Google Demand Gen Ads: What They Are, How They Work & Why They Matter

What Are Google Demand Gen Ads?

Imagine combining the reach of YouTube, the visual appeal of Discovery Ads, and the intelligence of Google AI into one powerful format. That’s exactly what Google Demand Gen Ads deliver.

Launched as a replacement for Discovery campaigns in 2024, Demand Gen Ads are built to influence purchase decisions before users even begin searching. These AI-powered campaigns help advertisers place scroll-stopping visuals across platforms like:

• YouTube (Home feed, Shorts, In-Stream)
• Gmail Promotions tab
• Google Discover feed

They’re designed for the “demand generation” stage—when customers are exploring or considering, but not yet searching. Whether you’re running an eCommerce sale, lead gen campaign, or launching a new product, Demand Gen is meant to create engagement that fuels intent.

Google Ads explains Demand Gen campaigns in this official walkthrough video, covering campaign setup, creative formats, and targeting strategy.

Evolution: From Discovery to Demand Gen

While Discovery Ads provided visual reach across Google’s content ecosystem, they lacked flexibility, targeting granularity, and creative intelligence. Google saw an opportunity to bring in:

• AI-powered creative mixing
• Better conversion-focused targeting
• New formats like carousels and short-form videos

So in January 2024, Discovery campaigns were officially upgraded to Demand Gen campaigns. Google Ads now recommends Demand Gen for advertisers focused on:

• Video-first campaigns
• Mid-funnel brand engagement
• Expanding reach beyond keyword-based ads

Learn more about how Demand Gen Ads compare to their predecessor in our blog on AI in PPC.

Where Do Demand Gen Ads Appear?

Your ads show up across:

• YouTube Home Feed
• YouTube Shorts
• In-Stream Video
• Google Discover Feed
• Gmail Promotions & Social Tabs

These placements are visually dominant, high-intent zones where users actively explore. Unlike Search Ads that rely on keyword queries, Demand Gen campaigns use signals like YouTube watch history, site visits, and audience interests to show relevant ads at the perfect time.

According to Google, advertisers using Demand Gen have seen up to 3x more conversions at a lower CPA than traditional awareness formats.

Google Demand Gen vs. Discovery Ads (and Performance Max)

As digital advertising evolves, choosing the right campaign type can make or break your ROI. Let’s break down how Google Demand Gen Ads compare to both Discovery Ads (their predecessor) and Performance Max campaigns (a broader automation solution).

Demand Gen vs Discovery Ads

Feature	Discovery Ads	Demand Gen Ads
Ad Formats	Single image or video	Images, videos, carousel ads
Placement	YouTube, Gmail, Discover	Same, but with expanded video reach
Creative AI	Basic	AI-driven asset mixing and auto optimization
Conversion Goals	Mid-funnel awareness	Mid to bottom-funnel conversions
Audience Targeting	Custom & affinity	Lookalikes, interest-based, and AI-modeled audiences

Search Engine Journal breaks down how Demand Gen builds on Discovery Ads by incorporating video, carousels, and smarter audience modeling.

Key Advantage: Demand Gen brings rich creatives, better audience expansion, and more personalized experiences using AI models. It doesn’t just show ads—it understands intent.

Want to learn how Google’s AI is transforming PPC? Check our detailed breakdown: AI in PPC

Demand Gen vs Performance Max

Performance Max campaigns use a conversion-based, automation-first strategy across Search, Display, Shopping, Gmail, YouTube, and Maps. Demand Gen, on the other hand, focuses only on visually rich placements for discovery-stage engagement.

Comparison	Demand Gen	Performance Max
Focus	Visual-first, mid-funnel	Conversion-first, full funnel
Placements	YouTube, Gmail, Discover	All Google surfaces (Search, Shopping, etc.)
Creative Control	More manual	Fully automated
Best For	Generating demand	Capturing conversions

Pro Tip: Many advertisers use Demand Gen to build awareness and retarget, then use Performance Max to close the loop with strong intent-based campaigns.

Need help deciding between the two? Explore our PPC services or Contact Us for a custom audit.

Demand Gen Campaign Setup Guide – Step-by-Step

Launching your first Demand Gen campaign? Google makes it fairly intuitive, but to truly unlock performance, you need to configure targeting, bidding, and creatives with intent and AI support in mind.

Step 1 – Start from Google Ads Dashboard

Head to your Google Ads account, click “+ New Campaign,” and choose:

• Objective: Leads, Website traffic, or Sales
• Campaign Type: Demand Gen

You’ll also choose your conversion goal (form fills, purchases, etc.)—critical for later optimization.

Step 2 – Targeting Your Audience

Demand Gen offers advanced audience options:

• Custom segments (e.g., people searching for “CRM tools”)
• Website visitors (remarketing)
• YouTube viewers
• Lookalike segments (people similar to converters)

Google’s AI automatically refines your audience reach based on engagement signals, interests, and behavior.

Example: You can retarget users who viewed your YouTube product videos but didn’t convert.

Step 3 – Choose Your Bidding Strategy

Demand Gen supports these bidding types:

• Maximize conversions (good for high-volume)
• Target CPA (ideal for ROI-focused brands)
• Maximize clicks (awareness-focused)

Most advertisers see better results using Target CPA, especially when optimizing toward form submissions, app installs, or product checkouts.

Step 4 – Upload High-Impact Creative Assets

This is where Demand Gen shines.

Upload:

• Multiple headlines (30–90 characters)
• Descriptions
• Videos (Shorts + landscape)
• Images (1:1, 4:5, 1.91:1)
• Carousel (if applicable)

Google’s AI will auto-test combinations to identify the top-performing creatives for each audience.

Tip: Use your brand color, testimonial overlays, and value-based CTAs like “See Plans” or “Start Free Audit.”

Need professional creatives for your campaign? Hire a Google Ads Specialist to handle setup + A/B testing.

Real-World Demand Gen Ads Examples (and What They Got Right)

Demand Gen Ads are already being used by some of the biggest brands—and even small businesses—to drive awareness, engagement, and conversions through powerful visuals and AI-powered distribution.

Let’s break down a few campaign types and why they worked.

Example 1 – E-Commerce Brand Launching a New Collection

Scenario: A fashion brand wanted to promote its summer collection across YouTube Shorts and Discover Feed.

Ad Strategy:

• Carousel of styled outfits
• Video testimonials from influencers
• Targeted users based on fashion interests and recent shopping activity

Results:

• 2.3x increase in landing page visits
• 35% lower CPA compared to Display campaigns

Why it worked: AI-optimized placements + engaging visuals in scroll-heavy environments.

Example 2 – SaaS Company Promoting a Free Trial

Scenario: A SaaS brand offering CRM software ran Demand Gen Ads to promote a free 14-day trial.

Ad Strategy:

• Short-form YouTube video showing UI walkthrough
• Clear CTA: “Try CRM Free”
• Retargeted past website visitors + lookalikes

Results:

• 4.7% CTR on YouTube Shorts
• 26% increase in trial signups over Discovery campaigns

Pro Tip: For B2B SaaS, Demand Gen Ads offer both reach and retargeting strength—ideal for the mid-funnel push.

Example 3 – Lead Gen for Local Clinic

Scenario: A cosmetic clinic in India ran a regional campaign using Demand Gen to promote skin care packages.

Ad Strategy:

• Mobile-first creatives (portrait images + video)
• Carousel ads with service info
• Custom audience targeting: “Skin care,” “Dermatologist near me,” “Beauty clinics”

Results:

• 52% increase in WhatsApp leads
• 3.2x return on ad spend (ROAS)

Interested in replicating these results? Work with a PPC agency in India to set up ROI-driven campaigns.

How Google AI Powers Demand Gen Campaigns (and Why It Matters)

The real strength of Demand Gen Ads isn’t just in where they appear, but how intelligently they work. Powered by Google’s AI, these campaigns automatically adjust who sees your ads, what creative version gets served, and how to maximize your ROI based on real-time intent signals.

Smart Audience Targeting

Google AI doesn’t rely on static audience segments. It continuously learns from:

• User behavior across YouTube, Discover, and Gmail
• Site visits and app interactions
• Lookalike profiles of high-converting users

This means your ad doesn’t just reach the right person—it reaches them at the right moment in their journey.

Example: If a user watched two product review videos on YouTube and browsed your site, Demand Gen can prioritize your carousel or video ad in their Discover feed within hours.

Asset Testing and Optimization

Demand Gen auto-tests combinations of:

• Headlines
• Descriptions
• Videos
• Images
• CTAs

…and learns what performs best by placement and audience type.

Instead of A/B testing one creative per campaign, Google Ads can test hundreds of combinations at once and prioritize the winners.

Result: Higher click-through rates, lower CPA, and less creative fatigue.

Predictive Conversion Modeling

Even if a user doesn’t convert immediately, Google’s AI models conversion likelihood using signals like:

• Dwell time
• Scroll depth
• Content interaction
• Past purchases

That’s why even mid-funnel ads on YouTube can lead to down-funnel sales or form fills, especially when integrated with Performance Max or retargeting workflows.

Want a custom-built Demand Gen strategy? Explore our Google Demand Gen campaign services tailored to your industry and goals.

FAQs About Google Demand Gen Ads