How to Improve Performance Max Ad Campaign Performance
Paid ad managers know all too well that Google remains one of the toughest platforms to optimize due to frequent updates and limited visibility into metrics and reporting. Optimizing paid ads remains one of the toughest nuts for marketers to crack; Performance Max campaigns are no exception.
Since Google introduced Performance Max campaigns to replace previous Smart Shopping campaigns, marketing teams have been trying to get the most out of the dynamic, cross-channel campaign format. Let’s break down what Performance Max is, best practices to get the most out of the PMax campaigns, and dig into bidding strategies.
What are Google Performance Max campaigns?
Though Performance Max replaced Smart Shopping campaigns in 2022, businesses are still figuring out how to optimize the cross-channel, automated approach to Google ads. Instead of being restricted to just Google Shopping and Display placements like Smart Shopping, Performance Max—also known as PMax—includes placements across Search, Shopping, Display, Discovery, YouTube, and more.
Performance Max campaigns automatically create the most effective ad for each channel from your feed and uploaded creative options, offering a seamless advertising solution across many ad types from the top to the bottom of the funnel. It is able to build brand and product awareness at the top of the funnel, show ads in Search and Shopping during the consideration and purchase phases, and create dynamic remarketing ads to people who have engaged with ads, visited the business’ website previously, and previous purchasers.
Performance Max vs. Smart Shopping
Advertiser responses to the shift in Performance Max campaigns came with emotions ranging from raving positive reviews to staunch opposition.
After testing the platform, many companies saw a lower return on ad spend (ROAS) with the new Performance Max campaigns compared to their previous baseline performance in Smart Shopping. Some users found Performance Max costing four times more than Smart Shopping. Naturally, those are not the results businesses want to see.
Performance Max also offers very little reporting or controls in the campaigns for advertisers to help the algorithm to optimize performance. Smart Shopping campaigns offered reporting at the platform, product category, individual product, ad, and search term level of the campaign which gave advertisers valuable insights into how their audience was performing and where their campaigns were most effectively spending their money. Performance Max campaigns have very limited reporting available. The business and the advertiser has to trust that the algorithm is optimizing spend to get the best possible performance without being able to see many breakdowns.
And, even with the reporting that is available, there are very few controls or levers that advertisers can use in Performance Max campaigns to manually improve performance. In Smart Shopping campaigns, one of the biggest optimizers was being able to add negative keywords to the campaign. In this way, you could opt out of showing your ads on searches for your brand (if you would rather save limited ad funds for product searches), competitor searches (which often cost more than product searches and have a lower conversion rate), and searches for products that are not quite the products you have. Both Smart Shopping and Performance Max use broad matching and algorithm understanding of user searches to match the ads with user intent. The algorithm does not always get it right and having manual fixes to that was helpful in Smart Shopping to cut wasted spend. Performance Max does not have this option.
If advertisers get less than optimal results in Performance Max campaigns, the only option in Google is to go back to the traditional Shopping campaigns, which only show ads on the Shopping network and do not utilize the algorithm to target users across many networks and create optimized ads based on their preferences. However, the traditional Shopping campaigns offer many levels to manually optimize Shopping campaigns in a way that Performance Max does not and offers reporting and learning opportunities to advertisers and businesses alike.
This scenario leaves advertisers looking for the best ways to optimize Performance Max campaigns.
How to improve Performance Max campaigns
Noting the difficulty businesses experienced with Performance Max campaigns, Google made adjustments to help companies improve their performance. With those changes in place, here are the best practices for getting the most out of PMax.
1. Test different goals
Test out different campaign goals to see which shows the most impact on your campaign. Try orienting your campaign to maximize conversions with a target cost per action (CPA) or improve conversion value with a target ROAS to see which gets the better results. When the algorithm focuses on maximizing conversions, it tries to capture as many purchasers as possible, no matter how much they purchase. This is often the best goal for prospecting for brand new customers. When the goal is focused on improving conversion value, the algorithm instead optimizes toward shoppers that will bring the company the largest revenue, usually returning customers who have purchased with the company before and are loyal.
2. Don’t forget negative keywords
Even though you cannot add a list of negative keywords to your Performance Max campaign like you could for Smart Shopping in the past, there are a few new workarounds. You are now able to add brand terms as negative keywords to focus campaigns on non-branded searches for products. You can also incorporate negative keywords at the account level to prevent irrelevant ad impressions, as long as you also want them to be blocked from all of your ad campaigns. This practice helps the ads appear to the most relevant audience. Unfortunately, Performance Max campaigns still do not show the search terms that your ad is showing for, other than broad themes, so you may need to rely on other campaigns using broad match keywords to find common negative keywords for your product to add as account negatives.
3. Use new customer acquisition settings
Consider using new customer acquisition settings at the campaign level that enable you to bid higher on—or exclusively—new customers. Without these settings, you may serve ads to return customers instead of expanding your reach to potential new leads. Since the Performance Max algorithm is set to aggressively go after a goal of maximizing conversions or maximizing conversion value, it will often mostly show ads to remarketing audiences, brand searches, and returning customers since they have a much higher conversion rate than a potential customer that is new to your brand. By setting your campaign to focus on new customers, you can make the most of your limited advertising budget.
4. Optimize your product feed
This tip may sound obvious, but make sure your product feed is always up-to-date. Optimize your product feed, especially your category, product title, and product description, for relevant search terms to ensure the most relevant queries trigger your ads. Make sure that your product images are high-resolution and attractive. This practice improves ad relevance and drives higher-quality traffic to your site.
5. Test different assets
The more assets, the merrier. Since PMax automatically cycles through ad assets to find the best option for each channel, it’s in your best interest to give it plenty of options to optimize. Performance Max campaigns will use the product images from your feed, along with your uploaded headline variations, description variations, images, and videos, to create the best ad to fit the placement and the preference of the user. By providing more assets and more asset groups, you allow the algorithm to learn what performs best where for which audience types, improving performance over time.
6. Test Performance Max on its own
Since Performance Max campaigns run across Google channels, it’s a smart idea to run PMax campaigns independently. Otherwise, you risk cannibalizing campaigns on Search, Display, YouTube, Shopping, etc. Brand and Remarketing campaigns seem to be impacted most by Performance Max campaigns. As mentioned earlier, the algorithm is set up to get the easiest conversions, which come from those two audiences, unless they are specifically excluded from PMax. When using Performance Max campaigns, be careful of how it may be impacting performance of other campaigns in your account.
7. Test different search themes and audience signals
The more information you give PMAx, the better. Test out different search themes and audience signals to let the Performance Max algorithm iterate on potential campaign options and find the most effective combinations. Performance Max is set up to learn by customer behavior but will perform best when provided with the best starting point. Google recommends a minimum of 50-100 conversions per month for each Performance Max campaign. With less data, it may not be able to optimize conversions based on customer behavior and may perform worse.
8. Move your best/worst products to manual Shopping campaigns
Some products need special attention. Moving some of your best or worst products into traditional manual Shopping campaigns gives you greater control over bids, budgets, and placements, potentially yielding better results than Performance Max for specific product categories. To prevent cannibalization, remove those products from the feed for the Performance Max campaign and create a separate feed for a separate campaign.
9. Run multiple PMax campaigns
Controlling budgets on different product categories or types through multiple Performance Max campaigns helps ensure a more efficient allocation of resources. The rule of thumb for this approach is to maintain a budget of at least 3x of the target CPA and to strive for a minimum of 50 conversations per month to maximize algorithm optimization and campaign effectiveness. Separating out products with different performance goals into distinct Performance Max campaigns can optimize your PMax performance. For instance, if you have a new product line or a popular group of products, you may want to have those in a PMax campaign optimizing to maximize conversions. However, if you have products with a small profit margin, you may want the PMax campaign to focus on maximizing conversion value instead. Or maybe you want to have a PMax campaign that only bids for new customer acquisition and another that is free to go after returning customers. As long as you have the budget and will get enough conversion volume, having multiple PMax campaigns for products that perform differently or different audiences and goals can help you optimize performance.
What is the best bidding strategy for Performance Max?
The best bidding strategy for Performance Max varies for every business. The most successful campaigns start by focusing on the overall goal (point one above). Keeping budget constraints and the target audience in mind, the goal for your campaign will inform your bidding strategy.
Build campaigns and set bids that optimize CPA to acquire new customers at a specific cost. By setting a target CPA that aligns with your desired acquisition cost, Google’s algorithms automatically adjust bids to maximize conversions within your specified budget. With this goal and bidding strategy, the algorithm focuses on getting the most purchases at your budget, regardless of how large the purchase is. It often has a low ROAS since it is not focused on revenue.
On the other hand, if your goal is to generate revenue and keep ROAS positive, orient your bids around that target instead. Specify a target ROAS for your campaign and let Performance Max adjust bids to maximize the value of conversations while maintaining your specific ROAS. With this goal and bidding strategy, you will likely see fewer conversions and a higher cost per conversion. However, the revenue for each purchase will be high. The algorithm will likely focus on targeting previous purchasers, since they are most likely to make a large purchase from a business they already know and trust.
Of course, every business is different, and your goals will be more nuanced than simply prioritizing CPA or ROAS. Partner with a paid digital marketing agency for support if you’re unsure what you should target or about your bidding strategy.
Getting the most out of Performance Max campaigns
Transitioning from Smart Shopping to Performance Max gave marketers new reach across Google’s platforms. With these new opportunities came new challenges.
While these campaigns automatically surface optimal ads across multiple channels, they require careful strategy to maximize CPA and ROAS and provide few options in reporting breakdowns and management. To improve campaign efficacy, advertisers should focus on testing different goals, optimizing product feeds, and strategically using manual Shopping campaigns for specific products to avoid cannibalization.
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Originally from Mequon, Wisconsin, Katie Cavanaugh is a senior at Northwestern University. She loves rowing for the Northwestern club crew team, Bananagrams, and biking on Chicago’s lakefront path. Growing up, she wanted to become a Supreme Court judge.