Performance Max vs. Standard Shopping: Google revamps ad auction for holidays

In an unexpected move, Google is rolling out significant changes to how Performance Max and Standard Shopping campaigns compete in ad auctions, starting in October 2024. This update eliminates the automatic prioritization of Performance Max over Standard Shopping campaigns, altering the dynamics between these two campaign types during one of the most crucial sales periods of the year.

Key Changes:

1. Performance Max will no longer automatically trump Standard Shopping campaigns in auctions.
2. The highest Ad Rank will now determine which ad serves for overlapping campaigns.
3. This change brings these campaign types in line with other campaign types' auction behavior.

Mike Ryan, Head of Ecommerce Insights at Smarter Ecommerce, shared the update on social media, noting "Google is making such healthy choices lately that I'm actually getting worried."

Impact on Advertisers

The update offers more flexibility for advertisers but requires fine-tuning to maximize success in holiday campaigns. Google expects this change to have a "neutral or positive impact on performance at the account level."

Advertisers should prepare to adjust their budgets and targets as needed. Google recommends ensuring Performance Max campaigns follow fundamental best practices, including:

1. URL Expansion
2. Strong asset groups
3. Quality creatives and video

Performance Comparison

According to a study by TransUnion among Retail & Consumer Electronics advertisers in the US, Google Performance Max campaigns drove 17% higher Return on Ad Spend (ROAS) than AI-powered and automated performance campaigns on Paid Social in aggregate during the holiday peak period in Q4 2023.

Campaign Types Overview

Standard Shopping Campaigns

• Allow advertisers to promote online and in-store products
• Use product data from linked Merchant Center accounts
• Offer more control over bidding and campaign structure

Performance Max Campaigns

• Goal-based campaign type accessing all Google Ads inventory
• Uses Google AI for bidding, budget optimization, audiences, and creatives
• Complements keyword-based Search campaigns

Creating Standard Shopping Campaigns:

To create a Standard Shopping campaign, advertisers should:

1. Select "Shopping" as the campaign type in Google Ads
2. Choose the appropriate Merchant Center account and product feeds
3. Set campaign settings, including budget, bidding strategy, and targeting options
4. Create ad groups and set initial bids
5. Manage product groups for more specific bidding

Performance Max Campaigns with Merchant Center Feed:

To create a Performance Max campaign using products from Merchant Center:

1. Select "Performance Max" as the campaign type
2. Choose conversion goals and campaign settings
3. Set up asset groups with various creative elements (images, videos, text)
4. Add audience signals to guide Google AI optimization
5. Set budget and bidding preferences

Experimenting with Campaign Types:

Advertisers can set up experiments to compare Standard Shopping campaigns against Performance Max campaigns:

1. Access the Experiments section in Google Ads
2. Select "Test vs. Shopping campaign"
3. Choose an existing Standard Shopping campaign as the control
4. Create or select a Performance Max campaign as the treatment
5. Set traffic split and experiment duration
6. Monitor results to determine which campaign type performs better

Google AI in Performance Max:

Performance Max campaigns leverage Google's AI capabilities, including:

1. Smart Bidding for real-time bid optimization
2. Audience expansion to find new customer segments
3. Creative optimization across various ad formats
4. Automated asset creation, including text and video assets

As the holiday shopping season approaches, advertisers should closely monitor their campaign performance and be prepared to adapt their strategies based on these new auction dynamics. The changes offer opportunities for more nuanced campaign management and potentially improved performance across Google's advertising platforms.

Key Facts

• Update rollout: October 2024
• Campaign types affected: Performance Max and Standard Shopping
• Expected impact: Neutral to positive on account-level performance
• ROAS comparison: 17% higher for Performance Max vs. Paid Social (Q4 2023)
• Experiment duration: Typically set for 12 weeks