Paid Search • 17 min read

Performance Max: The Good, The Bad and The Ugly

Malcolm Gibb 24 October, 2022

As a challenger performance marketing agency, we are continually looking to improve the effectiveness of our client advertising campaigns.

In a recent webinar, I was joined by our Senior Paid Search Manager, Laura Hood, to put Performance Max – Google’s new automated campaign format – under the microscope and considered:

What is Performance Max?
Why makes Performance Max different
The good, bad and ugly of Performance Max

Watch the full webinar: Performance Max – The Good, The Bad and The Ugly

What is Performance Max?

Performance Max is a new goal-based Google campaign format with automation at its core. That can serve content across all of the Google ad properties from a single campaign.

It launched at the end of 2021. But advertisers have really started adopting it in the summer of 2022 – when Google started prompting advertisers to migrate mart Shopping campaigns over to Performance Max.

Free download: How to Set Up Performance Max for Success [checklist]

Performance Max is going to replace smart shopping – which was a campaign that served across shopping Gmail, Display and YouTube.

It gives us added reach with the ability to now show video creative on:

YouTube
Discovery Ads
Search

The biggest change here, which is causing the most debate amongst advertisers, is the Search functionality.

It serves in the same way that a Dynamic Search ad does, by matching to content on landing pages rather than using keywords, but there is no capability to use negative keywords.

In addition to the new channels, there’s also some new features available such as:

Audience Signals
Insights Reporting
Asset Groups

So, we’ll also consider how you can use these to your advantage.

What is the impact on existing campaigns?

So, what does this mean for your other campaigns?

There’s still a need to have a single campaign type such as Search and Display.

With a Search campaign, your manual exact keywords will take priority at auction. This will allow you to have more control over the ad that is served, increased visibility for reporting and more control over the budget and bids for those keywords.
With Shopping, if you have products in both a Performance Max and standard Shopping campaign, Performance Max will enter the auction first. So, when you’re launching new Performance Max campaigns – if you keep the same items live on Standard Shopping – you’ll start to see the spend and traffic move towards Performance Max.
As Performance Max doesn’t allow you to target specific audiences, there’s still a need for your usual Display, Discovery and YouTube campaigns. Especially if you want to have control and visibility over what is served and to who – with the likes of retargeting activity.

Setting up conversion tracking

Before diving deeper into Performance Max, it’s important to touch on a conversion tracking feature called Enhance Conversions.

We would recommend setting this up to get the best value from your Performance Max campaigns.

Enhanced Conversions help match up user journeys when users decline cookies on your site. It uses the customer information entered at checkout – such as your email address – anonymises it and then sends it back into Google ads.

This is then matched up with users that are signed into their Google account with the same email when searching. And it reports any lost conversions back into your account.

So, what’s good about Performance Max?

So, let’s have a deeper dive into the good things about Performance Max and some of the new features that are available.

Audience signals

Unlike smart shopping, we’re able to add audience signals to our Performance Max campaigns.

Now this doesn’t mean that it’ll target these audiences, but instead uses that as a starting point to find new conversions.

It’s best practice to provide custom segments which include things such as in-market or affinity audiences. And, also, to upload customer lists.

Customer lists are essential if you want to use the customer acquisition feature which will optimise towards acquiring new users.

For example, using your first party CRM data to import all previous purchasers.

This gives the campaign data rich signals to find new users that are similar to your current customers.

Increased insights

In addition to this, we now also have access to Audience Insights.

This is a new feature and shows us which audiences are driving conversions in your campaign.

We recommend using these insights to fuel your strategy and other campaigns.

For example, taking inspiration for these audiences in terms of your targeting on YouTube or Display.

We can also able to access Search Term insights. This is something that advertisers were previously blind to when running Smart Shopping campaigns.

It’s of more importance now in Performance Max, especially given that we can serve across the Search Network.

Whilst we can’t use negative keywords, or control what we match to, we can use these insights to inform Search campaign coverage. By building top performing Search terms – and to exact match keywords to give us greater control over ad copy and impression share.

Asset groups

Another new feature is Asset Groups.

They contain:

your creative
ad copy
audience signals
and, if you have a shopping feed, your product listing groups

We recommend using this to condense your campaigns but still show the most relevant ads to users.

During the session, we pulled out an example from one of our clients, where we segmented our campaign into full price and sale so that we can deliver the most relevant creative and messaging to the users.

This has helped increase our revenue and ROAS within the account.

Some other examples of how you could use this include:

promotions
new lines
gender
brand
product types

QC Top Tip: Use your shopping feed and custom labels to tailor your Asset Groups.

Increased creative opportunities

Previously, with Smart Shopping, you were only able to use one image and one piece of ad copy at any one time within a campaign.

With Performance Max, we’re now able to:

use up to 20 images at once
have multiple variants of headlines and description lanes
and each asset will be given a performance rating once it reaches the impression threshold (which is around about 5000 impressions in the last 30 days).

However, these insights are limited as we only see ratings of poor, good or best. And we don’t actually see any of the related metrics such as click-through-rate or conversion rate.

Although, we can still use this to optimise our creative by swapping out poor performing assets to continually test within that Asset Group.

Once your campaign has been running for a month or so, depending on the volume that you see, you’ll start to get ad copy insights. These essentially call out which messaging resonates best with the different audiences that are driving conversions in the campaign.

These insights can then be used to inform your ads and how you speak to audiences via your other campaigns such as Discovery Ads.

Or, you can even use it to inform your ad copy across channels and inform testing on the likes of Meta ads.

Performance Max: The Bad

So that’s the good. But what about the flipside?

The transition to Performance Max really hasn’t been a smooth ride. And there’s still concerns amongst advertisers about the lack of control and visibility that we have via Performance Max.

Matching to branded search terms

Performance Max campaigns often match to branded search terms which can cause performance to look better than it actually is.

Advertisers can use the insights tab to gain some level of visibility over whether it is matching to brand and gain an idea of how much revenue is being generated by these terms. These insights are provided and refreshed for last 7 days and last 28 days which means reviewing historical performance of the campaigns is limited.

So, it’s really crucial to monitor this for any recently launched Performance Max campaigns.

You can now request to add campaign level negative keywords via your Google Rep or CSS provider. Remember to check this regularly as you will need to re-apply for any new campaigns that you create.

A Beta has also been released to apply account level negative keywords which would apply to the search element of performance max – you can also ask your rep about this.

If you do want to show on search for branded terms we would recommend you to set up a Search campaign using exact match keywords. This means you can control ad copy better and more accurately monitor performance.

It’s also a good idea to keep an eye on your competition. As more advertisers begin to adopt Performance Max, the more your competitors may begin to creep onto your brand search terms. And this is something that we have seen quite considerably across our client base.

In fact, this has been the case for one of our beauty clients and actually caused cost-per-click to rise from July. And that was during a period where Google pitched advertisers to migrate from Smart Shopping campaigns which were automatically converted into Performance Max campaigns.

Google has mentioned that there will be an update coming to address this as a lot of advertisers are up in arms about this particular function. And that should allow us to add in negative keywords at account level.

However, it’s still not really the best solution in the branded search space as we’re limited by the level control we have over our ability to show against brand terms in Performance Max campaigns – or to exclude them.

So, it’s one to watch when you launch Performance Max campaigns.

Lack of channel insight

Another thing causing concern amongst advertisers is the inability to see a channel split.

So, it’s possible to see how often you are serving and how much we are spending on the likes of Shopping Display. But we can’t segment that information.

However, there are a couple of possible solutions that you can look at to try and mitigate those negative side effects of optimisation:

Create a custom report at Item ID level and filtering for a campaign type of Performance Max or the specific campaign name. That should give you an idea of how often it serves in the performance reporting that we have on Shopping.
A new predefined report which exists and can be found within the other category on Google Ads reporting on the platform. This gives you insight into campaign placements on things like Google Display Network. Whilst that gives some visibility into where your ad is serving on display there really isn’t much you can do if you don’t like what you see.

You still can’t add in things like negative placements, which is a quite common optimisation feature within the Google Display Network.

This means that, as advertisers, we still have a complete lack of control on these automatic placements and automatic inventory like Display and Discovery, which means we can’t control where we show ads.

Performance Max: The Ugly

Finally, we wanted to touch on a couple of settings that you should be aware of when you’re setting up your Performance Max campaigns.

Location Settings

The first thing to look at is your location settings.

When migrating from Smart Shopping, or creating a new campaign, the location settings default to people in or regularly in your location.

This means that people outside of the targeted locations can be served your ads.

So, to avoid wasted budget and ad spend, make sure you check this setting to see that you’re not showing it in the wrong locations.

Automated videos

Secondly, if you’re limited in terms of creative – and do not include a video in your Asset Group – Google will automatically create one using the images and ad copy that you’ve provided. Coupled with some questionable music choices.

They don’t look particularly great. And they could also raise some issues in terms of branding, or even compliance if you sit within a special category.

So, make sure you go into your asset insights as you can view the videos that are being served by clicking on the preview windows.