Performance Max was billed as “a new way to buy Google ads” when it was first announced in late 2020. Since then, the anticipation had been building until, after a year of beta testing, Performance Max finally launched to everyone in November 2021.
Fast forward to now, and we’ve had a chance to see how Performance Max works. But does it live up to the hype and bring increased automation, deeper insights, and optimized campaign performance to Google Ads as promised?
While some tout the ability of Performance Max campaigns to drive impressive results through machine learning, others call out its limitations, such as the lack of control that is inherent with automated bidding and the limited visibility into campaign and ad insights.
This guide will answer your most burning questions about Performance Max, including:
By the end, you and your agency will be seasoned pros who can wow your clients with your knowledge on one of the most significant changes to Google Ads in years.
The good, the bad, and the ugly.
What Is Performance Max on Google Ads?
Google Performance Max is a new goal-based campaign type that, as the name implies, is focused on maximizing performance. Specifically, it’s about optimizing the performance of using Google Ads campaigns to increase conversions.
Think of Performance Max as your all-access advertising pass to the entire Google Network, which includes heavy-hitters like Search, YouTube, Gmail, and Shopping (and that's not even mentioning Discovery and Display, which are all included as well!).
Performance Max is the newest offering from Google Ads. It’s a campaign type that serves your agency’s ads from a single source. It also works simultaneously with your keyword-based search campaigns to help you find more of your client’s customers across all of Google’s channels.
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Not only does Performance Max promise a new, automated way to buy ads across all of Google’s channels from a single campaign, but it also brings deeper insights for the data nerds with machine learning and upgraded reporting capabilities.
While that all sounds amazing, Performance Max isn’t perfect. The timeline before people start to see stable performance seems to be about 6-8 weeks, so you need to test it for a while. And many marketers complain that Performance Max cannibalizes Search campaigns, even though Google says that Search campaigns should be prioritized over Performance Max.
But don’t worry, we’ll show you how to avoid that and other potential pitfalls of Performance Max later in this article.
When To Use Google Performance Max Campaigns
Google recommends you use Performance Max when:
You have specific advertising and conversion goals: We recommend setting SMART goals to get the most out of it.
Your ads aren’t limited to a particular channel: If your ads have limitations, constraints (i.e., budget, time, lack of resources, etc.), or were made for a specific channel, this isn’t the time to use Performance Max. It’s best for campaigns that allow flexibility to adapt in real-time.
You want an all-access pass to Google’s advertising channels using a single campaign: As mentioned before, everything is included here.
You want to take your keyword-based Search campaigns even further: Performance Max will help you reach even more people, which means more conversions.
How Does Performance Max Perform?
One of the biggest differences that separate Google Performance Max campaigns from other Google Ads campaigns is automation and machine learning. With Performance Max, you provide the information (such as campaign goals, budget, and target metrics), and Google handles the targeting and delivery of the ads using Smart Bidding.
Smart Bidding is an automated bid strategy that optimizes for conversion across all channels, allowing for real-time management of bids, budgets, audiences, creatives, attributions, and more.
On top of that, Performance Max also claims to learn what works best through machine learning, meaning it should get better the more you use it. But, as noted above, not everyone has the patience to allow Performance Max the 6 - 8 week runway the Google brain seems to need to learn what works and what doesn't.
Despite its promises of machine learning-driven automation, you can't just create a client campaign and leave it to its own devices. Far from it, there is still a lot involved in making sure that Performance Max does what it's supposed to do.
What Does Performance Max Mean for Agencies?
Performance Max automates a lot of the time-consuming, manual work of setting up a campaign across different platform options. The only thing that agencies have to do with Performance Max is to provide the inputs, then monitor and adjust the campaign as Smart Bidding does its thing to help you achieve your campaign goals.
Similar to CPA targeting, Performance Max campaigns are designed to automatically adjust the various campaign settings to drive the best performance. But, also similar to CPA targeting, this is not a guaranteed result.
Although one marketer we heard from indicated that they were seeing amazing results with Performance max, the results have been a bit of a mixed bag for many agencies.
Most notable is that Google can only optimize Performance Max campaigns to what it can see. If your campaign goal is to drive leads, the system will optimize to generate the most leads possible within the budget, often coming at the expense of lead quality.
Feedback from marketers across the board indicates that leads from PMax are plentiful and well priced, but tend to be of lower quality. This is an area that Google will need to improve, as low-quality leads put a drain on your client's budget and sales team resources.
After all, cheap leads don't mean much if they are converting at a significantly lower level, sometimes as much as 2/3rds lower than other leads from Google Ads.
Although Performance Max is taking another step forward in improved campaign navigation, it has not yet reached "self-drive" status.
But it is a platform that almost every PPC agency should be including in its campaign arsenal in some way, so it's a good idea to get ahead of the curve and test out some PMax campaigns.
This brings us to the next question…
What Inputs Does Performance Max Use?
The inputs for Performance Max campaigns include:
Campaign goals: This is the most crucial input for Performance Max as these campaign types are goal-based.
Audience signals: Identify who your most valuable audiences are with the highest likelihood of conversion to steer the automation and machine learning algorithms in the right direction. Audience signals are essential, so we’ll return to this later.
High-quality creative: This includes copy, images, and videos. Include your best stuff since there’s only so much automation can do if the creative isn’t up to par.
Conversions: You can identify the most valuable types of conversions for your business
Safety Settings: This was made with brand and account managers in mind as you can specify the types of content where you DON’T want your ads running.
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Key Features of Performance Max Campaigns
The latest announcements regarding Performance Max included a few new features that offer agencies more choices when it comes to conversion goals and new types of insights to help you make better decisions driven by data.
Finding New Customers
A new type of conversion setting is now available in Performance Max– Customer Acquisition. This was a popular feature in Smart Shopping campaigns, and its addition to Performance Max only deepens its capabilities.
This goal allows you to focus on new customers–either by bidding more for them or optimizing your campaigns to target only them–while also making it easier to identify them through Customer Match lists, conversion tags, and autodetection.
While this setting may reduce the amount of traffic and increase the cost per lead, it stops your existing customers from seeing the ads (or reduces, if you selected the lower bid option). It only takes a moment to set up, all you need to do is check a box and confirm your audience list of customers.
Audience Signals (Which Are Super Important!)
Audience signals are a new feature unique to Performance Max campaigns that lets you suggest audiences to Google’s machine learning algorithms to optimize conversions.
While it’s optional, we can’t stress the importance of Audience Signals enough and highly recommend using them in your Performance Max campaigns because it nudges the machine learning algorithms in the right direction, namely, toward the audiences who are most likely to convert.
According to Lindsay, our resident PPC expert and Performance Max tester, “using strong audience lists is key. If the audience lists are weak or too broad, Performance Max will show your ads to a massive, irrelevant audience.”
Better Insights With More Substance
There are also two new Insights coming to Performance Max:
Asset audience insights: Find out how well specific customer segments respond to the copy, images, and video in your Google Ads. For example, if you’re running a Performance Max campaign to sell computers to power users, you might find they respond better to ads with detailed product specs over flashy product images.
Diagnostic insights: Think of this as a troubleshooter that highlights setup issues that prevent your ads from showing (such as your ads being disapproved) while also providing suggestions on how to fix the problems.
By now, you probably see some of the benefits of using Performance Max (such as it is fully automated as well as an all-access pass to the entire Google Network), but if you and your agency are pros at Smart Shopping and Local campaigns, you might be wondering:
Why Are Google Performance Max Campaigns So Important?
The short answer: Because Performance Max is replacing Smart Shopping and Local campaigns, and it’s happening a lot sooner than you think.
You might have noticed that it has already begun, making it more urgent than ever for agencies to get up to speed on what Performance Max is and what it can do.
Because if you haven’t upgraded your Smart Shopping campaigns by the end of Q3 2022 (i.e. September), you’ll be automatically updated to Performance Max (more on that later).
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Benefits of Google Performance Max Campaigns
The main benefits of Performance Max are:
Access to the entire Google Network: This will take your keyword-based search campaigns to the next level as machine learning serves the right ads to the right people at the right time.
Automation: Using Smart Bidding, all aspects of the bidding and ad buying process are automated, and Performance Max will even generate your ads for you based on the creative assets you provided.
Audience signals: Allow you to steer the machine learning algorithms in the right direction to save time and maximize effectiveness.
Better insights: Includes new features like Asset Audience Insights and Diagnostic Insights (which we discussed in the previous section).
Goal-focused campaigns: To help you achieve your marketing goals.
In a nutshell, Google Performance Max campaigns are meant to make your clients’ Google Ads campaigns easier to set up and get those ads in front of more people, all the while optimizing performance in real-time.
For a more day-to-day example, here are all the things that a search marketing agency would have to run to make up for one Performance Max campaign:
Dynamic search campaign
Video campaign (optional)
Smart Shopping campaign
Keep in mind that those campaigns don’t necessarily have the automation capabilities of Performance Max either, so it may be even more labor-intensive to run all those campaigns at once.
What are the Cons of Performance Max?
For one, Performance Max is geared toward novice users as a way to tap into Google Ads with far less knowledge and experience. This goes against the grain of most agencies, which rely on their expertise as a selling point. Ironically, however, novice users tend to fall deeper into the pitfalls of Performance Max precisely because of that lack of experience. These include:
Unclear Goals Lead To Underperforming Campaigns: If you are not crystal clear about the conversion goals you are trying to optimize for, Google will not be able to deliver the results your agency is looking for.
Limited Performance Visibility: At this point in time, it's difficult to extract specific insights for campaigns or asset combinations. For example, you can't extract performance data by platform, which makes it difficult to provide actionable reports. It can also make it harder to get client buy-in when you don't know if the traffic is coming from YouTube, Search or Display! This means your agency can't easily understand which channels are working or optimize your assets to improve those that aren't. Although Google is adding more reporting features, it may be a while before agencies can get their hands on the level of data they are used to.
Relying Too Heavily on Automation: If you are not careful about how you set up and optimize Google Performance Max, you could end up wasting a lot of your client's money on some poorly crafted campaigns.
Loss of Control: The very concept of automation takes some of the control out of the hands of marketing agencies. For those who love to dig through the data to find optimization opportunities, they can only hope that the Google machine is as detailed, and as strategic, as a Google ads expert would be.
In the end, Performance Max has had a polarizing effect on digital marketers across the spectrum. Some, like Jyll Saskin Gales, love the idea of letting Google use its massive artificial brain to find new customers.
Others, including Pamela Lund, don’t completely buy the hype and worry that Performance Max will fall victim to some of the issues that campaign recommendations have always experienced.
While a final group, which seems to include Twitter user YoRayyes, appears to be worried about the Skynet of it all and the potential impact on their agency.
In the end, although Performance Max appears to have some potential, it's not something that agencies should jump into blindly.
What Network Does Performance Max Run On?
One of the biggest selling points of Performance Max is that it allows agencies to run ads across the entire Google Network, so let’s take a deeper look at what that actually means.
With Google Ads, there are three campaign types to choose from:
Search Campaigns: The text ads shown on Google SERPs (search engine results pages), Google Maps and Shopping, and other Google search partners.
Display Campaigns: The image-based ads that appear throughout the Google Display Network, which includes Gmail, Blogger, and millions of Google-partnered websites and apps.
Video Campaigns: The video ads that run on YouTube.
Performance Max also includes Discovery, and as you can see, it’s a game-changer when it comes to increasing your clients’ ad reach throughout the entire Google ecosystem, and so far, it seems to be living up to the hype.
What Options and Controls Do I Have With Performance Max Campaigns?
Performance Max provides agencies with a wide range of options and controls to tailor their campaigns to their clients’ needs. This includes:
Budget: Determine your conversion goals and set your budget accordingly.
Bidding Strategy: Smart Bidding gives you five strategies to choose from:
Target Cost per Action (CPA)
Target Return on Ad Spend (ROAS)
Maximize Conversion Value
Enhanced Cost per Click (ECPC)
Location: Where will your ads run?
Language: What language?
Ad Scheduling: Choose your schedule and campaign run dates.
URL Options: Choose whether you want Google to send traffic to the most relevant URLs on your clients’ websites or if you want traffic sent to only the URLs you provide.
Asset Groups: These are basically ads, and they’re easy to set up– simply provide the creative (i.e. logos, videos, headlines, etc.) and Google does the rest.
Audience Signals: This is where you can help guide the automated targeting.
Ad Extensions: Choose whether to use existing sitelink extensions or create sitelinks specific to your campaign.
Tips From Our PPC Expert
Lindsay, our PPC expert, wanted to point out the importance of using URL Exclusions if you do use the URL options. She highly recommends fully auditing your clients’ websites to exclude irrelevant URLs when using URL Expansion.
She reiterated what we've heard from many other agencies that it's critical to monitor the lead quality and not just the lead quantity.
She also wanted to emphasize how vital Audience Signals are to a successful Performance Max campaign.
Creating a Performance Max Campaign
It’s easy to set up a Performance Max campaign. Let’s go through the steps together.
Step 1: Choose Your Objective
Step 2: Choose Performance Max Campaigns
Step 3: Determine Budget and Bid Strategy
Step 4: Campaign Settings
Step 5: Create an Asset Group
*We highly recommend setting up Audience Signals at this step.
Step 6: Create Ad Extensions
Step 7: Review Your Campaign
What PPC Managers Should Now Spend Their Time On
While Performance Max’s automation and machine learning capabilities make it easier to create Google Ad campaigns, that doesn’t mean you can push a button and walk away.
Somebody (like your agency’s resident pay-per-click expert) still has to steer and monitor these automated campaigns, which means you’ll need an actual human (a PPC specialist will do) to set the course, provide the data, and make tweaks and adjustments as needed.
Speaking of data, that will be fundamental to the success of your Performance Max campaigns because your results will only be as good as the data you give it.
So make sure to add those Audience Signals!
Ask Yourself, “What Can You Automate?”
For PPC managers, we also highly recommend taking a look at the processes and identifying areas that can be automated.
Perhaps you could let Smart Bidding take over that side of things to free up your time for something else?
If you’re still skeptical about Performance Max, you could even run automated campaigns against manual ones, and then compare the results to see what’s better.
Another big question for agencies is, “How much to charge for PPC management and how automation will affect it?”. You would typically charge anywhere from 10% to 20% of the spend as your agency's PPC markup, depending on the size and capabilities of your agency. This cost may decrease in direct relation to the amount of effort required to achieve success, and the percentage of the total spend and revenue relies on Performance Max.
But regardless of that, every agency needs visually appealing PPC reports when presenting to clients or the big bosses. Luckily, it’s easy to create a PPC dashboard with AgencyAnalytics!
What Do Performance Max Reports Include?
Reporting is a critical component for any agency because it’s how you wow your clients with how well your campaigns are doing.
Performance reporting has been an issue in the past, and it’s a work-in-progress that Google is continuously trying to improve upon. Google Performance Max campaign reporting was somewhat limited in 2021 as agencies could only report on:
Top-level campaign performance
Performance by location
Performance by time of day and day of week
In 2022, Google brought Placement Reports to Performance Max, allowing agencies to see where their clients’ ads were placed and how many impressions they got. While it has improved over the previous year, it could still be better by providing the click data. But that should come with time as well.
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How To Avoid the Potential Pitfalls of Performance Max Campaigns
Overall, Performance Max works well at bringing in new leads, increasing return on ad spend (ROAS), and providing a great mobile experience. But it’s not the ‘set it and forget it’ automation dream that Google is touting it as.
In fact, some see Performance Max as more of a mixed bag as the cheaper cost per lead (CPL) often comes at the price of significantly lower lead quality. On top of that, agencies have also seen a decline in the performance of their Search campaigns-including branded search-due to cannibalization, despite Google’s promises that Search campaigns would be prioritized over Performance Max.
Agency Tips and Tricks for Performance Max
Here’s a list of tried-and-true tips and tricks to help agencies get used to Performance Max courtesy of Lindsay, our PPC expert.
You cannot add negative keywords at the platform level, even though this is even more important with a fully automated campaign like Performance Max.
The only way to add negative keywords is to go through your Google Rep. Hopefully, this will change, but there is no ETA. And, to add insult to injury, if you do not have a dedicated Google rep, you have no way to add negative keywords to PMax. Support will not do this. So this is a big red flag for smaller advertisers and agencies.
Performance Max cannibalizes brand bigtime, so if you are running brand campaigns, make extra sure that your brand terms are added as negatives to your Performance Max campaigns.
Check Your Insights
Make sure to look through the "Insights" tab weekly. This will give you an idea of the type of searches your Performance Max campaigns are appearing on. Scour this religiously and send negative keywords to your Google rep to add.
Exclude Irrelevant Urls
Do not let Google use your entire website because it will send traffic to the most random, irrelevant pages.
One way to solve this is setting it to only use one URL, but that can be too restrictive so we recommend taking the time to go through your website and exclude the irrelevant URLs.
Don't just rely on location targeting. It’s best to proactively exclude any country you do not want your ads appearing in.
One of the Most Important Things to Remember Is…
You have no control over devices because there is no way to exclude mobile devices from PMax. This means if your site/product is not optimized for mobile, you will get a ton of non-converting traffic.
Also, we recommend that anyone using Performance Max to drive leads needs to have a CRM set up and their tracking in place. Many accounts show impressive numbers but the lead quality is often poor so it needs to be monitored.
Summary & Key Takeaways
Simply put, Performance Max campaigns are an amalgamation of multiple Google Ads formats into one: Search, Display, Discovery, Video, and Local. And it’s here to stay.
In order to keep track of your client's Google Ads efforts, your agency needs reporting software to keep track of everything in one place.
Keep it simple with a templated Google Ads dashboard, or customize your own, from AgencyAnalytics. Start your free 14-day trial today and set your reporting process on autopilot.
Michael is a Vancouver-based writer with over a decades’ experience in digital marketing. He specializes in distilling complex topics into relatable and engaging content.Read more posts by Michael Okada ›