Performance Max vs. Demand Gen: Which Google Campaign Should You Run?

Google Ads has gotten way more powerful (and a whole lot smarter) over the years. But with great AI-powered automation comes a not-so-tiny question:

Should you be running Performance Max or Demand Gen campaigns?

If you’ve poked around in your Google Ads dashboard lately, you’ve probably seen both. One promises full-funnel domination with automation galore. The other offers creative flexibility and audience precision that can make your brand pop in all the right places.

Spoiler alert: they’re both good. But they’re built for different jobs.

At BFO, we’ve helped brands use both these campaigns to drive results, and we’ve also seen what happens when you use the wrong one for the wrong goal (spoiler: it’s not pretty).

So let’s break it down. Whether you're looking to capture conversions like a machine or generate demand with scroll-stopping content, we’ll help you figure out which campaign fits your needs.

What Is Performance Max (PMax)?

Performance Max, aka PMax, is Google’s AI-powered, conversion-hungry ad campaign that basically says: “Hey, give me your assets and goals, and I’ll find your best customers everywhere Google lives.”

What It Does

PMax is designed to maximize performance across the entire Google ecosystem—Search, Shopping, YouTube, Display, Gmail, Discover. If Google owns it, PMax can run ads on it.

You don’t choose the channel. You don’t set placements. You feed the machine a goal, some creative assets, and audience signals, and the algorithm does the rest.

Key Features

• Goal-Based Bidding: Tell it what you want (sales, leads, store visits), and it chases conversions like a heat-seeking missile.
• Automation Everything: Bidding, budgeting, creative testing, audience matching—it’s all automated.
• Real-Time Optimization: Google uses its real-time data (and a scary-smart AI) to decide where and how to show your ads for max impact.

Best For:

• Lead Gen & eComm: Especially when you want volume and efficiency.
• Hands-Off Advertisers: Don’t want to micromanage platforms? PMax is your friend.
• Broad Reach Campaigns: If your goal is scale over specificity, this is the play.

Think of PMax as your full-funnel machine. It's built for bottom-funnel dominance, so the closer someone is to converting, the better PMax performs. It's not super picky about who sees the ad, but it's really good at learning who’s ready to click “buy.”

What Is Demand Gen?

If PMax is your conversion machine, Demand Gen is your brand-building artist. It’s Google’s visually-driven campaign type designed to build awareness, spark interest, and nurture audiences before they’re ready to buy.

Where PMax wants the “I’m ready to convert” crowd, Demand Gen is for the “I’m curious, show me something cool” crowd (can you do a kickflip?).

What It Does

Demand Gen campaigns are all about top and mid-funnel engagement. They live where people discover new things, not where they’re actively searching.

We’re talking:

• YouTube (hello, skippable and non-skippable ads)
• Discover Feed (Google’s answer to your scrolling addiction)
• Gmail Ads (those promo tabs aren’t dead yet)

It’s the right campaign when you want to be the first name people think of when they’re ready to buy later.

Key Features

• Visually Engaging Ads: Think videos, carousels, and rich creative formats.
• Audience Nurturing: Target users in the awareness or consideration phase.
• More Control: Compared to PMax, you get more say over targeting and placements.
• Granular Reporting: Detailed insights into performance by audience and placement.

Best For:

• Brand Awareness: Getting your name in front of new audiences.
• Lead Nurturing: Moving prospects from “maybe” to “tell me more.”
• Creative-First Campaigns: When your ads need to shine, not just perform.

Demand Gen is your chance to tell your story with visuals and targeting that makes sense for your audience. It’s less about “capture the click now” and more about “plant the seed so the click happens later.”

This is how you fill the funnel for PMax to finish the job.

Key Differences Between Performance Max and Demand Gen

Think of PMax and Demand Gen like the peanut butter and jelly of Google Ads. They work best together, but each brings a very different flavor to your marketing sandwich (yes, we’re writing this while hungry).

Here’s how they stack up.

Campaign Goals

• PMax: Laser-focused on conversions. It's built to find the people most likely to take action right now, whether that’s buying, filling out a form, or downloading your thing.
• Demand Gen: All about building interest. It’s there to warm up cold audiences and get your brand in their brain before they’re ready to buy.

Level of Automation

• PMax: Super automated. AI handles bidding, placements, and creatives (if you let it). Great for hands-off performance marketers.
• Demand Gen: Also uses AI, but gives you more manual control over audiences, creative formats, and placements. You get to flex your strategy muscles a bit more.

Ad Placement

• PMax: All over Google’s playground—Search, Shopping, YouTube, Display, Gmail, Discover. It’s everywhere.
• Demand Gen: Focuses on visual channels only—YouTube, Discover, and Gmail. It’s designed for scroll-stopping creative and high-impact visuals.

Reporting & Optimization

• PMax: Less transparent. It bundles data across channels and can be a bit of a black box unless you really know how to interpret the signals.
• Demand Gen: Gives granular reporting by audience and placement, so you can make sharper optimizations and understand what’s actually driving engagement.

These aren’t competing campaigns. Instead, they’re friends who should both be invited to your marketing happy hour. Demand Gen fills the funnel, and PMax squeezes every last drop out of it. Used together, they can create a full-funnel powerhouse.

When to Use Performance Max, Demand Gen, or Both

Choosing between PMax and Demand Gen is about aligning with your campaign goals, creative assets, and funnel stage.

Use Performance Max When:

• You’re driving conversions. Want purchases, leads, bookings, or downloads? PMax is your performance champ.
• You have limited time or resources. PMax is plug-and-play if you have assets ready. Google’s automation does the heavy lifting.
• You want full network coverage. It reaches across Search, Shopping, Display, Gmail, YouTube, and Discover all in one campaign.
• You’ve got historical data. The more Google knows about your past winners, the better it can optimize with machine learning.

Example: An eCommerce brand wants to push sales during Q4. PMax helps them get the most value out of every impression, fast.

Use Demand Gen When:

• You’re launching something new. Demand Gen is perfect for warming up audiences who don’t know your brand (yet).
• You have stunning visual creative. Big images, snackable videos, product demos? This is your playground.
• You’re targeting specific audiences. Demand Gen’s detailed audience segmentation lets you build interest with precision.
• You want to build brand recall. It’s a great way to stay top of mind, even before a user shows intent.

Example: A B2B SaaS company is entering a new vertical. They use Demand Gen to run a thought-leadership video campaign targeting IT decision-makers on YouTube and Discover.

Use Both When:

• You’re running a full-funnel strategy. Demand Gen builds awareness → PMax captures demand and drives the conversion.
• You want performance now and later. PMax brings the short-term wins. Demand Gen sets up the long game.
• You’re scaling. Pairing both allows you to capture and nurture new users without burning out one campaign type.

Example: A national restaurant chain runs Demand Gen to introduce a new LTO with mouthwatering videos, while PMax retargets high-intent users with app download CTAs and order-now promos.

If you're running both, don’t set it and forget it. Watch for overlap. Test messaging, creative, and audience combinations to make sure each campaign is playing its role without stepping on the other’s toes.

It’s Not Either/Or

PMax and Demand Gen are teammates. Each plays a different role in your digital strategy, and when used together, they can fuel everything from first touch to final click.

If you’re still unsure which one makes sense for your business (or how to run both without burning budget), we’ve got you. Let’s figure out what makes the most sense for your goals and get those campaigns humming!

Ready for some help? We're offering 26% off your first 3 months of a new service: