Why You Should Avoid Using Google Performance Max Ads
Google’s Performance Max feature has quickly become their most popular ad format. Its appeal lies in its simplicity and the fact that one campaign can cover it all. It's also known for its effectiveness in generating results or at least claiming credit for them, depending on who you talk to.
In a previous post, I dug into Performance Max ads from several angles, which you can check out via this link. However, in this post, I aim to share more personal insights and express my concerns about the major drawbacks of using Performance Max ads.
Although Performance Max ads were created to provide a simple way to manage all types of Google ads under one single campaign, it comes at a high cost. This cost includes a lack of transparency, limited insight into actual results, questionable outcomes, and having to rely on Google’s own reporting for crucial metrics like cost per action or ROAS to determine the success of your campaigns. To many advertisers, especially those not well-versed in online advertising and attributions, this might seem like the perfect solution. However, for those who understand the workings of online ads more deeply, Google Performance Max might be a tool to be wary of.
In this article, we will delve into the risks advertisers face when using Performance Max ads and suggest what other methods could be better.
Google Performance Max is commonly defined as an advertising solution that uses Google’s machine learning to automatically optimize ad placements across all Google Ad platforms such as Search, Display, YouTube, Discover, and more.
The idea is simple. Advertising on Google involves many different ad formats, like ads on Google Search, Display ads, YouTube ads, Google Shopping, and more. The goal is to bring all these together and run your ads across all these formats and platforms under one campaign, so you don’t have to manage the budget or delivery for each ad format. Google does it for you. Then, all the data and learnings from these separate campaigns are grouped under a Performance Max campaign. Sounds great, right? Not really.
This format was Google’s answer to Facebook Ads. Facebook ads from the early days offered automatic customization for their ads. That means if you uploaded an ad formatted for Instagram feed, it could automatically run on other placements like stories or reels, etc. Google has always found it challenging to bring small businesses to its platforms since the setup was more complex compared to advertising on Facebook or Instagram. So, they wanted to offer something simple that requires minimal effort to sign up. You might be wondering what the problem is. Why am I against Performance Max if it's supposed to simplify everything?
Here are the main reasons why I don't think Performance Max ads are a good solution for advertisers.
1. Uncertain Results: Data transparency is crucial in advertising, especially when multiple platforms are in play like Google, Facebook, or TikTok. With Google's Performance Max, the origin of conversions is ambiguous. When a conversion occurs, whether through a Google search, display ad, or YouTube video, Google has this data. Yet, it’s not shared with advertisers. In contrast, running separate campaigns for search, display, shopping, or YouTube would provide most of this essential data. Performance Max strangely performs better while offering less transparency. It’s like Google is saying, “We’ll get you results, but won’t tell you where they’re coming from.”
2. Limited Insights: While Performance Max does provide some insights on conversion-generating search terms, it's just a tip of the iceberg. This vague information gives a false sense of understanding about what's driving conversions. It’s a tactical play by Google to make advertisers feel comfortable without revealing much, keeping them fixated on general metrics like return on ad spend or conversion numbers without knowing the details.
3. No Option for Excluding Brand Keywords: A downside of Performance Max is its inability to exclude your brand keywords, a feature known as negative keywords. For instance, if you own a brand called “Jason’s Shoes” and don’t want ads shown to those searching your brand since they’d click organically, you could exclude this on a regular campaign, not on Performance Max. The lack of this option could lead to misleading data where ads are credited for organic clicks, blurring the distinction between new and existing customers. It's important to note that if you are classified as a "managed account" by Google, which means you spend a lot on ads, your assigned account representative can exclude branded terms from your Performance Max campaign. However, this exclusion mainly applies to search queries. Despite this, Performance Max ads will continue to be displayed to your existing visitors while they navigate through other parts of the internet.
4. Inflexible Ad Creatives: Performance Max takes away control over how your ads appear. Unlike platforms like Meta, where you can customize and test text variations, Performance Max demands full control, sometimes at the cost of brand consistency. Even when certain ad formats, like text-only display ads, don’t align with your brand’s needs, there’s no option to exclude them. If you own a fashion brand or sell a visual product, you cannot opt out of text-only ads through Performance Max, even though showcasing your product visually is crucial.
5. Heavy Retargeting: There’s a theory, although without hard data, that Performance Max heavily leans towards retargeting, showing ads to users already in the buying process. An internal A/B test that we did last year, indicated that Performance Max campaigns performed exceptionally well for a store with existing traffic, hinting at a retargeting bias. However, a newly named cloned store with no existing traffic had disappointing results, suggesting a high customer acquisition cost that could drive a business to losses if sustained. So, when Performance Max was utilized for a store with existing sales, it performed excellently. However, for a brand new store where it needed to significantly drive sales, it performed poorly.
These aspects reflect a lack of transparency and control in Performance Max, raising questions about its actual effectiveness and alignment with advertisers’ goals. Without detailed data and flexible options, advertisers might find themselves spending more without a clear understanding of the value derived, especially when compared to other platforms that offer better insight and customization.
The Alternative Path: Individual Campaigns
Rather than putting all eggs in the Performance Max basket, a more transparent approach would be to run separate campaigns for Google Shopping, Google Search, and Google Display. Although this route might sacrifice some automation and simplicity, it compensates by offering clear, actionable data. You can closely monitor and adjust campaigns, gaining a precise understanding of where every advertising dollar goes and how it performs. The insights gleaned from distinct campaigns empower advertisers to make informed decisions, optimize ad spend, and ultimately, achieve better and more effective returns.
In conclusion, while Performance Max offers a simplistic, hands-off approach, its lack of transparency and control may deter seasoned advertisers. Running individual campaigns on Google's platforms might demand more management effort but promises clearer insights, better data accuracy, and a potentially higher return on investment, which could prove crucial in the long run.