Demand Gen Campaigns: What They Are and Whether eCommerce Stores Should Use Them

Demand Gen replaced Discovery ads in 2023. Google positions it as a mid funnel campaign type that runs on YouTube, Gmail and Google Discover: places where people are browsing and open to new products rather than actively searching.

Most eCommerce store owners have seen it pop up in Google Ads recommendations without knowing whether to act. The short version: Demand Gen is a worthwhile addition to a well funded eCommerce account, but it is not where most stores should begin, and it does not do the same job as PMax.

What Demand Gen Is

Demand Gen is a visual campaign type that runs on:

• YouTube: in-stream, Shorts and in-feed ads across the YouTube app and website
• Google Discover: the interest-based content feed on Android and in the Google app
• Gmail: sponsored promotions in the Promotions and Social tabs

It does not run on Google Search or Shopping. It sits entirely in the upper and mid funnel, reaching people while they browse content rather than when they search for products.

The key difference from standard Display advertising is that Demand Gen uses Google’s intent and interest signals to find people more likely to be receptive to discovering new products. It is designed to create demand rather than capture it, which is where the name comes from.

What Changed From Discovery Ads

Discovery ads (retired in 2023) ran on the same placements and worked in a similar way. Demand Gen keeps those placements and adds:

Product feeds. Demand Gen can connect to your Merchant Center feed, so Google can show product-level ads with titles and prices, much like Shopping ads but on YouTube, Discover and Gmail instead of Search.

More creative formats. It supports more video formats than Discovery did, including YouTube Shorts ads.

Better audience controls. Targeting options are improved, including more effective use of Customer Match lists and similar audiences than Discovery allowed.

Lookalike audiences. A built-in audience expansion feature (similar to Meta’s Lookalike audiences) builds new audiences from your existing converters and site visitors.

How Demand Gen Differs From PMax

This is the comparison to understand before you add Demand Gen.

PMax is a full funnel campaign covering all Google inventory: Search, Shopping, Display, YouTube, Gmail and Discover. Its main goal is conversions, and it moves budget between inventory types automatically.

Demand Gen runs only on YouTube, Discover and Gmail, with no Search or Shopping. It optimises for upper and mid funnel goals: clicks, landing page views or conversions (although its conversion optimisation is weaker than PMax’s, because it lacks Search and Shopping to anchor it).

If you already run PMax, it is already bidding on YouTube and Discover inventory as part of its cross-channel allocation. A separate Demand Gen campaign aimed at the same audiences may end up competing with your own PMax for the same inventory.

So be deliberate about overlap. The usual approach is to use Demand Gen for specific upper funnel goals (prospecting new audiences, product launches, building the brand) where you want dedicated budget and creative control that PMax’s automatic allocation would not guarantee.

When Demand Gen Makes Sense for eCommerce

Your products are visual and you have strong creative. Demand Gen is a visual format. Products that photograph well, tell a strong lifestyle story or work in short video (fashion, homeware, beauty, food) will do better than commodity products without compelling visuals.

PMax is already spending its full budget. If PMax is hitting its daily cap while meeting your ROAS target, there may be extra reach on YouTube and Discover that Demand Gen can pick up. If PMax is not spending its full budget, Demand Gen is premature.

You want explicit control over upper funnel spend. PMax splits budget between Search, Shopping and upper funnel placements based on its conversion model. If you need a guaranteed upper funnel presence, for example when launching a product line or entering a new market, Demand Gen gives you direct budget control on those placements that PMax does not.

You can produce good creative consistently. Demand Gen rewards creative quality more than most campaign types, because it competes for attention while people browse rather than search. If you can make compelling video and high quality image sets, it is the right vehicle. If your creative is weak, the format will underperform however good the audience is.

When Demand Gen Is the Wrong Move

PMax is not fully optimised yet. If you are still working on PMax setup, asset quality, brand exclusions and ROAS targets, adding Demand Gen brings another variable before your core campaign is stable. Sort out PMax first.

Your monthly ad budget is under £3,000 to £5,000. Demand Gen needs meaningful budget to gather enough impressions to optimise. A £300 a month allocation produces too few impressions for the campaign to learn. Smaller budgets belong in campaigns closer to purchase intent: Search and Shopping.

You have no video. Demand Gen can run image ads, but its best placements are video-first (YouTube in-stream and Shorts). Without video you miss the highest reach placements the format offers.

You only care about direct ROAS. Measured directly, Demand Gen’s ROAS will almost always look worse than PMax or Search. It works higher up the funnel, influencing people earlier, and those sales often show up in other campaigns at the point of purchase. Judging it only on last-click ROAS misreads its role. If you are not willing to look at view-through or assisted conversions alongside direct ROAS, it will look like a poor performer and get cut too early.

Setting Up a Demand Gen Campaign

Conversion goal: optimise for Conversions or Conversion Value using your purchase conversion action, so the signal matches your other campaigns.

Audience strategy: work in tiers.

Warm audiences first: your Customer Match buyer list, site visitors from the last 90 days, basket abandoners and product page viewers. They already know your brand and are the most likely to convert from a mid funnel ad.

Lookalike expansion: turn on Google’s audience expansion based on those warm audiences to find people similar to your converters.

Interest and in-market targeting: add in-market audiences relevant to your category for prospecting.

Creative approach:

For a product catalogue, connect your Merchant Center feed so Demand Gen can show product carousels on Discover and Gmail, similar to Shopping ads but in a browsing context.

For brand building, use lifestyle imagery and short video that show what your brand stands for, not only what it sells. People on Discover and YouTube are not in buying mode. Ads that feel like ads get skipped. Ads that feel worth watching get engagement.

Budget: start with 10 to 15% of your PMax budget as a test and run it for at least four weeks before judging. Demand Gen needs time to get through learning.

Reporting and Attribution

By default, Demand Gen conversions in Google Ads include view-through conversions: people who saw a Demand Gen ad without clicking and later bought through another channel. Google credits those sales to Demand Gen through view-through attribution.

That is legitimate but easy to misread. If Demand Gen reports 50 conversions from only 8 clicks, view-through attribution explains it. Whether to count view-through conversions depends on how much weight you give to upper funnel influence.

For a conservative view, leave view-through conversions out of Demand Gen ROAS and judge only click-based conversions. The number will look worse, but it is a more defensible measure of direct impact.

The full picture comes from assisted conversion data in GA4 or a multi-touch attribution view: how often does a Demand Gen touchpoint appear in the path to purchase, even when the last click came from another channel?

That analysis tells you whether Demand Gen is adding to total revenue, which is the question to answer before you decide to scale it or cut it.