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 (PMax) campaigns to replace previous Smart Shopping campaigns, marketing teams have been trying to get the most out of the dynamic, cross-channel campaign format.
This article unpacks how the best practices to get the most out of your PMax ad campaigns.
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.
PMax campaigns automatically create the most effective ad for each channel from your feed and upload creative options, offering a seamless advertising solution across many ad types from the top to the bottom of the funnel.
It builds brand and product awareness at the top of the funnel, shows ads in search and shopping during the consideration and purchase phases, and creates 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 PMax 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 PMax campaigns compared to their previous baseline performance in Smart Shopping. PMax was four times more expensive than Smart Shopping for some customers.
Reporting
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.
On the other hand, PMax offers limited reporting or controls to help the algorithm optimize performance and has very limited reporting. The business and the advertiser have to trust that the algorithm is optimizing spend to get the best possible performance without being able to see many breakdowns.
Negative keywords
In Smart Shopping campaigns, one of the biggest optimizers was negative keywords. 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. PMax doesn’t offer the same level of configuration.
Manual fixes
Both Smart Shopping and PMax use broad matching and algorithm understanding of user searches to match the ads with user intent. Manual fixes were helpful in Smart Shopping to cut wasted spend, but PMax doesn’t have this option.
If advertisers get unsatisfactory results in PMax campaigns, the only option in Google is to go back to traditional shopping campaigns. However, this option only shows ads on the shopping network and doesn’t use the algorithm to target users across many networks and create optimized ads based on their preferences.
Traditional shopping campaigns offer many levels to manually optimize shopping campaigns in a way that PMax does not and offer reporting and learning opportunities to advertisers and businesses alike.
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.
Orient 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 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.
Now, we can add brand terms as negative keywords to focus campaigns on non-branded searches for products. We 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, PMax campaigns still don’t show the exact search terms your ad is showing for (other than broad themes). 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. This practice improves ad relevance and drives higher-quality traffic to your site. Also, make sure that your product images are attractive and high-resolution.
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.
PMax campaigns 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 and where for which audience types, improving performance over time.
6. Test Performance Max on its own
Since PMax 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 are impacted the most by PMax campaigns. 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 PMax campaigns, be careful of how it may impact the 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 PMax algorithm iterate on potential campaign options and find the most effective combinations.
PMax 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 PMax campaign. With less data, it may not be able to optimize conversions based on customer behavior and may perform worse.
8. Move best & worst products to manual 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 PMax for specific product categories.
To prevent cannibalization, remove those products from the feed for the PMax 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 PMax 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 PMax campaigns can optimize overall performance. 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 campaign to focus on maximizing conversion value instead. Or, you can run 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 campaigns for products that perform differently or have different audiences and goals can help you optimize performance.
What is the best bidding strategy for Performance Max?
The best bidding strategy for PMax 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’s 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 PMax adjust bids to maximize the value of conversations while maintaining your specific ROAS. With this goal and bidding strategy, we see fewer conversions and a higher cost per conversion.
The revenue for each purchase will be high. The algorithm will focus on targeting previous purchasers since they’re most likely to make a large purchase from a business they already know and trust.
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 a 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.
Partnering with Perfect Search Media is your business’s shortcut to getting the most Performance Max has to offer.
Contact Perfect Search Media to take your PMax campaigns to the next level.