Demand Gen Set Up in 2026: A Step-by-Step Guide

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Demand Gen campaigns are one of the most misunderstood — and misused — campaign types in Google Ads.

When set up correctly, Demand Gen can unlock scale, reduce blended CPCs, and introduce your brand to entirely new audiences.

When set up poorly, it can burn budget fast and show little to no return.

In this guide, I’ll walk you through exactly how to set up a Demand Gen campaign in 2026, when you should use it, and how it fits into a modern Google Ads account.

This tutorial is part of my Get Google Ready for 2026 series, where I break down every major Google Ads campaign type and strategy you need to stay competitive as search behaviour changes.

What Is a Demand Gen Campaign?

Demand Gen is a Google Ads campaign type designed to show ads across:

YouTube
YouTube Shorts
Google Display Network
Google Discover
Gmail placements

Unlike Search, Shopping or Performance Max, Demand Gen is not keyword-led.

Instead, it relies heavily on:

Audience targeting
Demographic signals
Interests and behaviours
Creative quality (video & image)

This makes Demand Gen a powerful upper- and mid-funnel campaign — but only when used for the right reasons.

👉The Biggest Mistakes I see with Demand Gen Campaigns

The 3 Reasons You Should Use Demand Gen in 2026

Before setting anything up, you need to know why Demand Gen exists in your account.

Scenario 1: CPC Resistance

CPC resistance happens when:

You increase your Search or PMAX budget by 10–15%
Your CPCs jump by 20–30%
Conversions flatten or decline

At this point, your core campaigns can’t scale profitably anymore.

This is your signal to stop forcing more spend into Search or PMAX and instead reach new, colder audiences through Demand Gen.

Demand Gen helps you:

Expand reach
Reduce blended CPCs
Feed demand back into your core campaigns

Scenario 2: You Need to Educate Your Audience

Some products and services don’t convert instantly.

If your offer requires explanation — such as:

Why you’re different
How your solution works
Who it’s actually for
Why price is justified

Demand Gen is ideal.

You can use:

Short-form video
Image ads
YouTube Shorts placements

to educate users before they ever search for you.

This is especially powerful for:

New brands
Premium offers
Complex services
High-consideration products

Scenario 3: Diminishing Meta Returns

If you’ve been running Meta Ads and noticed:

Rising CPMs
Falling ROAS
Audience fatigue

Demand Gen can be an excellent expansion channel.

One of the biggest advantages of Demand Gen is that you can reuse proven Meta creatives:

Video ads
Image ads
Short-form creative

and distribute them across YouTube, Discover and Gmail — instantly accessing a massive new audience.

Step-by-Step: How to Set Up a Demand Gen Campaign in 2026

Step 1: Confirm Demand Gen Is a Secondary Campaign

Demand Gen should almost always come after:

Search
Shopping (for eCommerce)
Performance Max

If your core campaigns still have room to scale profitably, fix those first.

Step 2: Budget It Correctly

One of the biggest mistakes I see is under-funding Demand Gen.

For example:

$10/day
Targeting the entire USA

This simply will not work.

Google recommends:

$100/day OR 20x your tCPA

That said, smaller markets can work with lower budgets — but only if targeting is tight.

As a rule:

Test in one city or region first
Scale only once you see account-level impact

Step 3: Choose the Right Objective

Demand Gen works best with:

Conversions
Maximise conversions (with enough data)

Avoid overly restrictive targets early. Let the algorithm learn.

Step 4: Build Audience-Led Targeting

Your targeting should focus on:

In-market audiences
Custom intent audiences
Remarketing lists (if applicable)
Demographics that actually convert

Avoid stacking too many audiences together — clarity beats complexity.

Step 5: Be Careful With Optimised Targeting

Optimised targeting can expand beyond your chosen audiences.

This can be useful only when:

You’re scaling
You want reach expansion

Turn it off when targeting:

Remarketing lists
Cart abandoners
Specific demographic segments

Step 6: Use Strong, Proven Creative

Demand Gen lives and dies by creative.

Use:

Short-form video (especially vertical)
Clear messaging
Strong hooks in the first 3 seconds
Simple, bold visuals

If your creative doesn’t stop the scroll, Demand Gen will not work.

Step 7: Measure Results Outside the Platform

This is critical.

Demand Gen often:

Looks unprofitable in-platform
Delivers strong account-level lift

Look for:

Lower blended CPCs
Increased brand search
Higher conversion rates in Search & PMAX
Geo-lift or time-based lift

Demand Gen is an assist channel, not always a last-click winner.

Final Thoughts

Demand Gen is not a replacement for Search, Shopping or PMAX.

It is a scaling and demand-creation tool.

When used:

At the right time
With the right budget
With strong creative
With realistic expectations

It can be one of the most powerful campaign types in Google Ads in 2026.