Google Ads Demand Gen: Key Updates, Best Practices, and 2025 Strategies
Feb 17, 2025Google Demand Gen is a visual-first campaign type in Google Ads, designed to drive demand across YouTube, Discover, and Gmail. In 2025, it’s become a key tool for both e-commerce and lead gen marketers who want to grow brand awareness and spark mid-funnel engagement.
In this guide, we’ll cover Demand Gen best practices, recent updates, and how to structure campaigns based on your business model.
Key Takeaways
- Demand Gen is a mid-funnel campaign type designed to drive awareness and engagement across YouTube, Discover, and Gmail.
- New updates in 2025 give you more control over placements — including Shorts-only campaigns and separate YouTube budget allocations.
- View-through conversions (VTC) are now tracked, allowing better attribution of users who see but don’t click your ad.
- E-commerce best practices include grouping 10–50 products per ad group, using Max Conversions or Target CPA, and optimizing placements regularly.
- For lead generation, use a data-powered setup with multiple formats per ad group or separate creatives for more control.
- Avoid Max Clicks bidding — it’s less effective in Demand Gen. Prioritize conversion-focused strategies.
- Turn off optimized targeting if you’re running Demand Gen alongside Performance Max to prevent audience overlap.
- Now is the time to test Demand Gen, as CPCs are still lower and competition is rising across visual placements.
Key Updates to Google Demand Gen Targeting
One of the major updates to Google Demand Gen campaigns is the introduction of channel control. Previously, these campaigns ran across multiple placements, including YouTube Ads, Google Discover, Gmail, and Shorts, without precise control over budget allocation per channel. The latest updates allow advertisers to select specific placements, enabling targeted spending. Advertisers can now create YouTube Shorts-only campaigns or specify budgets for YouTube in-stream ads, YouTube in-feed ads, Gmail ads, and Google Display Network placements.
Another key change is the transition of Video Action campaigns into Demand Gen. By July 2025, all Google Video Action campaigns will migrate into this format. Understanding how Google Demand Gen Ads operate will become even more crucial as businesses shift to the updated system.
Conversion Tracking Enhancements for Demand Gen
To align Google Demand Gen campaigns with social media advertising platforms like Meta Ads and TikTok Ads, Google has introduced a new set of conversion tracking reporting columns. These columns now include view-through conversions, which track users who see an ad but convert later through another channel, such as Google Search Ads or Google Shopping Ads. This allows for a more accurate comparison between Google Demand Gen vs Meta Adsperformance. It is important to ensure attribution windows and tracking methods are consistent across platforms when evaluating performance.
Best Practices for Demand Gen in E-Commerce
For e-commerce brands, Google Demand Gen campaigns should be structured differently from traditional Google Ads campaigns. Since location targeting and language targeting now operate at the ad group level, the best approach is to run a single Demand Gen campaign with multiple ad groups, rather than splitting budgets across multiple campaigns.
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Bidding Strategy: Avoid Max Clicks and instead use Max Conversions or Target CPA for conversion-focused optimization. Target ROAS should only be used once sufficient data is collected.
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Ad Groups: Each ad group should contain 40–50 products, but no fewer than 10, to ensure Google’s AI-powered ad optimization has enough data.
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Placement Optimization: Regularly check Google Ads placements and exclude low-performing placements, particularly within YouTube Ads.
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Audience Targeting: Monitor audience segment performance and adjust accordingly. If a Lookalike Audience performs well but receives little traffic, moving it to its own Google Ads ad group can help drive conversions.
π Maximizing E-Commerce Profitability with POAS: Simplify Google Ads Strategies for Better Results
Demand Gen for Lead Generation
For lead generation, Google Demand Gen Ads can be an effective tool when structured correctly. Two primary strategies exist:
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Data Power Approach – This method includes multiple ad formats (image ads and video ads) within each ad group, allowing Google Ads automation to allocate budget dynamically to the highest-performing ads.
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Conservative Control Approach – This strategy assigns one ad format per ad group, enabling better control over Google CPA bidding and budget allocation for each creative type.
While offline conversion tracking enhances Google Demand Gen campaign performance, these campaigns can still be successful without it. When running both Google Performance Max and Google Demand Gen Ads in the same account, it is best to turn off optimized targeting in Demand Gen to maintain audience control and avoid overlap.
The Role of Google Demand Gen in 2025
With Google Search Ads CPCs rising and AI-driven search tools changing user behavior, mid-funnel advertising will become a critical part of digital marketing strategies. Google’s investment in YouTube Ads and video-based advertising signals the importance of video marketing in attracting and engaging potential customers. Advertisers who adopt Google Demand Gen Ads early can take advantage of lower CPCs before competition increases.
As Google continues to refine and expand the capabilities of Google Demand Gen campaigns, businesses should incorporate this format into their Google Ads strategy to stay ahead of market trends and capitalize on its growing effectiveness.
FAQ
What is Google Demand Gen in Google Ads?
Google Demand Gen is a campaign type focused on visual placements like YouTube, Gmail, and Discover. It's designed to build brand awareness and drive consideration by reaching users earlier in the buying journey.
How does Google Demand Gen work?
Demand Gen uses audience signals and visual creatives to show your ads across YouTube, Gmail, and Discover. Google’s algorithms optimize delivery based on user engagement, helping advertisers generate demand before users search.
What are the latest updates to Google Demand Gen in 2025?
New features include placement-level budget control (e.g., Shorts-only campaigns), full migration of Video Action campaigns into Demand Gen, and enhanced view-through conversion tracking for more accurate performance measurement.
When should I use Google Demand Gen vs Performance Max?
Use Demand Gen to build awareness and engage mid-funnel users. Choose Performance Max when you're optimizing for conversions and have strong historical data to guide Google’s automation.
What’s the best bidding strategy for Google Demand Gen?
Start with “Maximize Conversions” or “Target CPA.” Avoid “Maximize Clicks” unless your goal is traffic. Once enough data is collected, you can test “Target ROAS” for profitability.
Can Google Demand Gen work for e-commerce brands?
Yes. It works well when product groups are logically structured (10–50 per ad group), conversion-focused bidding is used, and placements and audience segments are regularly optimized.
Does Google Demand Gen support view-through conversions?
Yes. View-through conversions (VTC) track users who saw your ad but converted later through another channel. This helps measure ad influence more accurately—especially for video formats.