Is Performance Max right for your brand?
Resources: https://blog.google/products/ads-commerce/performance-max/
The end of shopping campaigns is near. But don’t panic. Google has announced as they will be retiring Google shopping, a new campaign that came out of beta is supposed to take over. It’s known as Performance Max.
Google introduced Performance Max campaigns in 2020. It allows brands to reach customers across multiple platforms. Your Google ads could show on YouTube, Display, Search, Discover, Gmail, and Maps all from one campaign – Performance Max.
What We’ve Found
Performance Max is a black box. We can’t tell exactly where ads are served or how much we are spending on each of the different platforms.
We started by launching Performance Max for two of our clients and the results couldn’t have been further apart.
For client A, an eCommerce client in the automotive space in Canada, we saw really high ROAS (65X) with minimal ad spend ($1.8K). Typically, this client’s ROAS is between 9X-14X, so to see 65X ROAS was amazing.
But look what happened to the shopping campaign when we launched Performance Max…
As Performance Max picked up, shopping ad spend and revenue dipped for a couple of days, then ad spend picked up but revenue did not recover as before. In fact, comparing WoW:
We see Shopping ad spend decreased by 45%.
Revenue decreased by 63%.
ROAS decreased by 33%.
During that same time, Performance Max spend was only $1.8K, compared to the lower ad spend in shopping of $6K.
Revenue was more than what we lost in shopping.
And thus the ROAS is much higher.
For client B, a lead gen client in the finance space in Canada, we saw zero conversions.
To be fair, we were worried about this account and shut it off too early. It only ran for 2 days. The typical CPL for this client is around $70 – $80. When it spent 10X CPA, we felt that it would not work. But we definitely didn’t give it enough time to learn anything.
However, since we saw such positive results on our larger ad spend clients, we decided to launch it across almost all of our e-commerce clients. Below, I’ll include what some of our small to medium size clients (in terms of ad spend) have seen with different ROAS goals:
Client C: Kitchen & Dining
- Timeframe: Feb 25 – March 7
- Average Account ROAS: 3.8X
- Performance Max Results:
Client D: Camera & Photo
- Timeframe: Feb 25 – March 7
- Average Account ROAS: 1.8X
- Performance Max Results:
Client E: Baby
- Timeframe: March 2 – 7
- Average Account ROAS: 1X
- Performance Max Results:
In a lot of cases, the ROAS is higher than the average account ROAS for the same time period.
But in some cases, we did see lower than expected. These are only the initial results, though. Many clients only have 1 or 2 weeks of data.
We plan on analyzing the data after 1 month. With Performance Max, we won’t be able to analyze campaign-level performance since Performance Max will probably overlap with all other campaign types. We plan on reviewing overall paid search (Google Ads) performance instead.
How Do We Feel About Performance Max Campaigns?
Whether we like it or not, shopping campaigns are going to retire and Performance Max will take over, so we advise that brands need to be prepared and test out the Performance Max campaigns now rather than later.
As a marketing agency, we feel that control is being taken away from advertisers, and brands don’t have the visibility into which ads are best, which platforms, etc. This truly means that brands have limited understanding of their target audience and their behavior.
But, you have to be able to adapt in the ever-fast evolving world of marketing to survive. What better way to do that than launching a campaign that outperforms the existing shopping campaign which takes efficiency to a whole new level.
Get Started with Performance Max Campaigns
Getting started with Performance Max campaigns is easy. Watch this video from Google.
The best practice is to provide enough assets and configure bids and budgets well at launch. Don’t set a high target ROAS because it doesn’t have the freedom to test. Allow it to spend and give it a couple of weeks for the campaign to optimize automatically.
Good luck!
If you have any questions or want us to do an audit on your paid search account, reach out to us and schedule a call today!
