Summary
- Demand Gen campaigns show your ads on YouTube, YouTube Shorts, Gmail, Discover, and the Display Network. They target people who are not yet actively searching for your product — they build demand rather than just harvesting it.
- 68% of Demand Gen conversions come from new users who have not seen your Search ad in the past 30 days. This is genuinely new demand.
- CPC is 90% lower and CPM 74% lower than on Meta/Facebook Ads (according to OMD analysis). For online stores with visually appealing products, it is an alternative to social media.
- Google's 4 pillars: audiences, bid & budget, creative, measurement. When at least 3 of the 4 are met, campaigns show 40%+ more conversions.
- Demand Gen is not a replacement for Search or PMax — it is a complement. Switch it on once your Search and Shopping are profitable, and plan for a budget of at least €60 per day.
This is exactly what Google built Demand Gen campaigns for. And the numbers are interesting: 68% of Demand Gen conversions come from users who have not seen any of your Search ads in the past 30 days. This is not remarketing. This is genuinely new demand — people you would never reach through Search.
And yet almost no one in Czechia is talking about Demand Gen. Most agencies either do not know it or have written it off as "something for branding." The data says otherwise — set up correctly, Demand Gen delivers 90% lower CPC and 74% lower CPM than paid social media. And LG Electronics achieved 91% lower CPA with it compared to Meta Ads.
In this article we will show you what Demand Gen actually is, why Google is quietly moving it to the center of its advertising strategy, and how to use it for your online store.
What Demand Gen campaigns are (and where they came from)
Demand Gen was created by merging two older formats — Discovery Ads (retired in March 2024) and Video Action Campaigns (retired in July 2025). If you used either of them, Demand Gen is their successor with far broader capabilities.
Where your ads appear
- YouTube — main feed, Watch Next, in-stream ads
- YouTube Shorts — vertical short-form video (up to 60 seconds)
- Gmail — the Social and Promotions tabs
- Google Discover — the personalized feed on mobile
- Display Network — an expansion from 2025
- Google Maps — promoted pins (new in 2026)
Total reach? Over 3 billion monthly users. That is 90% of the global internet population.
The key difference from Search and Shopping campaigns: Demand Gen does not target people who are searching for something. It targets people who match your customer profile — and shows them your ad while they are browsing YouTube, reading Gmail, or scrolling Discover. It is push marketing, not pull. You build demand rather than harvest it.
Why Demand Gen should matter to you (the numbers speak)
Here we stop with the theory and look at the data.
Demand Gen vs. Meta Ads — a surprising comparison
Most online retailers who want to reach new customers automatically reach for Facebook and Instagram. Demand Gen is a direct competitor — and, according to the data, it holds up surprisingly well:
| Metric | Demand Gen | Meta Ads |
|---|---|---|
| CPC | 90% lower | higher |
| CPM | 74% lower | higher |
| Reach | 3+ bn users (YouTube, Gmail, Discover) | 3+ bn users (FB, IG, WhatsApp) |
| Conversion rate | 1.83% | comparable |
| Long-term ROAS (YouTube) | 2.3x higher vs. social | baseline |
Source: OMD analysis 2024, Google internal data.
LG Electronics put it to the test: Demand Gen achieved a 24% higher conversion rate and 91% lower CPA than paid social media. One apparel company reported a 22x drop in CPA and a 6.5x increase in conversions.
That does not mean you should ditch Meta Ads. The best results come from companies that use both — Meta warms up the audience and builds brand recognition, while Google (Demand Gen + Search) converts the interest. But if you run Meta alone and Google Search/Shopping is not enough to reach new customers, Demand Gen is the natural next step.
More key numbers
- +26% increase in conversions per dollar year over year, thanks to 60+ AI improvements (Google Marketing Live 2025)
- +20% more conversions when using multi-format creatives (video + images together)
- +7% more conversions for campaigns that include Connected TV (Shoppable CTV)
What's new in Demand Gen in 2025–2026
Google is investing aggressively in Demand Gen. Over the past 12 months more than 60 improvements have landed. Here are the most important ones:
Channel controls — you finally choose where
Since mid-2025 you can manually select or exclude specific channels — YouTube, Discover, Gmail, the Display Network, Shorts. Previously you had to let Google decide where to send the money. Now you are in control.
Creator Partnerships — collaborate with YouTubers straight from Google Ads
New as of February 2026. Right inside the Google Ads interface you can find YouTube creators and arrange collaborations. Your ads then appear alongside their content. It is something like influencer marketing, but managed through Google Ads with all the data and metrics you are used to.
Shoppable Connected TV
Since January 2026. Viewers on smart TVs can shop directly from your YouTube ad — they scan a QR code and complete the purchase on their phone. For online stores with strong video content, it is an interesting opportunity.
YouTube Pause Ads
A new format that shows your ad when the viewer pauses a video. It is not a pre-roll that annoys people — it is a 10-second display during the pause. Less invasive, yet effective for building brand awareness.
Lookalike segments → Suggestion Mode
From March 15, 2026, lookalike segments are moving to "suggestion mode." Instead of fixed thresholds (2.5%, 5%, 10% similarity), Google AI decides the breadth of the audience itself. For now you can opt out via a form, but the direction is clear — Google wants more control over targeting.
The 4 pillars of a successful Demand Gen campaign
Google has defined four pillars; when they are met (at least 3 of 4), campaigns show 40%+ more conversions:
Pillar 1: Audiences
Demand Gen offers one thing PMax does not — lookalike audiences. You can take your customer list and let Google find similar people. On top of that, add:
- Customer Match lists (your first-party data)
- Custom segments based on interests and URLs
- In-market audiences (people actively shopping in the category)
- At least 3 audience segments per campaign
And switch on Optimized targeting as a safety net — Google will expand reach if it finds converting users outside your segments.
Pillar 2: Bid & Budget
The main recommended strategy for online stores since 2025 is Target ROAS (previously Target CPA). Minimum requirements:
- 50+ conversions in the past 30 days for tROAS to work
- Budget = ideally 5x Target CPA per day (in practice around €60–120/day)
- Formal minimum from April 2026: $5/day (but do not expect results at that level)
- The learning phase takes 2–4 weeks — do not change your settings
Pillar 3: Creative
This is where Demand Gen fundamentally differs from Search. You need visual assets — and the better they are, the better the results.
- Video + product feed = the strongest format for online stores. The video plays while products with real prices appear alongside it.
- Vertical 9:16 video for YouTube Shorts — without it you are losing a huge channel.
- At least 3 video assets and 5 images in each ad group.
- Test different creative concepts, not just variants of one.
- Creative rotation: swap out 30–40% of your assets every 3 weeks to avoid audience "fatigue."
Pillar 4: Measurement
This is the catch that trips up a lot of advertisers. You cannot measure Demand Gen the same way as Search. It is a top-of-funnel campaign — people will not see the ad and buy immediately. They buy in a week, in a month, through another channel.
What to set up:
- Enhanced Conversions (mandatory)
- Data-driven attribution (not last-click!)
- A view-through conversion window that matches your buying cycle
- Track the new "Attributed Branded Searches" metric — it shows how many branded searches your Demand Gen campaign generates
And above all: do not compare Demand Gen ROAS with Search campaign ROAS. That is like comparing a billboard with a checkout display. Both work, but at a different point in the customer journey.
When to switch Demand Gen on (and when not to)
Switch it on if:
- Your Search and Shopping campaigns are profitable and scaled. Demand Gen is an extension, not a foundation. Solve the bottom of the funnel first.
- Your products are visually appealing. Fashion, cosmetics, interiors, food, sport — anything that looks good in video and photos.
- You have a budget of at least €60 per day for the Demand Gen campaign. Below that, the algorithm has no room to learn.
- You have video content. Without video you miss out on YouTube and Shorts — the two strongest Demand Gen channels.
- You want to reach new customers. If your Search/Shopping only reaches people who already know you, Demand Gen adds a new audience.
Do not switch it on if:
- Search and Shopping are not yet optimized and profitable.
- The Demand Gen budget would be under €40 per day.
- You have no video content and do not want to create any.
- You expect direct ROAS comparable to Search campaigns.
- Your products have no visual appeal (industrial components, screws, B2B software).
Demand Gen within the Power Pack strategy
At Marketing Live 2025, Google introduced the Power Pack — a trio of campaigns covering the entire purchase funnel:
| Campaign | Position | What it does |
|---|---|---|
| Demand Gen | Top of funnel | Builds awareness, reaches new people |
| AI Max for Search | Middle of funnel | Captures emerging interest in search |
| Performance Max | Bottom of funnel | Converts a warmed-up audience |
For online stores we recommend the following budget split:
- PMax: 50–60%
- AI Max / Search: 30–40%
- Demand Gen: 10–20% (scaling up gradually based on results)
Important: each campaign needs different KPIs. Do not apply a single ROAS target to all three. Measure Demand Gen by branded search lift and new customer acquisition. Measure AI Max and PMax by conversions and ROAS.
At LK Media we test the Power Pack with clients that have a budget of over €6,000 per month. For smaller budgets it pays to focus your resources on Search + PMax and add Demand Gen only once the foundation is profitable.
Conclusion
Demand Gen campaigns are not for everyone and they are not a replacement for what already works. But they are a powerful tool for online stores that want to grow beyond Search and Shopping — to reach new customers where they spend their time: on YouTube, in Gmail, in Discover.
If you have profitable Search and Shopping campaigns, visually appealing products, and a budget for testing, Demand Gen is worth a try. With a CPC 90% lower than Meta Ads and 68% of conversions from entirely new users, it is an opportunity worth exploring.
Want help setting up Demand Gen campaigns? Write to us at info@lkmedia.cz — we will design the structure, creative formats, and budget tailored precisely to your online store.
FAQ
What are Demand Gen campaigns in Google Ads?
Demand Gen campaigns are a Google Ads campaign type designed to reach new customers through visual formats on YouTube, YouTube Shorts, Gmail, Discover, and the Display Network. They were created by merging Discovery Ads and Video Action Campaigns. Unlike Search campaigns, they do not target people who are actively searching — they build demand among people who match your customer profile.
What is the difference between Demand Gen and Performance Max?
Performance Max covers all Google channels, including Search and Shopping, and optimizes for conversions (bottom of funnel). Demand Gen focuses on visual channels (YouTube, Gmail, Discover) and builds awareness among a new audience (top of funnel). Demand Gen also offers lookalike audiences, which PMax lacks. They complement each other ideally — PMax converts, Demand Gen brings in new people.
How much do Demand Gen campaigns cost?
CPC typically ranges from $0.50 to $2, which is significantly lower than for Search campaigns. From April 2026 the formal minimum daily budget will be $5, but for real results we recommend at least €60 per day. The ideal budget is 5x your target CPA.
Do I need video content for Demand Gen?
Technically no — you can run a campaign with images only. But you lose out on YouTube and YouTube Shorts, the two strongest Demand Gen channels. Campaigns with a mix of video and images deliver 20% more conversions. We recommend having at least one vertical video (9:16) for Shorts and one standard video (16:9).
Is Demand Gen worth it instead of Facebook/Meta Ads?
You do not have to choose one or the other — the best results come from companies that use both. Demand Gen has significantly lower CPC (by 90%) and CPM (by 74%) than Meta Ads, plus access to a YouTube audience that Meta does not have. Meta, on the other hand, offers stronger interest targeting and a more mature ad platform. For online stores we recommend testing Demand Gen as a complement to Meta, not as a replacement.
