This Is Why Your Performance Max Campaign Is Getting No ConversionsNov 07, 2022
Are you seeing a weekly decline in your Conversions and sometimes even a decline in your spend EVEN if you are increasing your budget?
If that’s you don’t worry you are not alone because I am seeing this as a very common trend with Performance Max campaigns that I am reviewing.
And if this is not you right now, I still want you to watch this video because if you don’t have one core setting right in your Performance Max campaign you are likely to also see this same issue very very soon.
The issue relates to people having a core misunderstanding of how Performance Max campaigns work, which then means they are setting up their Performance Max campaigns & bidding strategies incorrectly.
Benefits and Misinterpretations of Performance Max Campaigns
This section will explore each benefit given by Google in detail, clarifying its true meaning and addressing common misconceptions.
Unlocking New Audiences Across Google’s Channels & Networks
- Benefit Explained: Performance Max campaigns are engineered to tap into Google's vast array of channels and networks. This feature enables advertisers to reach potential customers in places they might not have considered, from YouTube ads to Google Maps listings.
- Common Misinterpretation: Many assume that this benefit equates to an automatic and broad-reaching engagement with the perfect audience. However, this is not entirely accurate. The effectiveness of reaching new audiences largely depends on how well the campaign inputs (like assets and conversion goals) align with the target audience's interests and behaviors.
Driving Better Performance Against Your Goals
- Benefit Explained: These campaigns are goal-oriented, focusing on achieving specific objectives like increasing online sales, generating leads, or driving traffic to a website.
- Common Misinterpretation: There's a misconception that setting a goal guarantees its achievement. In reality, the campaign's success in reaching these goals is contingent upon several factors, including the accuracy of the set goals, the quality of the campaign setup, and ongoing optimization based on performance data.
More Transparent Results
- Benefit Explained: Performance Max is designed to provide clearer insights into how different components of your campaigns are performing. This transparency is meant to guide advertisers in making informed decisions.
- Common Misinterpretation: Some users misinterpret this as having complete visibility into all aspects of the campaign, like exact placement of ads. However, while Performance Max offers more data than traditional campaigns, some elements, particularly those related to machine learning decisions, remain opaque.
Steering Automation with Your Campaign Inputs
- Benefit Explained: While automation is a key component of Performance Max, the campaigns allow for steering by using inputs like audience signals, assets, and conversion goals.
- Common Misinterpretation: There's a tendency to either underutilize this control or expect too much from it. It's important to understand that while inputs can guide automation, they don't offer absolute control over every aspect of the campaign.
Simplifying Campaign Management & Optimizing Ads
- Benefit Explained: Performance Max aims to streamline campaign management by automating bidding and ad placements, making it easier for advertisers to manage and optimize their ads.
- Common Misinterpretation: Simplification doesn't mean a 'set-and-forget' approach. Effective campaign management still requires regular monitoring, analysis, and adjustments based on performance data.
Audience Discovery and Asset Grouping in Performance Max Campaigns
A critical aspect of harnessing the full potential of Performance Max campaigns lies in mastering audience discovery and effective asset grouping. This section explores the strategies and best practices for these crucial components.
The Role of the Built-In Discovery Campaign
Performance Max includes a built-in Discovery campaign, which is instrumental in finding and reaching potential customers across Google's networks. This feature uses machine learning to identify and target users who are likely to be interested in your products or services based on their online behavior.
Implications for Audience Targeting: The Discovery component of Performance Max is designed to broaden your reach. It identifies potential customers who may not be actively searching for your product but are likely interested based on their online activity and profile. This proactive approach to audience discovery is a significant departure from traditional reactive search advertising.
Best Practices for Creating Asset Groups
- Focus on Products or Sub-Product Categories: When setting up asset groups in Performance Max campaigns, it's advisable to organize them around different products or sub-product categories. This approach ensures that the ads are highly relevant to the specific interests of targeted audiences.
- Avoid Separate Asset Groups Based on Audiences: Contrary to some traditional campaign strategies, in Performance Max, it's not effective to create separate asset groups based solely on different audiences. Since the campaign already includes a Discovery element, it's better to let the algorithm find the right audience for each product or category.
- Leveraging Asset Variety: Incorporate a diverse range of assets (images, videos, headlines, descriptions) within each group. This diversity allows Google’s algorithm to test and optimize the combination of assets across different networks, helping to identify which combinations resonate best with various audience segments.
Common Mistakes in Asset Grouping
- Over-Segmentation: Creating too many asset groups can dilute the effectiveness of the campaign and hinder the algorithm's learning process.
- Inconsistent Messaging: Ensure that the messaging across different assets within a group is consistent and aligns with the product or sub-product category being targeted.
Setting Target ROAS Goals in Performance Max Campaigns
One of the most critical aspects of Performance Max campaigns is the setting of Target Return on Ad Spend (ROAS) goals. This section will delve into what Target ROAS is, how to set it correctly, and common misunderstandings that can hinder campaign performance.
What Is Target ROAS
Target ROAS is a bidding strategy used in Google Ads to optimize your campaigns based on a return on ad spend goal. It's a way of telling Google how much revenue you expect to earn for every dollar spent on ads. For instance, a Target ROAS of 400% means you aim to earn $4 in revenue for every $1 spent on ads.
Functioning of Target ROAS Bidding: This bidding strategy uses historical data and machine learning to predict future conversions and adjust bids accordingly. It takes into account the past performance of your ads (usually over the last 60-90 days) and optimizes future bids to achieve the set ROAS goal.
Setting Realistic ROAS Goals
- Based on Historical Data: When setting a Target ROAS goal, it’s crucial to base it on your actual historical conversion data. Setting an unrealistically high or low target can lead to poor campaign performance.
- Aligning with Business Objectives: Your Target ROAS should align with your broader business objectives and marketing goals. It's important to strike a balance between aiming for high returns and setting achievable targets.
Common Misconceptions about Target ROAS
- Not a Guarantee of Results: Some advertisers mistakenly believe that setting a Target ROAS is a way of instructing Google to achieve that specific return. However, it's more of a guide for the algorithm rather than a guaranteed outcome.
- Dynamic, Not Static: The effectiveness of Target ROAS bidding can fluctuate based on various factors like market trends, seasonality, and changes in consumer behavior. It’s not a set-it-and-forget-it metric.
Balancing ROAS and Impressions in Performance Max Campaigns
A successful Performance Max campaign requires more than just focusing on Return on Ad Spend (ROAS); it also involves paying attention to impressions and how they can impact overall campaign effectiveness. This section addresses the importance of balancing ROAS goals with strategies to maximize impressions.
The Significance of Impressions in Performance Max
Impressions refer to the number of times your ads are shown. In the context of Performance Max campaigns, a high number of impressions can indicate broader reach and increased brand visibility.
Impact on Campaign Success: While ROAS focuses on the financial return from your ad spend, impressions are crucial for understanding your campaign’s reach and audience engagement. Neglecting impressions can lead to missed opportunities for brand exposure and audience growth.
Strategies to Maximize Impressions
- Expanding Audience Reach: Utilize Performance Max’s capabilities to explore new audience segments. This might involve testing different asset groups or experimenting with broader targeting options.
- Optimizing Ad Creatives: Continuously refine your ad creatives (images, videos, headlines) for better engagement. More engaging ads can increase the likelihood of ad display and interaction, leading to more impressions.
- Adjusting Bidding Strategies: Consider using bidding strategies that prioritize reach, such as maximizing clicks or viewable CPM (cost per thousand impressions), especially in the early stages of the campaign to build awareness.
Balancing ROAS and Impressions
- Setting Dual Objectives: While setting your campaign goals, consider both ROAS and impressions as key performance indicators. This dual focus helps in achieving a balance between financial efficiency and market exposure.
- Periodic Review and Adjustment: Regularly review both ROAS and impression metrics. If your campaign is achieving high ROAS but low impressions, it might be too narrowly focused. Conversely, high impressions but low ROAS could indicate a need for more targeted advertising.
Common Pitfalls to Avoid
- Over-Focusing on ROAS: Solely concentrating on ROAS can lead to overly restrictive targeting, missing out on potential new customers and market segments.
- Ignoring Long-Term Brand Building: High impressions contribute to brand awareness and recall, which are crucial for long-term business growth. Over-emphasizing immediate returns (ROAS) can undermine these long-term benefits.