When to Use Demand Gen in Google Ads: A Comprehensive Guide

Should your business use Demand Gen?

Google Ads is heavily pushing Demand Gen, its latest campaign type, and it's quickly becoming a hot topic among digital marketers. But before diving in, it’s important to ask: Is Demand Gen right for your business?

In this post, I’ll explain when and why to use Demand Gen, share a real-life case study of where it failed, and help you understand how to incorporate it strategically into your Google Ads campaigns.

What is Demand Gen in Google Ads?

Demand Gen is Google Ads’ newest campaign type designed to target users through engaging video and display ads. It’s part of a broader shift by Google, which will soon replace Video Action Campaigns with Demand Gen.

Here are the key dates you need to know:

• March 2025: You will no longer be able to create new Video Action Campaigns.
• Q2 2025: All existing Video Action Campaigns will be automatically transitioned to Demand Gen campaigns.

This shift is similar to the transition from Smart Shopping to Performance Max campaigns in 2022.

Is Demand Gen Worth the Hype?

Google Ads reps are aggressively promoting Demand Gen as the next big thing for businesses looking to scale their advertising. However, just because Google is pushing it doesn’t mean it’s the best fit for every business.

In fact, I have a very strong opinion on this: For most businesses, Demand Gen should not be your primary focus. However, there are specific situations where it can play a strategic role in your overall Google Ads structure.

The Downside of Demand Gen: A Real-Life Case Study

Let’s start by discussing the downside.

I recently audited an e-commerce brand that was advised by their Google Ads rep to run Demand Gen campaigns. Over six months, they spent $60,000 (about $10,000 per month) on these campaigns. The results? Nothing impressive.

There was no measurable increase in conversions from the Demand Gen campaigns, nor did the other campaigns (Search and Performance Max) show any uplift.

The Google rep explained that the impact of Demand Gen may not show directly in those campaigns but as an overall improvement across the account. He also suggested waiting a few months for the results to manifest.

However, after reviewing the data, my recommendation was to pause all Demand Gen spending and redirect that budget to Search campaigns. Here’s what happened:

• The brand’s total ad spend was $500,000 per month, with $10,000 dedicated to Demand Gen (2% of total spend).
• After reallocating that $10,000 to Search, the company saw a 15% increase in revenue over the next two months.

In this case, Demand Gen was a waste of money and was limiting the brand’s growth. The reason? Their Search impression share was under 15%, meaning there was a significant opportunity to scale their Search campaigns profitably before experimenting with Demand Gen.

When Should You Use Demand Gen?

While Demand Gen may not work for everyone, there are specific scenarios where it can be beneficial. Based on my experience, here are two situations where I recommend using Demand Gen:

Scenario 1:

• Your Search and Shopping campaigns have a search impression share or click share of above 60%.
• You’re struggling to scale your ad spend while maintaining healthy profit margins.
• You have profitable Performance Max campaigns focused on new customer acquisition with Brand Exclusions in place.
• You’re running active social media campaigns with high-performing video and image assets.

Scenario 2:

• You offer a product or service that doesn’t have a well-established search theme, or you’re in a market with high CPCs.
• You have video assets that educate your audience or explain your product or service.

For example, with my other brand, which focuses on teaching people how to monetize their knowledge through courses and paid communities, Demand Gen has been an effective tool to introduce the brand to new markets.

How to Succeed with Demand Gen

If you decide to test Demand Gen, you’ll need to ensure your campaigns are set up correctly. A poorly executed Demand Gen campaign can waste money fast.

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Final Thoughts: Is Demand Gen Right for Your Business?

Before you jump into Demand Gen, carefully evaluate your current campaigns. If your Search impression share is low, focus on scaling your Search campaigns first. However, if you’re in a position where you’ve maxed out your Search and Shopping campaigns or are targeting a niche market with high CPCs, Demand Gen could help you reach a broader audience.

Key takeaways:

• Demand Gen shouldn’t be a primary focus unless it fits your business model and campaign goals.
• Evaluate your Search impression share before dedicating budget to Demand Gen.
• When set up strategically, Demand Gen can help you expand beyond traditional search and performance campaigns.