ChatGPT and AI are all the rage right now. Every app and software on the market has its own spin on an AI tool promising to be as good, if not better, than a human.

Google Ads is no different. I take at least one call a week where a fellow small business owner is asking why their Google Ads campaigns are spending but not performing. A good portion of the time business owners walked through Google’s AI campaign setup and then hoped Google’s AI would do the work.

Most of the time they don’t even realize the campaigns have slowly bled money monthly resulting in substantial ad spend, without producing a single tangible result.

In this article, I’m going to break down a few key things you’ll want to keep in mind if you’re considering Google’s newest campaign type, Performance Max.

What are Performance Max Campaigns?

According to Google AI Overview, “Performance Max campaigns are goal-based campaigns in Google Ads that use AI and machine learning to help advertisers achieve their conversion goals.”

The automated AI will run ads across various channels, including Search, Display, Discover, YouTube, Gmail and Maps. Its algorithm will optimize the budget, bidding and choose the ad placements. I’m not diving too deep in the weeds here because if you’re reading this, you’re probably a small business owner. Not a digital marketer. 

The nitty-gritty of Performance Max you need to understand is you are giving Google ultimate control to decide where your ads will be most effective. This means you will have minimal insight or control to optimize from.

Google lists key benefits of Performance Max as:

1. All Google Ads inventory in a single consolidated campaign.

2. Get the best results with less work.

3. Enjoy the benefits of Google Ads and AI.

So let’s break those down.

Performance Max campaigns Can Do it All (or Can They?)

Promote your business in a single consolidated campaign across the Google Network and run ads across various channels, including Search, Display, Discover, YouTube, Gmail and Maps. Sounds easy enough right? But have you ever tried to use any sort of all-in-one tool?

If you have, then you know they pretty much suck. They can’t do any single task particularly well.

Performance Max can be a great tool but some channels perform better than others. If you’re a small business with a limited budget, you want those dollars going to ad types that drive the biggest bang.

Performance Max campaigns are a bit of a black box. Gaining insights from the campaign data requires advanced scripts most business owners (and even a lot of marketers) don’t know how to use. 

Without clear insights, you’re left hoping Google is choosing the right ad type and placement to maximize your return on ad spend. According to a recent study, programmatic ads have been the biggest revenue source for junk AI-generated websites. An estimated $13 billion is wasted globally on these sites each year. 

Google isn’t going to flag that for you. But a skilled ad manager looking out for wasted spend should.

Performance Max All The Results with Less Work

All the results, with less work. This might be the oldest, most effective marketing hook of all time. Human nature I guess.

According to Google, you simply provide your advertising objectives, creative assets, audience signals, and Performance Max can do the rest. Voilà set it and forget it!! 

Except Google and AI in general cannot assess the nuance and context of the conditions, goals and performance in an account – at least not yet. Only a human handler can provide nuanced data analysis, focused on maximizing your profitability.

I’ll give you an example.

One of my e-com clients sells apparel closely tied to trending pop culture. Think Swifties and Bridgerton. Our Performance Max Shopping campaign was doing quite well, performing above our target goal of 300% ROAS. Which essentially means for every $1 spent in ad spend, this business was getting $3 back.

During my review process I noted none of her new releases were getting much ad time. This piqued my curiosity because the hype around Taylor Swift’s Eras tour was in FULL swing, but the related products were seeing minimal action.

Performance Max promises all the work with less work. So what was going on here?

Why Did Performance Max Ignore New Products?

Programmatic ads rely on machine learning, note the key word ‘learning’. Machine learning works by uncovering hidden patterns within data to make better choices going forward.

Programmatic ads will rely heavily on the historical data because it has been the bulk of the signals feeding the algorithm. Put simply the standard products were receiving the majority of the airtime because Google had accumulated a lot of data for them. 

How Did I Maximize the Performance Max Return on New Products?

Performance Max can be powerful but you have to strong arm it to do what you want and that requires specialized data analysis and a meticulous setup. After analyzing the entire product catalog I was able to segment products by sales performance and optimally restructure the campaigns. This forced Google to pay attention to the products I wanted it to focus on. 

The result? A top performing account was turbo charged to hit record breaking ROAS of 700%+ and ad revenue of $15K+. Not too shabby for $2K in ad spend. Almost 1 year the account is maintaining a return on ad spend of 700%+. The steady and sustainable performance has allowed this business to reach new audiences and tackle new business growth.

Performance Max Enjoy All The Benefits of Google Ads an AI

According to Google – Performance Max is powered by AI and it automatically mixes and matches your assets to show the most compelling ads to customers.

This sounds like a dream come true, right? That is until the automated asset creation does some wacky stuff.

Take for example another client of mine in the health & fitness space. They use a popular gym management software for their 2 in-gym locations in Austin, TX.

During my review process I noted a pretty big jump in costs on a specific keyword which historically had been cheap as chips 🚩

Notice a theme here – these issues bubble up during regularly scheduled reviews. Google Ads is not a set it and forget it marketing approach.

What I discovered was this popular gym management software had made a critical mistake in their Performance Max campaign setup. They had not properly excluded nor disabled some AI ad asset creation ‘features’. 

This simple oversight had a big downstream effect. Not only did it result irrelevant ads for both the software company and my client (and all of the other customers under the software company’s domain). It was delivering a confusing and disconnected experience to legitimate prospects searching for a local gym.

I provided the software company with a detailed explanation of what was happening and what they needed to do to fix their Performance Max campaigns. The issue was quickly addressed but it goes to show you even big fancy software companies with marketing teams can mess up the many settings in Google Ads.

Final Thoughts

Performance Max campaigns aren’t inherently ‘bad’. But it is important to acknowledge they are one, of many tools in the toolbox. And like any job it’s critical to select the appropriate tool to invest wisely in Google Ads marketing.

Stay tuned for my next post where I’ll share some simple steps you can take to prevent Google Ads automated assets from displaying irrelevant or misleading ad content.