How Performance Max Campaigns Work

Key Takeaways

stop right there because before you start another performance Max campaign you need to ask yourself this very important question of do you know how performance Max campaigns actually work now my role of where I get to view hundreds of different Google ads accounts every single year I see that there are some very very clear Trends between what makes Google ads accounts successful and what makes Google ads accounts not successful and by successful and not successful obviously I'm talking about the Google ads campaigns that every week and every month are growing that business's bottomline revenue and profits versus the other Google ads campaigns which are sadly just a money pit wasting money in Google ads every week and one thing especially over the last 18 months that I found very very interesting between these two is that the accounts which are losing money generally are using performance Max the wrong way so I'm not saying that performance Max is the only type of Campaign which is profitable because even in 2024 the traditional campaigns like Google search and Google shopping are really key parts of a successful Google ads account but a very very common theme that I see with poor performing Google ads accounts is that the user is not using performance Max in the right way so what I wanted to do in this video is really detail how performance Max works so that you can use it in a successful and profitable way in your own Google ads accounts moving forward in 2024 but for this to happen you firstly need to understand some core things about performance Max so that you can use it the correct way for your own Google ads campaigns and specifically what I'm going to be taking you through is the data that performance Max needs in order to perform at its best we're then going to break out the way that performance Max targets potential traffic and then finally we're going to go through the reasons for why your performance Max structure so the way that you structured your asset groups is really really important and what I'm sharing with you has come from me pulling together all the different data points that I've seen from millions of dollars in ad spend from performance Max campaigns so by the end of this video you'll know exactly when you should start using performance Max in your own Google ads account and how to successfully structure performance Max campaigns and so that we can get into the teaching with no interruptions at all what I do want to let you know that if you follow that link in the description below what you're going to see is my performance Max campaign setup guide and this is a booklet that I put together which takes you through the step-by-step process in how to correctly set up and structure a performance Max campaign for your business and if you want to get access to that free guide all you need to do is to follow that link in the description below now let's start with the teaching and where we're going to start as our starting point I'm going to take you to the data that needs to be in your Google ads account before you start a performance Max campaign now the one thing that you do need to understand when it comes to the actual targeting of user Search terms performance Max operates very very differently to Google's more traditional campaigns like Google search and Google shopping now Google search and Google shopping they're probably built on keyword targeting now it does use other things like audience targeting demographic targeting device targeting location targeting these campaigns do use those other data inputs but they're only fully engaged when you use a conversion-based bidding strategy like maximize conversions or maximize conversion value however for performance Max that is the starting point of the campaign so with Google search and Google shopping you can start at maximize clicks or you can add in some Max CPC targets and then you can manually go through and adjust your audience and your demographic and your location and device bidding all of those other data bidding points before you engage a conversion-based bidding strategy but as I said with performance Max you don't have that option the starting point is a conversion-based bidding strategy now conversion-based bidding strategies are a really powerful tool that you can use in Google ads however they can also waste a lot of money if Google first doesn't have enough conversion data now I'm hoping that that makes sense and the reason for that is because when you engage a conversion-based bidding strategy what Google is doing is Google is looking at the account level so not campaign level looking at the account level conversion data and it's using that as a basis of not only looking at the keywords and the Search terms that Target for your products and services but also looking at the audience demographics so what audiences are they a part of what is their recent web history being what are their demographics so what's their age what's their income levels now if you don't have enough of that conversion data already in your account performance Max then needs to run a whole heap of different test tests in order to find the best audiences the best demographics and all of those other inputs to find out what converts now if you are a large multinational company with a million dollar budget that's not really your concern because you can just throw enough money into performance Max and Google will work out the problem however for most businesses who are using Google ads and they're a small and medium-size business you don't have that level of budget to just throw to Google and say work out this problem for me because any of your precious marketing budgets need to get a profit on that return turn very very quickly so for performance Max my very strong recommendations are that I would not engage a performance Max campaign in a Google ads account until I've got these three things in place firstly it needs to be in an account that is getting at least and this is a bare minimum more is better you need to be getting at least 30 conversions over a 30-day average so that your average is working out that every month you getting at least one conversion a day the second thing is that I like to see that there is at least one campaign that is successfully running on a conversion-based bidding strategy so whether that would be a search or shopping Campaign which is already successfully moved from maximized clicks or Max CPC to a maximized conversion or a maximized conversion value bidding strategy and then the third thing and this is a really important thing is that the performance Max campaign needs to be able to operate at a budget that is getting at least one conversion a day so the way that you work that out if is that if your current acquisition cost cost so each cost per conversion is $20 you would need to be spending $20 a day or $600 a month if that average acquisition cost is $10 then you can start with a budget of $10 a day which is then spending $300 a month so the biggest mistake that I see with performance Max and a big reason for why people aren't seeing the results that they should be seeing with performance Max is because they start a performance Max campaign before they have those very important three factors in place now when You' got those three factors in place performance Max can be a really powerful Campaign which can very quickly grow the total performance of your Google ads account because what performance Max is designed to do is it takes that data and then it looks for similar audiences and users who don't know their products yet but Google will start targeting them because it has some very very strong data to know that these are the type of people that convert for your products and your services and that's the best way that you want to be engaging performance Max where you've already got some successful search and shopping campaigns and then you add performance Max over the top so what you're looking at doing is then performance Max because is really built on a high Discovery campaign element performance Max is really targeting users more at the top of your funnel and really growing your business into new areas rather than just focusing on user intent keyword searches and the really really successful Google ads account have those two things working perfectly together they're owning and they're converting for really relevant Search keywords but then they're also growing their account into new areas new audiences and new demographics and the reason reason for why this works so well is because that brings us to the second point of how performance Max works is that performance Max targets traffic differently as we said previously search and shopping the Baseline of targeting is very much based around users Search terms and that's coming from the Search terms that you've targeted in your search campaign or your product totals and your product page descriptions in a shopping campaign but with performance Max it's different because it's also looking at different audiences and demographics that it can Target and so that I can explain this in the best way let's jump into a screen share so you can really clearly understand how this works so that you can then use performance Max and its best way in your own accounts all right so where I want to show you where you want to go is you want to go into the insights and reports section and then when you're in insights reports you want to go into the insights page and then just obviously make sure that you're looking at a performance Max campaign and then when we come down to here I want you to go past the Search terms and go into this audience Insight section and what I want you to see through here is when you've got enough conversion data you'll start to see that there's these Impressions clicks and conversions and what this is giving you is this is giving you the different audiences that performance Max is targeting based on Impressions obviously clicks and then conversions and you'll see blue and green tags now what the blue tags are these are the tags that we've actually added to the asset groups whereas the green ones are ones that are not added but Google is optimizing to show more ads to these audiences and the reason for that is if if you scroll over to here it gives you this index reason and what it's looking at is it's saying people in the market for electrician services are 4.2 times more common to convert rather than the general population and what this is really looking at is it break gets down some further data and saying for this individual audience which is all about electrician Services 23% of our conversions come from that audience but only 5.4% of the traffic from the general population is coming from this audience so what it's saying is there is that it's only 5.4% of the traffic but 24% of conversions have this audience in their web profile and what I want you to also look at is if you just go from here and just look at the Impressions you can see for example this paint audience it gets a high level of Impressions but when we go over to the clicks it's still there and a high level but when it comes over conversions it's no longer there and what you find over time if you come back and continually to review these different stats is that you'll start to see the performance Max will increase the spending on these audiences which are getting more conversions and I've seen quite a lot of times where some people will go into these audience insights and they don't really understand why Google is targeting these types of audiences and a lot of it comes down to the conversion results now for this one I know which is an audience which is the home automation Enthusiast now that is not an audience which you would usually align with this company's products but the reason why Google is targeting it is because once again it comes back to the data that 82% of all conversions also are part of this audience so the take- home message from that screen is you need understand that with performance max if it starts to see different audiences that are performing better even if they're not directly aligned to what your product or services are about Google will start putting more money into those audiences and the reason for that is because they convert at a higher level and that's why it's so important that you need to have some good conversion data in your account so you can add those audiences when you start your performance Max campaigns because Google will use those High converting audiences as a starting point and then it'll start to test it'll test out some different audiences for Impressions and then if those Impressions generate clicks they continue their testing and then if those clicks generate conversions Google will put more and more money into those audiences and it's really really important to note that no one is part of one audience CU everyone is part of multiple audiences so what Google is really looking at here is the user profile if a user has these 11 audiences plus this extra one which may seem unrelated but if it converts at a high level Google then knows that that's an extra data level that they can then put together because they know it's going to convert better for your products and your services so that's why it's so important that when you start performance Max you've got some baseline conversion data because Google uses that audience data at the start and what it does it just means that you're going to be seeing much faster results with performance Max now the reason for why it's better to start with search and shopping because with search and shopping you have some more manual control so you can Target the search turns better you can also turn up or turn down the different audiences through bid optimizations and these are all the the things that you can't do with performance Max so once again that's why it's better to start with search and shopping get those three factors in place you're getting 30 conversions you've worked out a conversion based bidding strategy works and you've also got a budget to be able to see success with performance Max that's when you start a performance Max campaign and then this brings us to the third point that I want to talk about and that's that your structure of your performance Max campaign is really really important and what I mean by this is that you need to make sure that your asset groups are structured around individual keyword themes or product categories a big common mistake that I see with performance Max is that people will create asset groups around audiences so what they'll do let's just say that you have product a and what they'll do is that they will Target that product category but then they'll duplicate asset groups and they'll have the same product category but going to different audiences the problem with that is and remember when we're on that screen share is that in built into performance Max it does that already so don't for one minute think that you're going to be able to see long-term results I have done some testing on this myself by adding in a new section of audiences and you do see a little popup but eventually those results go away the best results with performance Max are seen when you have a good structure now remember what the role is of the asset group the asset group allows us to put in some different images different ad copies so that we can then give the most relevant ad copies and images and YouTube videos for the individual user that's why you want to make sure that with your performance Max campaign structures that's built around different keyword themes so your different services or your different product categories the other benefit of setting up your performance Max campaign in that way is that then you can then go through and review your data and then once you've reviewed that data if you see that there's a certain product category or a certain group of services which is not getting much spend but they are getting some conversions you can break that out into a separate campaign and the reason why you're doing that is that you're forcing Google to spend more money on those different products and services and what I want to do is I'm going to show you a video where I explain the benefits of that further but remember if you want to see how to correctly set up your performance Max campaigns make sure you follow that link in the description to get my performance Max campaign setup guide thank you again for joining me my name is Aaron Young from Define Digital Academy it's been an absolute pleasure having you here and if you'd like to learn how you can review your performance Max data at an asset group level and make those right decisions so that you can separate out your performance Max campaigns to increase your results even further I want you to go through and watch this video right here once again thanks for joining me see you next time