Google Demand Gen Campaigns: The New Discovery Ads

Search ads harvest demand. Demand Gen creates it. Google's rebranding of "Discovery Ads" to "Demand Gen" wasn't just a name change; it was a fundamental shift in how we approach the upper funnel. With the explosion of YouTube Shorts (now 50 billion daily views), Google needed a product to compete with Meta (Facebook/Instagram) and TikTok. Demand Gen is that product.

If you are only running Search, you are fighting over the 3% of the market ready to buy right now. Demand Gen allows you to court the 97% who will buy next month.

In this guide, we cover the Demand Capture Framework, the creative specs that actually stop the scroll, and the "Lookalike" audiences that Search campaigns can only dream of.

The Financial Impact of "Warm" Traffic

Cold Search traffic is expensive. A user searching for "CRM Software" might cost $50 per click. A user who watched a 30-second video about your CRM on YouTube Shorts might cost $0.05 per view.

If you warm them up with Demand Gen, they later search for your Brand Name ("YourCompany CRM"). Brand clicks cost $1. You have effectively lowered your blended CPA by acquiring the user upstream.

The Full-Funnel CPA Formula:

$$ \text{Blended CPA} = \frac{\text{Cost (Search)} + \text{Cost (Demand Gen)}}{\text{Total Conversions}} $$

We typically see that adding Demand Gen increases total conversion volume by 20% while keeping Blended CPA flat.

Theory: Where Does It Show?

Demand Gen is a "Social" campaign on Google properties. It shows on:

1. YouTube Shorts: (The biggest opportunity).
2. YouTube In-Stream: (Skippable ads).
3. Discover Feed: (The news feed on Android phones).
4. Gmail: (Promotions tab).

Unlike Search, this is Push Marketing. The user didn't ask for you. Your creative must be "Thumb-Stopping."

Framework: The Lookalike Expansion

Demand Gen is the only Google campaign type that allows Lookalike Segments (similar to Facebook). They work by taking your "Seed List" (e.g., Past Purchasers) and finding the top 5% of users in the Google ecosystem who behave similarly.

The Segmentation Matrix:

• Narrow (2.5%): Closest match. Use for direct conversion.
• Balanced (5%): Good mix of reach and relevance.
• Broad (10%): High reach. Use for brand awareness.

Execution: Building the Perfect Campaign

Step 1: The Audience

1. Upload your customer list to Audience Manager.
2. Go to your Demand Gen campaign → Audiences.
3. Create a Lookalike Segment based on that list. Select "Narrow" to start.
4. Layer on "In-Market Segments" (e.g., "Business Software") as a separate ad group to test against the Lookalike.

Step 2: The Creative Assets

You cannot use stock photos here. You are competing with TikTok creators. You need 3 formats for every ad group:

1. Video (Shorts): 9:16 vertical video. Under 60 seconds. Fast cuts. Hook in second 0-3.
2. Image (Discover): 1.91:1 (Landscape) and 1:1 (Square). High contrast. No text overlays (Google overlays headlines for you).
3. Carousel: Storytelling. Image 1: Problem. Image 2: Solution. Image 3: Offer.

Step 3: The Bidding Strategy

Start with Maximize Conversions. Demand Gen needs data. If you strangle it with a strict tCPA target on Day 1, it will never spend. Let it run for 2 weeks. Once you have 50 conversions, switch to Target CPA.

Advanced Strategy: The "Shorts to Search" Bridge

The user watches your Short but doesn't click. How do we capture them? You need to bridge the gap.

1. Create a Segment: "Viewed any video from [Channel] in last 30 days."
2. Apply as Observation: Add this segment to your Search Campaigns.
3. Bid Adjustment: Add a +50% Bid Adjustment.

Now, when that user eventually searches for your generic keywords ("best crm"), you bid aggressively to ensure YOU capture the demand you created.

Case Study: B2C Furniture Brand

Client: Sofa Retailer Challenge: Search CPCs were rising to $8.00. Facebook Ads were volatile.

The Strategy:

1. Launched Demand Gen focused on YouTube Shorts.
2. Creative: 15-second tours of the showroom focusing on texture and comfort.
3. Audience: Lookalike (5%) of past high-value customers.

The Result:

• Views: 2 million views at $0.02 CPV.
• Direct ROAS: 1.5 (Low).
• Assisted Conversions: The "Brand Search" volume doubled in 30 days.
• Blended ROAS: Rose from 3.0 to 4.2.

The Demand Gen campaign didn't get the credit, but it did the work.

Pitfalls to Avoid

1. Treating it like Display

Do not reuse your banner ads. Banner ads are for sidebars. Demand Gen is for feeds. If your image looks like an ad, people scroll past it. It must look like content.

2. Over-Targeting

Demand Gen relies on AI. If you restrict age, gender, device, and add 50 keywords, you kill the performance. Give it the Seed Audience (Lookalike) and let it find the users. Trust the machine.

3. Ignoring Gmail

Gmail ads look boring, but they convert. Ensure your subject lines (Headlines) are punchy. "Open Me" doesn't work. "Your 20% Discount Inside" works.

Summary

Demand Gen is the future of Google's upper funnel. It is the bridge between the intent of Search and the scale of Social.

Your Launch Checklist:

1. Upload your Customer List (hashed email addresses).
2. Create a Lookalike Audience (Narrow).
3. Produce 3 Vertical Videos specifically for Shorts.
4. Set bidding to Maximize Conversions for the first 14 days.

Stop waiting for people to search. Go find them.