Demand Gen Campaigns in Google Ads: How They Work and How to Set Them Up

Demand Gen campaigns are a Google Ads format that replaced Discovery campaigns and Video action campaigns. They allow you to reach users where they aren't actively searching for a product, but are open to inspiration: on YouTube, YouTube Shorts, Discover, Gmail, and the Google Display Network. For many online stores and service businesses, this is the missing link between search and Meta Ads. In this article, we explain how Demand Gen campaigns work, when it's worth launching them, and how to set them up so you don't burn through your budget.

What Are Demand Gen Campaigns

Demand Gen is a campaign focused on generating demand rather than capturing it. In a Search campaign, you respond to a query someone has already typed in. In Demand Gen, you show an ad to someone who isn't searching yet, but according to Google's signals, matches your customer profile. It works similarly to ads on Meta Ads: what matters is the creative, the audience, and a well-configured conversion goal.

The campaign combines visual formats: single image, carousel, horizontal, vertical, and square video, as well as product ads powered by a feed from Google Merchant Center. Google regularly develops this campaign type as part of recurring feature rollouts, adding testing tools, AI-powered creative generation, and features for selected industries such as travel.

Where Demand Gen Ads Appear

• YouTube: in the home feed, in-stream (skippable and non-skippable), and in YouTube search results.

• YouTube Shorts: vertical videos between short-form content, a format directly competing with TikTok and Reels.

• Discover: the article feed in the Google app and on the Google mobile homepage.

• Gmail: the Promotions and Social tabs.

• Google Display Network: partner sites and apps, available as an additional channel.

At the ad group level, you can leave all channels active or select only some of them. By default, we recommend all channels, and we only introduce restrictions when the data shows that a specific placement is generating poor traffic.

Demand Gen vs. Performance Max

Both campaign types use automation and cover YouTube, Discover, and Gmail, but they differ in level of control and their role in the funnel. Performance Max shows ads across all Google inventory, including Search and Shopping, and decides the budget allocation itself. It often captures brand and remarketing traffic—users who would have purchased anyway.

Demand Gen does not appear on Google Search and provides more control: you choose the audiences, channels, and creatives for individual ad groups, and you can see ad previews in every format. That is why we treat it as a tool for acquiring new customers and building demand that is later closed by Search and PMax campaigns.

When It's Worth Launching a Demand Gen Campaign

• You have good results in Search, but traffic from broad keywords has plateaued and you need new demand.

• You have video or image assets that perform well on Meta Ads, and you want to leverage them in the Google ecosystem.

• You sell visual products, such as fashion, home decor, or cosmetics, which are easier to show than to describe.

• You want to reach YouTube Shorts audiences without running separate video campaigns.

Demand Gen is unlikely to work well with very small budgets and services where demand is purely search-driven, such as roadside assistance or emergency repairs.

How to Set Up a Demand Gen Campaign Step by Step

1. Goal and Conversions

Choose the Sales or Leads objective and set an actual purchase or high-value lead as the primary conversion action. If the campaign is to be optimized for purchases, the account should have stable conversion tracking, ideally with enhanced conversions and Consent Mode enabled.

2. Bidding Strategy

To start, choose Maximize Conversions, and after collecting data, switch to Target CPA or Target ROAS. The daily budget should be at least several times the Target CPA so that the campaign can exit the learning phase. In practice, with a CPA of 50 PLN, we plan a minimum of 150–250 PLN per day.

3. Audiences

Start with first-party data segments (customer lists, website visitors) and lookalike audiences based on them. Supplement them with custom segments based on search terms people type into Google and competitors' website URLs. Optimized targeting allows Google to find additional audiences beyond the designated segments.

4. Creatives

Add images in horizontal (1.91:1), square (1:1), and vertical (4:5) formats, as well as videos in horizontal, vertical, and square orientations. Vertical video is crucial for Shorts. Prepare several headlines and ad descriptions. The first 3 seconds of the video should show the product or problem, as viewers decide very quickly whether to scroll past.

5. Product Feed

In e-commerce, link the campaign to Merchant Center. Video and image ads can then display products from the catalog beneath the creative, which significantly increases the conversion rate.

How to Measure Demand Gen Performance

Demand Gen operates higher up the funnel, so evaluate it based on more than just last-click conversions. Look at view-through conversions, brand search uplift, new customer share, and performance within data-driven attribution models. A good practice is an incrementality test—comparing results in regions with and without the campaign. When testing creatives, apply the same principles we describe in our article on creative A/B testing: one change at a time, sufficient budget, and evaluation based on business metrics.

Most Common Mistakes

• Evaluating the campaign after 3–5 days, before the algorithm has collected enough data.

• Lack of vertical video, causing ads in Shorts to display as auto-fitted horizontal assets.

• Using the exact same creatives as in Performance Max, without tailoring them to audiences unfamiliar with the brand.

• Overly narrow audience segments and disabling optimized targeting on a small budget.

Summary

Demand Gen campaigns are the best way in Google Ads to build demand, not just capture it. They provide access to YouTube, Shorts, Discover, and Gmail with more control than Performance Max, but they require strong creatives, stable measurement, and patience when evaluating results. You can find more about the entire ecosystem in our guide to Google Ads. If you want to check whether Demand Gen makes sense for your account, explore our Google Ads service and schedule a free audit.