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Contents

What is Performance Max?
How does Performance Max work?
Performance Max vs Smart Shopping
Pros of Performance Max
Drawbacks of using Performance Max
Why your performance data is vital
Reporting on Performance Max
When should I use Performance Max?
What are the alternatives to Performance Max?
Compare bid management options
Additional resources

What is Performance Max?

Having launched in November 2021, Performance Max campaigns are one of Google’s most recent offerings for advertisers. It’s set to replace Smart Shopping campaigns by September 2022. You may also see Performance Max referred to as "PMax" around the internet.

This new campaign type is goal-based and lets advertisers show their ads across Google’s advertising channels, including Search, Display, Discover, Maps, Gmail, and YouTube.

How does Performance Max work?

The new campaign enables Google to offer single-campaign optimisation across multiple channels. Like its soon-to-be predecessor, Smart Shopping, Performance Max automates bidding using a machine learning tool akin to Smart Bidding to optimise ad performance in real-time.

In Performance Max campaigns, users upload creative assets like videos, images, copy and titles to be used in their ads. Next up, the advertiser chooses a marketing objective alongside a conversion goal (online sales, lead generation, or offline sales.) Google’s algorithm then tests different combinations of your assets across various channels to determine the most effective combination and channel for campaign performance.

Performance Max will target users according to the conversion goals the retailer selected when setting up the campaign. This targeting is based on the Audience Signals input by the advertiser or retailer.

What are Audience Signals?

You may have come across Signals in your Google Search Ads before. Audience Signals can be understood as user intent signals for a specific audience.

Performance Max vs Smart Shopping

Performance Max is set to replace Google Smart Shopping by the end of Q3 2022. Advertisers who haven’t already made the switch will automatically have their Smart Shopping campaigns converted to Performance Max campaigns.

Unlike Smart Shopping, Performance Max campaigns cover Google Maps and Discover platforms, giving your ads more visibility.

This new campaign type will have the same foundational features as Smart Shopping but will build on inventory and data insights given to advertisers, while still not giving advertisers access to all campaign data.

Since this new campaign type still doesn’t offer users full transparency and access to data, Performance Max may still not be the best option for retailers looking to fully optimise their advertising efforts.

What are the main advantages of Performance Max?

Ultimately, Performance Max’s main selling point is that it saves retailers and advertisers time and effort spent manually managing campaigns. Once you’ve set the goals of your campaigns and your budget, Google automates your campaign for you.

Change all campaigns in one place

Since Performance Max provides users with a simple way of getting their ads displayed across multiple platforms, the unified campaigns cover more platforms than Smart Shopping campaigns can, again reducing time spent managing your cross-platform campaigns.

Find new audience segments

This campaign type also aims to help advertisers unlock new audience segments: with a real-time understanding of customer intent and behaviour, ads are targeted toward interested and relevant shoppers.

Creative control over assets

Since you upload your own creative assets to Performance Max campaigns, you have some control over the appearance and content appearing in your ads. Google also provides a Combinations Report where you can see the best-performing assets.

What are the drawbacks of Performance Max?

To put it plainly, Performance Max seriously hinders control over your campaigns and the performance data you get from them. That’s easily said, but what exactly do we mean? Let’s dive in, shall we?

Lack of control

Since the AI constructs ads using different assets, the advertiser has limited control over the ads produced. If a strong brand image is important to your business, Performance Max could limit your ability to maintain your branding safely.

Researching the experiences of retailers trialling the Performance Max beta tool returns a number of issues. Whilst retailers have seen an initial improvement in performance, the technology seems to run awry.

Similarly, PPC managers must provide thorough information and collateral for asset groups. Failure to spend sufficient time providing matching assets can result in poor ads thrown together by Performance Max, namely their auto-generated videos.

Usually, advertisers on Google can use dayparting to better target their ideal audiences. However, retailers using Performance Max are unable to control the time of day their ads are served, leaving ads to serve randomly.

Irrelevant clicks at inconvenient times of the day? Here's how dayparting reduces wasted ad spend, boosting your ROAS

Finally, using Audience Signals Performance Max targets audiences by their likelihood of converting. However, amidst growing privacy restrictions, it's becoming increasingly difficult to collect data on user behaviour. Unlike Google's automated tools, Bidnamic targets search terms with a strong likelihood of converting. 

Discover how Bidnamic targets search terms using purchase intent

Lack of data

Mounting privacy protection on iOS devices continues to restrict data retention, making it more difficult again to target audiences, which is what Performance Max aims to achieve.

Just like Smart Shopping, Performance Max black-boxes your invaluable performance data, preventing you from understanding the search terms your audience uses. This is important as this data can be used in your SEO and social media channels, as well as to inform other business decisions like what to stock, how much of it, and when.

But that's not all. Smart Shopping restricted data access, but this only applied to Smart campaigns on the Shopping channel. Performance Max restricts performance data across all the campaigns their campaigns run on, so retailers can't see how their ads perform on different channels.

Finally, Performance Max prevents the retailers from accessing the performance of their campaigns at the SKU level. This means retailers could be grossly overspending for their sales, or on the other hand, bidding too little and missing out on valuable traffic.

Learn how Bidnamic bids at the SKU level

What’s so bad about losing access to my data?

Having full access to your campaign performance data is vital. From understanding how your money is being spent to better your campaigns to knowing where your money’s going, data is incredibly valuable.

Much like Google Smart Shopping, Performance Max is a ‘black box’ and lacks transparency. Without this data, you’ll miss out on key information that could hugely impact your performance.

To beat your competition, you need access to all of your data

Without audience data, you’ll miss out on executing effective social ads and retargeting campaigns. On top of that, search term data is a great way to inform your SEO strategy as well as social and email marketing campaigns.

Reporting on Performance Max

As mentioned above, reporting and data transparency on Performance Max is an issue for retailers. This is a problem that has been carried forward from Smart Shopping.

Currently, advertisers can report on top-level campaign performance, and location performance, and see performance reports by day of the week, hour-of-day, and both day and hour together.

Users cannot report on individual assets, making it difficult to see what could be changed to improve campaigns. Instead, you can only see a general overview.

While you can inform the targeting of your ads, you receive no information about how targeting is performing. You get no information about who is seeing your ad which is vital for monitoring performance. 

Reporting on Performance Max has many shortcomings and isn't a good option for retailers looking to have access to all of their campaign data to maximise their efforts.

When should I use Performance Max for my campaigns?

If you're an advertiser looking to appear on all of Google’s advertising platforms using a single campaign, Performance Max might be for you. 

In fact, smaller businesses managing their ad campaigns in-house may benefit most from Performance Max, taking advantage of the unified campaign approach without needing to delve too deeply into strategy.

Bidnamic: advanced machine learning, years of human expertise

As an automated solution to bid management, Performance Max is able to relieve retailers of time spent poring over the ROAS for thousands of SKUs, making – hopefully – accurate bid adjustments. What’s great for formerly brick-and-mortar retailers (and other non-digital natives) is that Performance Max campaigns are also fairly easy to set up.

However, in addition to having no ability to adjust bids for different brands, products or SKUs, there are a number of other limitations to what you can do with Performance Max:

  • Negative keywords aren't currently available with Performance Max. Without negative keywords, you will be wasting valuable budget on irrelevant search traffic. One example of this is users seeing Shopping ads for window blinds appearing in searches for guide dogs for the blind.
  • You have no control over where the ads appear. Not having the option to exclude undesirable channels means you’ll have to pay for clicks from unwanted traffic. What's more, you don't have access to channel-specific reports.
  • Limited location targeting. You can set the country, but you can’t target a specific region or exclude a city.
  • Ad scheduling is out of your control. Google decides the best times and days to spend your budget, and you have no visibility into how that is decided.
  • You can’t choose which devices to target. If your target audience mainly uses mobile, you’ll still have to pay to run ads on laptops and tablets too.
  • Challenges with attribution modelling. Since Performance Max runs one unified campaign over various channels, your conversion will be attributed to a Performance Max campaign. That means you can't see exactly which platform your ad was clicked on, and which prompted the conversion.
  • You lose the ability to prioritise specific products. There’s no way to promote/demote certain products. For example, if you want to shift some end-of-season stock or get rid of a backlog of less popular sizes.
  • Performance Max cannot leverage and analyse data of sales made through other channels (e.g. offline). If you earn significant business through offline/phone-based sales then Performance Max might not work well for you.

However, the greatest disadvantage to giving Google control over your Shopping campaigns is the subsequent lack of transparency. Like Smart Shopping, Performance Max is a ‘black box’ which prevents access to your valuable search term data. If it was available, this data could be used to develop and guide your business across areas such as SEO, other paid advertising channels, feed optimisation, and new product development.

Here at Bidnamic, we value transparent data. Read more about our commitment here.

Search data can be an invaluable resource for the growth of your business

What are the alternatives to Performance Max?

Google Shopping agencies

Lots of marketers like the control that comes from managing campaigns manually. It allows you to adjust bids based on unique variables, for example, stock availability.

But hundreds of campaign metrics, thousands of products, and tens of thousands of search terms mean that staying on top of Google Shopping management has gone beyond what humans can manage.

Specialist PPC agencies use scripts or third-party tools, often spreadsheet-based, to automate reporting and generate optimisation suggestions. These then need to be analysed, and the best of them implemented manually using some form of block bidding.

Bidnamic: advanced machine learning, years of human expertise

As an automated solution to bid management, Performance Max is able to relieve retailers of time spent poring over the ROAS for thousands of SKUs, making – hopefully – accurate bid adjustments. What’s great for formerly brick-and-mortar retailers (and other non-digital natives) is that Performance Max campaigns are also fairly easy to set up.

However, in addition to having no ability to adjust bids for different brands, products or SKUs, there are a number of other limitations to what you can do with Performance Max:

  • Negative keywords aren't currently available with Performance Max. Without negative keywords, you will be wasting valuable budget on irrelevant search traffic. One example of this is users seeing Shopping ads for window blinds appearing in searches for guide dogs for the blind.
  • You have no control over where the ads appear. Not having the option to exclude undesirable channels means you’ll have to pay for clicks from unwanted traffic. What's more, you don't have access to channel-specific reports.
  • Limited location targeting. You can set the country, but you can’t target a specific region or exclude a city.
  • Ad scheduling is out of your control. Google decides the best times and days to spend your budget, and you have no visibility into how that is decided.
    You can’t choose which devices to target. If your target audience mainly uses mobile, you’ll still have to pay to run ads on laptops and tablets too.
  • Challenges with attribution modelling. Since Performance Max runs one unified campaign over various channels, your conversion will be attributed to a Performance Max campaign. That means you can't see exactly which platform your ad was clicked on, and which prompted the conversion.
  • You lose the ability to prioritise specific products. There’s no way to promote/demote certain products. For example, if you want to shift some end-of-season stock or get rid of a backlog of less popular sizes.
  • Performance Max cannot leverage and analyse data of sales made through other channels (e.g. offline). If you earn significant business through offline/phone-based sales then Performance Max might not work well for you.
At Bidnamic, we combine machine learning with human thinking to get the best results. Our automated bidding platform is 100% transparent, providing granular data insights.

data transparency

We know that no one knows your business like you do, which is why we keep you and your brand expertise at the heart of decision-making. 

With regular catch-up calls with our Client Success team, you and your agency can communicate concerns, discuss new ideas, plan for upcoming retail events, and receive a thorough report on the results of your Google Shopping campaigns.

With Bidnamic’s unique SKU level approach we are able to:

  • Match search terms to individual SKUs. This enables us to understand why that product didn’t convert, without this you’re buying traffic blindly.
  • Use real-time search term data to pick up high performing search terms. Being able to understand the intent behind each search query and being able to control how much to bid for each search term gives retailers an edge over competitors on Google Shopping. What’s more, access to a wealth of real-time data enables retailers to make use of this highly valuable data across other channels.
  • Use natural language processing to match relevant search terms and bids more aggressively for long-tail search terms. This means that the retailer using Bidnamic consistently outrank those using the limited smart shopping bid range. Ad budget is also saved from none relevant terms (negatives) as well as bidding appropriately for awareness and consideration terms to maximise profits.

Quick reference: Smart Shopping, agencies, and automated independent platform

Find out which management option works best for you using the table below.

manual management automated management Bidnamic platform

Final thoughts

If you’re looking for more information on Smart Shopping before the inevitable change to Performance Max, we have all you need to know here.

Google Shopping can be a time-consuming platform to operate successfully. Choosing the right management type for your business is crucial in determining your performance: read about what’s available to you.

Additional resources

How Smart Shopping measures up against Bidnamic
How a Google Shopping or PPC agency manages your Google Shopping
Bidnamic’s machine learning approach vs a PPC or Google Shopping agency
Combining Bidnamic’s machine learning platform with a PPC agency
How Bidnamic’s machine learning technology works
What to do in 2022 to beat your competition.

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