When it comes to Demand Gen campaigns in Google Ads, many eCommerce brands do one of two things: either ignore them completely or waste money because they set them up incorrectly.
That is not a knock on the brands. Demand Gen is genuinely confusing when nobody walks you through what it is actually supposed to do, and most of the content out there either oversimplifies it or skips the parts that actually matter.
Google built its advertising empire on intent, and for a long time, that was enough. Someone searches for a product, your ad appears, and they buy. But that model has one hard ceiling: it only reaches people who are already looking for what you sell, and that pool is always smaller than you want it to be.
Demand Gen was built to go beyond that ceiling. It puts your brand in front of people before they start searching, creating the kind of familiarity that eventually turns into intent. But tapping into that potential is not as straightforward as turning on a new campaign and waiting for results.
To make sure you get this right, we will walk you through exactly what Demand Gen is and how to use it correctly as part of a full-funnel Google Ads strategy.
Demand Gen is Google’s visual advertising campaign type built to reach people before they start searching. It does not wait for someone to type a query. It puts your brand in front of people while they are already doing something else entirely, with the goal of creating enough curiosity that they come back on their own terms.
Search and Shopping only work when someone is already looking for what you sell. Demand Gen reaches people before that moment happens. It introduces your product to people who fit your buyer profile but have not started looking yet, and, done correctly, it is what eventually drives them to search for you by name.
Before Demand Gen, Google’s answer to upper-funnel visual advertising was Discovery campaigns. The concept was right, but the execution had real gaps. For many ecommerce brands, it is nearly impossible to generate consistent returns from them.
Google replaced Discovery entirely with Demand Gen in 2023, completing the full migration by March 2024. The upgrade was substantial. Lookalike audiences became a native feature, YouTube Shorts was added as a placement, and creative formats expanded well beyond static images. Then, in July 2025, Video Action Campaigns were folded in too, making Demand Gen the primary home for visual advertising across Google’s ecosystem.
Demand Gen campaigns in Google Ads were never built to do what Search does. It was built for a completely different stage of the buying journey, and understanding that changes everything about how you use it.
A practical way to think about Google’s paid advertising ecosystem is in three layers. Each campaign type has a natural role within the buying journey, and when you place them correctly, they work together instead of against each other.
Here is how those layers break down:
Top of Funnel – Awareness
YouTube awareness campaigns exist to put your brand in front of people who have never heard of you. There is no conversion goal here. The job is purely to build enough recognition that when someone encounters your brand again later, they already know who you are.
Middle of Funnel – Consideration
Demand Gen is the most flexible of the three. It can reach completely cold audiences who have never heard of your brand, just like YouTube awareness campaigns do. But it also attracts people who have already seen your brand and nudges them toward purchase intent. Depending on how you set up your audiences, it can do both jobs simultaneously within the same account.
Bottom of Funnel – Conversion
Search and Shopping capture people who are actively looking for what you sell and are ready to make a decision. They perform better when Demand Gen runs alongside them because the audiences arriving at this stage are already familiar with your brand, making them easier and cheaper to convert.
In many cases, Demand Gen’s job is to take someone from “never heard of this brand” to “I should look this up.” Doing that consistently is what keeps your bottom funnel fed with fresh demand.
Without it, growth eventually stops. The pool of people already searching for what you sell is finite. Once you exhaust it, your CPA starts climbing, and no amount of Search optimization will change that.
That said, Demand Gen only delivers when the conditions around it are right. Before you add it to your account, make sure these are true:
Once you understand where Demand Gen sits in your funnel, the next question is how to actually build around it.
Demand Gen campaigns in Google Ads do not work in isolation. It needs the right structure around it to deliver results, and that structure starts before you even create the campaign. That is why if your Search and Shopping campaigns are not yet profitable, Demand Gen is not your next move.
If that is the case, sort those out first. Once your core campaigns are in a good place, here is how to build a demand gen strategy in Google Ads the right way:
The first thing you need to do before building anything is connect your Google Merchant Center product feed. This is a campaign-level setting, and once your campaign goes live, you cannot change it. Get this right before you publish anything.
When your feed is connected, Google pulls your product images, pricing, and availability directly into your ads. No manual updates needed on your end. Google handles the matching, showing each person the product most relevant to them based on their behavior across its platforms.
Here is what you get when you connect your feed:
One thing worth knowing: if you have a large product catalog, you do not have to advertise everything. You can select specific products or product groups to feature in your Demand Gen campaigns.
How you organize your Demand Gen campaigns in Google Ads from the start will determine how clearly you can read performance data and how confidently you can make decisions as you scale.
Start with your campaign naming. Each campaign name should immediately tell you what it is targeting. Here are examples that work:
This becomes more important as your account grows and you are managing multiple Demand Gen campaigns simultaneously.
At the ad group level, follow one rule: one audience type per ad group. Never combine cold and warm audiences in the same ad group. When you mix them, the data becomes unreadable, and the algorithm receives conflicting signals about who it is supposed to find.
Here is how to think about the split:
Keeping these two separate from day one is what gives you clean, actionable data as the campaign matures. It also makes budget decisions significantly easier because you can see exactly what each audience type is contributing.
For an ecommerce brand with real customer data, audience setup is where Demand Gen either performs or disappoints. The quality of your audience’s inputs directly affects the quality of the people Google shows your ads to.
You have four audience types to work with in Demand Gen:
For brands with strong first-party data, build your lookalikes from your highest-value customers rather than your entire buyer list. A more refined source list produces a sharper lookalike because Google has a clearer picture of who your best customers actually are.
Google also gives you control over how broadly your lookalike audiences expand. There are three reach levels to choose from:
For most eCommerce brands starting out with Demand Gen, Narrow or Balanced is the right call. Broad gives you more reach, but the further Google moves from your source list, the less reliable the targeting becomes. Start tight, prove the performance, then expand from there.
Demand Gen lets you choose exactly where your ads appear. You are not locked into running across every placement from day one, and for most ecommerce brands, starting with everything turned on is a mistake.
Here is where Demand Gen ads can run:
The right starting point depends on where your audience spends their time and what your creative assets look like.
If you have a video ready, start with YouTube. If your creative is primarily image-based, Discover is a strong first placement. Gmail and Display tend to work better once the campaign has had time to optimize and you have a clearer read on what is performing for your specific audience.
Bidding is where many ecommerce brands make the mistake of being too aggressive too soon. The algorithm needs time to learn before you start putting constraints on it.
Based on what consistently works for ecommerce brands at scale, here is how we recommend approaching it:
Keep this in mind: every time you make a significant change to your bid strategy, the campaign re-enters the learning phase. Avoid making multiple changes at once. Make one adjustment, give it time to stabilize, then make the next move.
Demand Gen needs enough budget to move through its learning phase and gather meaningful data. Running it on a thin budget is one of the fastest ways to get inconclusive results and walk away thinking the campaign does not work.
Here’s a commonly used budget benchmark for Demand Gen:
These benchmarks give the algorithm enough room to find and convert the right audiences without running out of data before it has had a chance to learn.
For your Target CPA, start by setting it at roughly twice your standard campaign performance. For Target ROAS, start below what your Search campaigns deliver and work up from there as the campaign matures. Both approaches give the algorithm room to operate in the early stages before you start tightening targets.
Do not increase the budget on a fixed schedule. Increasing spend before the campaign has stabilized forces the algorithm back into learning mode, resetting the optimization progress you have already made. Wait for these signals first:
When those signals are present, gradually increase the budget and give the campaign at least two weeks to adjust before making another move.
Following the steps above gets you most of the way there. But even well-structured Demand Gen campaigns can underperform when you set wrong expectations or you track the wrong metrics. If you go into any Google Ads community right now, you will find brands that did most things right and still walked away disappointed.
Almost every time, the problem traces back to one of these:
When Demand Gen works properly, it creates a ripple effect across your entire account. As mentioned before, the audiences it warms up today show up in your Search results tomorrow. The people it introduces to your brand on YouTube are the ones who will click your Shopping ads next week. Over time, the entire account becomes more efficient because the middle of your funnel finally does its job.
The numbers back this up. A Nielsen meta-analysis tracking thousands of campaigns found that Demand Gen delivers 58% higher ROAS than Video Action Campaigns. One global retail brand took it further, implementing Demand Gen as part of their full-funnel strategy and achieving 1.86x ROAS while cutting their CPA by 66%.
Demand Gen campaigns in Google Ads put your brand in front of the right people first. Search and Shopping close the deal after. But that chain only works when all three are connected and running with a clear role. A Demand Gen campaign sitting in isolation, unmeasured at the account level, and disconnected from your conversion campaigns, will never show you what it is actually capable of.
The bottom line is simple: Demand Gen is not Search, nor is it Discovery with a new name. Treating it like either of those is what leads brands to waste budget and walk away thinking it does not work.
Many ecommerce brands hitting a growth ceiling on Google Ads are running incomplete funnels. Search and Shopping can only take you so far when there is nothing feeding them from above.
The ecommerce brands that get this right are no longer limited by the size of their existing search audience. They build a pipeline that continuously feeds their bottom funnel with people who already know who they are and are ready to buy.
If you want to build that kind of account, that is what we do at Vysta. We build full-funnel Google Ads strategies for high-growth ecommerce brands that are ready to scale beyond Search and Shopping.
Book a free strategy call with us and let us show you what that looks like for your business.
Demand Gen is Google’s visual advertising campaign type that reaches people before they start searching. It runs across YouTube, Google Discover, and Gmail, targeting users based on their interests and behavior rather than keywords. Unlike Search, the goal is not to capture people who are already ready to buy. It is to create enough curiosity that they come back later and convert.
Demand Gen is a significant upgrade from Discovery ads in almost every way. Discovery was limited to static images across Gmail, Discover, and YouTube home feed with basic audience controls. Demand Gen replaced them entirely in 2023 and added YouTube Shorts, in-stream video, lookalike audience targeting, carousel formats, and more advanced bidding options. The core idea of reaching people before they search is the same, but the tools available to do it are completely different.
Yes, and it is more straightforward than you might think. You start by exporting your Google Ads reports and cleaning up the data so Claude can actually read it properly. Then you give it context about your business, your targets, and what you are trying to find. From there, the right prompts will pull out patterns across your campaigns that would take a human analyst days or weeks to piece together on their own.
Use Demand Gen when your Search and Shopping campaigns are already profitable, and you need to expand beyond the audience that is actively searching for you. It is the right move when you are ready to scale, have quality creative assets, and can commit enough budget for the algorithm to learn. Without those conditions in place, the campaign will not have what it needs to perform.
No. Demand Gen and Meta operate on completely different ecosystems. Meta reads social behavior inside Facebook and Instagram. Demand Gen reads search intent and browsing behavior across Google’s platforms. They serve different audiences at different stages and work better together than as alternatives.
YouTube awareness campaigns and Demand Gen both run on YouTube, but they serve completely different purposes. YouTube awareness campaigns are built for reach and brand recognition at scale. Demand Gen uses YouTube as one of several placements to target specific audiences based on behavior and intent signals, with the goal of moving them closer to a purchase rather than simply introducing them to your brand.
Book a call with Nate Schneider to explore how Google and YouTube ads can drive scalable, measurable growth.
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