pros of Performance Max

The advantages can be divided into two main items:

Simplicity

Firstly, Performance Max offers simplicity. You no longer need to think about keywords. Google does that for you. And managing bids is not necessary either. You set a ROAS target and Google ensures that you achieve those ROAS targets. Finally, you upload your ads (creative assets) in one go, so you no longer need to upload and manage them in different campaigns. Google combines these creative assets and uses them in different channels.

Revenue

With Performance Max, you can (potentially) achieve better revenue.
    • Google can combine more signals and thus get the algorithms to work better for you. The result: more relevant advertisements for the right target group at the right moment, meaning higher revenue.
    • With Smart Shopping, you could only link one set of ads to your campaign. With Performance Max, you can create up to a hundred asset groups per campaign.
    • Performance Max has a greater reach. Smart Shopping campaigns were not only displayed in Google Search but also outside (Google Display, YouTube and Gmail). With Performance Max, the Discovery environment and Google Maps are added as channels. So, more opportunities for better revenue.
    • Google is introducing new and better ad types in channels like new advertising formats for YouTube.

Cons of Performance Max

There are also disadvantages. For example:

Less insight into keywords and campaign performance

Performance Max provides less insight into keywords and campaign performance. With Smart Shopping campaigns, you couldn't see where you ranked on which keywords. Google has now continued that into Search campaigns. And again, you get no insight into keywords. To accommodate advertisers to some extent, Google offers an overview with the main clusters of keywords. However, that overview is less detailed. An interesting new option is that you can exclude several keywords at campaign level. This new option enables brand name protection within the Shopping results. More about this later in this article.

Scarcity in asset groups

A second disadvantage of Performance Max is the scarcity in asset groups. The number of potential asset groups for Search campaigns is declining, as are the number of creative assets that you can then upload per group. In classic Search campaigns, you can create almost endless advertising groups (20,000 per campaign). With Performance Max, you have a maximum of a hundred asset groups. Compared with Smart Shopping, you therefore have more possibilities to create ads, but the question remains: what are the best hundred asset groups? In other words, how do you choose and prioritize asset groups? Again, we will address this later in this article.

The relevance of Search campaigns may decline

Within classic Search campaigns, you can add more variation in your headlines and descriptions than with Performance Max. And it is no longer possible to include and exclude keywords with Performance Max as it was with classic Search campaigns. Furthermore, in Performance Max, extensions cannot be linked at ad level, only at campaign level. In short, the relevance of Search campaigns within Performance Max may decline. A less relevant campaign means higher costs and lower revenue. Google therefore offers the possibility to prioritize a classic Search campaign if that performs better than your Performance Max campaign. If you include your keywords exactly in a classic Search campaign, they also get priority in the Performance Max campaign.

Disadvantages of ROAS

Within Performance Max, you focus on a Return On Ad Spend (ROAS) target. However, ROAS does not say anything about your actual revenue. If you want insight into the profit contribution of your campaigns, the same applies with Performance Max: you will need to focus your campaigns on Profit On Ad Spend (POAS). This was already a disadvantage for Performance Max with ROAS-directed campaigns. We have already published about this subject, see articles about the subject POAS. With Performance Max, POAS becomes an even more important attention point. Because Google gets more scope to compensate good and bad revenue and thus average out campaigns. We will explain this point in more detail below.

Google averages out campaigns

Firstly, it's important that the ROAS you give in Google is an average that Google must achieve. The average ROAS is the ROAS that you achieve over your total clicks. The average ROAS deviates from your incremental ROAS. The incremental ROAS as defined here is the ROAS that you achieve with the (last) extra click on which your campaign is shown.

The incremental ROAS is lower than the average ROAS. This is because Google first uses the 'easy' ad chances. Easy chances include:

  • Ads on your brand name.
  • Retargeting to your best clients.
  • Ads for popular products with an attractive price

After Google has used the easiest chances, it moves on the next best chances. Your incremental ROAS then falls faster than your average ROAS. Once your average ROAS has been achieved - as set by you - your incremental ROAS will be well below average.

By using Performance Max over several channels at the same time, and with the extra attention for target groups, extra chances arise for Google to advertise compared with in the past. With Performance Max, Google can exchange the worst clicks for less poor ads with a better incremental ROAS.

For example, Google used to show your ad on a less relevant keyword. The incremental ROAS may be low, but Google did it anyway so long as you stayed inside the average ROAS. Imagine that Google can replace this keyword ad by a YouTube video that doesn't produce such good revenue either, but which does better than that poor keyword ad? The effect: your average ROAS declines less quickly, and Google can continue advertising for longer and spend more.

The fact that Google uses the easiest chances is not necessarily so bad. So long as you know what those easy chances generate in terms of revenue. You could then calculate what your ROAS setting should be to ensure your incremental ROAS does not fall below an unacceptable level. However, because Google offers increasingly less insight into your campaign results, you should remove the easy chances, if possible. This gives you more insight into 'pure' results.

It is also important that Google not only creates turnover with campaigns. Google also claims turnover which you could achieve elsewhere. It is important to be alert, certainly for easy chances whereby Google claims but does not create turnover. If big turnover volumes are also involved, you need to be extra alert. Why would you 'give' Google the revenue that are achieved with ads on your brand name?

Everything you need to know about Performance Max

Download our Performance Max white paper where we share everyting we know about this new Google Ads campaign type.

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Combine Performance Max with other 'Classic' campaign types

It is sensible not to see Performance Max as an individual campaign type. By combining Performance Max with classic campaign types, you retain more control over campaigns, and you can improve your performance. Step 1: cover your brand name.

Cover your brand name

Obviously, you don't want to give your brand name to the Performance Max campaign. The revenue on your brand name is often very big, and gives Google a lot of extra scope to use less good ads.

A sample calculation:

  • The average ROAS you want to achieve is 1,000%.
  • With your brand name, for €1,000 in ad spend, Google receives a return of €50,000 or a ROAS of 5,000%.
  • Google can then spend €9,000 also with a turnover of €50,000, achieving an average ROAS of 1,000%.
  • The total spend is €10,000 and the total revenue €100,000.
  • The ROAS from the extra ad spends is then only 555%.

With Performance Max, you have no insight into how much turnover your brand name represents (as you do in the example), or into the return on your other ads. So, you can better keep your brand name out of the Performance Max campaign. To do this, you take the following steps:

  1. You exclude your brand name, variations and combinations with your brand name from Performance Max campaigns. Because Google allows you to exclude a limited number of keywords.
  2. If you then want to prevent only competitors from ranking on your brand name in Shopping, you can create a classic Shopping campaign which covers your brand name. That classic Shopping campaign is useful to fall back on if anything goes wrong in your Performance Max campaign for some reason.
  3. Once you have excluded your brand name, do you also want to remain visible on your brand name within Search? In that case, you can create a 'classic' Search campaign including your brand name, variants and combinations with your brand name. Keywords copied in 'classic' Search campaigns get priority over Performance Max.

 

Start a classic Search campaign

Via a classic Search campaign, you can protect your brand name. It is also a good idea to set up another extra classic Search campaign. If your 'classic' Search campaigns continue to perform better, Google will give them priority, so long as your ROAS setting is the same as your Performance Max campaign. Classic Search campaigns can perform better because you can make much more specific ads focused on the Search results. You can list more titles, descriptions and extensions. Ads become more relevant and therefore convert better. You also maintain an overview of search tasks and thus insight into your market.

Another argument for using a classic Search campaign is that you prevent dilution of your revenue. Let's explain. Within Performance Max, you advertise based on products. If there are product groups (let's call them 'A' products) which generate higher revenue than other products ('B' products), you will be able to bid more for A products. In Search campaigns, you advertise on keywords, and it is much less easy to predict whether you are then selling A or B products. Your revenue and ROAS target tends more towards an average. If you bid more for A products in a Performance Max campaign, those A products will also rank on keywords. The risk is then that you don't show the full range appropriate to that keyword. Because B products are not highlighted. There is also the chance that you still sell B products. Both situations lead to a dilution of your revenue. With a classic Search campaign, you prevent this dilution, and you can adjust your bids more sharply.

With a classic Search campaign you prevent dilution of revenue.

Mark van Werven, CEO Adchieve

An optimal Performance Max campaign

How do you optimally set up the Performance Max campaign? Here we address the following subjects:

  1. The campaign structure.
  2. The use of asset groups.
  3. The use of target groups

 

1. Account structure based on ROAS targets

The first question is how you want to divide campaigns. With Performance Max, you use a ROAS setting. For each campaign, you can only give one ROAS setting. Products for which you want to set the same bid can be grouped together.

Do you want to set a different bid for other products? In that case, you will need to include them in a separate campaign. A reason for separating products from each other may be a difference in profitability. But other factors may also play a role. Maybe you want to raise your bids for products for which you have lots of stock so that you reduce the stock. Or you have a strategic reason for bidding more for product categories so that competitors have no chance of building up a position in the market.

Theoretically, you could even set a different bid for each product. That gives you a lot of campaigns. Each campaign then only builds a small amount of data, meaning that the algorithm does not accumulate enough data to achieve good bids. You will therefore need to group products in campaigns for which you wish to set similar bids.

Each separate campaign containing a group of products then becomes a kind of bid bucket. How many bid buckets you create will depend on the difference in revenue between products and the number of products you have and the data you accumulate to ensure the good functioning of Google's bid algorithm. For the sake of convenience, we assume that you use three bid buckets:

  • The ‘high bid bucket’ (low ROAS).
  • The ‘mid bid bucket’ (mid ROAS).
  • The ‘low bid bucket’ (high ROAS).

The optimal bid per product can vary over time. Adjusting bids per product can then place the product in a different bid bucket. Google can manage this well and includes the history of the product before placing the product in the new bid bucket in the mix of underlying bids.

2. Asset group prioritization and repetition


If products move between campaigns, it is important that the asset groups which were in the low bid, mid bid and high bid buckets correspond. In the new bucket, a moved product encounters its old creative assets again. In this way, you get campaigns with different ROAS settings, different products, but the same asset groups.

An important precondition with Performance Max is that you can only make 100 asset groups per campaign. The potential number of asset groups is often much bigger when you see all the brands, categories, combinations and individual products as a potential asset group. So, you will need to prioritize.

One way to prioritize asset groups is to look at sales volumes. Which brands, which product categories, combinations or which individual products are sold most? The higher the sales, the higher the priority and the more reason to create a separate asset group for that brand, that product category, combination or individual product. Other approaches to help determine the importance of asset groups are search volumes per theme or the size of target groups that you can link to creative assets.

If you still have fewer than 100 asset groups, you can create extra sets of bid buckets with different ROAS settings and different products. Each bid bucket within an extra set contains the same asset groups which only deviate from your previous set(s) of bid buckets.

3. Use Target Groups

Using target groups in Google Ads is not new. However, Google is adding several new specific options to the use of target groups in Performance Max.

  • Within Performance Max, it is possible to use an entire campaign to reach new customers. In classic campaigns, you can bid for customer groups, but you could not exclusively focus on recruiting new customers.
  • In Performance Max, you can link target groups to creative assets. In this way, you give the Google algorithm a boost. You indicate which products and ads are best suited to which target group. You can then tailor your communication much more.

Our Classic Burger

In this article, we have suggested the ingredients for making a delicious burger. The burger basically consists of three parts for structuring your Google Ads campaigns:

  1. Firstly, the buns: consider covering your brand name as the basis. The classic Search campaign to protect your brand name is the lid. The classic Shopping campaign is the bottom.
  2. The burger: the burger is the Performance Max campaign itself. The burger can consist of several campaigns and asset groups. So, you decide which ingredients you include in your burger and how you season and cook the burger.
  3. You finish the burger with a topping. The classic - non brand name focused - Search campaign is the topping. You can also compose the topping to taste. Just a slice of cheese or a full garnish? 

 

ontlede burger compleet

Build your own Burger

You therefore have a range of options to season your burger and cook it 'rare' or 'well done'. You can even make completely different variants. For example:
burger structure veggie burger-1

The Veggie Burger

To make a Veggie Burger, you consciously leave your asset groups empty. The idea is then to prevent you ranking on keywords. But make sure that you also turn off URL expansion as an option, otherwise Google will make creative assets itself. If you also leave out images, you will rank lower in other channels than Google itself and you will keep more control over where your ads appear.

burger structure double burger-1-1

The Double Burger

In the Double Burger, you implement your entire campaign strategy twice. You focus part of your campaigns on new customers, whereby you bid higher. You target the other part on existing customers.

the plain burger

The Plain Burger

You choose convenience and leave everything to Google. You don't protect your brand name and you don't use extra Shopping or Search campaigns (this is an option we do not recommend).

Which burger will you make?

We look forward to seeing which other burgers will be made!

Everything you need to know about Performance Max

Download our Performance Max white paper where we share everyting we know about this new Google Ads campaign type.

Mockup Performance Max dl page