The New Discovery Ads Upgrade: What Demand Gen Means For Your Business

The New Discovery Ads Upgrade: What Demand Gen Means For Your Business

a graphic showing five phones with ads

Google has been going full throttle on improving its ad services for a while now. We covered their Performance Max upgrade late in 2022, and the recent Discovery Ads upgrade is just as big of an overhaul (if not bigger!). Announced during Google Marketing Live 2023, Demand Gen campaigns are a complete game changer for brands that want to improve their impressions and clicks in 2024. 

What About Discovery?

These ads gave advertisers the power to accurately target the most relevant audiences on their Google Discover feed. This update was incredibly popular due to one simple principle: it allowed advertisers to get their ads out before their audience had even searched for anything. With their recent Live, Google announced that Demand Gen will completely replace Discovery Ads. You don’t need to worry if you’ve already been using these ads. Your campaigns will automatically be upgraded to Demand Gen by March 2024.

What are Demand Gen Campaigns?

Demand Gen will allow advertisers to generate demand on Google’s most immersive platforms, including YouTube, Gmail, and Discover. Demand Gen’s integration with Google’s visual surfaces is comprehensive, covering Shorts, live streams, and the YouTube feed. 

Advertisers using Discovery Ads to craft powerful and immersive campaigns for YouTube and Gmail might wonder what prompted this new upgrade and whether it’s just a name change. Let’s take a look at what’s different.

  • More Video Ad Options: Discovery advertisers were limited to two options when creating campaigns: product and custom images. Demand Gen expands on this by allowing you to add up to 5 custom videos for your advertisements. Remember that these ads will run across various platforms like Gmail and YouTube, so you’ll need to upload your assets in multiple aspect ratios to run natively for your audience.

    Video ads are a complete game changer, considering how people use platforms like YouTube. Brands can achieve higher engagement rates by capitalizing on these different ad formats, including non-skippable and skippable ads and highly effective bumper ads.
  • All-New Tools: Discovery Ads and Demand Gen campaigns both allow advertisers to preview what their visual assets could look like in an ad. Demand Gen expands on this essential feature by introducing a new tool called Demand Gen experiments.

    Experiments are an excellent way to find out how a new campaign might perform compared to older ones, and they show advertisers exactly how campaign changes can affect their results. Setting one up is easy- just specify how long you’d like your planned campaign to run and what kind of budget you’re working with. Most importantly, Demand Gen experiments let you mix and match different video and image assets for your campaigns.

    The tool even includes an adjustable level of confidence that can be tweaked according to your needs. Those looking to minimize risk can set this option to 90%, while the average user might leave it at the default 70%.

    Google will run these experiments across all of their inventories (Discover, YouTube, etc.) for you and provide a detailed report afterward to help you figure out the best way forward. If you’re coming from Discovery Ads, you’ll love these detailed A/B testing features.
  • Improved Targeting: Goodbye Similar Audiences, hello lookalike customer segments. Demand Gen campaigns are introducing this powerful new audience targeting feature where marketers can provide Google Ads with first-party seed data. Their AI-powered algorithm will then process this data to find other people who might be part of your target audience. You might recognize this feature if you’ve used Shopify Audiences before.

Lookalike segments contain users that are already highly likely to be potential customers. However, you can further customize these segments if needed. Demand Gen offers you three options here: Narrow, Balanced, and Broad Targeting. Narrow will prioritize the select few users that most closely match the seed data, while Broad segmentation will widen the audience pool to include more users.

Discovery ads users will be familiar with the other two improved audience targeting features:

  • Affinity audiences: These are user groups that all share an interest in a common topic – anything from a hobby to a music genre. This targeting feature is excellent for businesses that want to create a Demand Gen campaign targeting people who are enthusiastic about their niche. For example, a small business selling trombones could create an affinity group of “Jazz Fans.”
  • In-market audiences: This targeting method seeks out groups of people already looking to purchase a particular item or service. Brands can use this feature to seek out customers in the final stages of the customer journey and market to them with appealing personalized offers.
  • Increased Reach: Google’s research shows that about 87% of consumers will consult YouTube before making a final purchase. YouTube’s influence over customer behavior is undeniable, and Demand Gen is expanding on what Discovery Ads started.
an ad on a YouTube short

Demand Gen campaigns extend your ads across every facet of YouTube, from In-Stream advertisements to YouTube shorts. Now, you can market on one of the world’s most popular video platforms through videos – neat! Google will integrate your best-performing video assets into YouTube to optimize conversions. Note that having access to In-Stream and YouTube Shorts means that brands can use long and short-form content to advertise.

  • New Bidding Options: Demand Gen brings back the smart bidding options in Discovery Ads and a new strategy to ‘maximize clicks.’ This strategy will prioritize user engagement when pushing your image or video ads. The ‘maximize clicks’ option is ideal for businesses wanting to drive more website traffic or those looking to boost in-store sales.

    Remember that popular options like conversion-based bidding and value-based bidding are still present here.
  • Better Reports: Increasing traffic and conversions is always great, but brands need an effective way of tracking and measuring their results to create a consistent future strategy. Demand Gen campaign’s improved reporting features are up to the task here, improving older reporting tools like Brand Lift and Conversion Lift reports.
    • Brand Lift: This free tool looks at metrics like ad recall and brand awareness to tell you exactly how your video ads perform at a glance. Users coming from Discovery Ads will benefit immensely from a video-focused reporting tool that works with a massive sample size to inform about brand insights.
    • Conversion Lift: A tool for accurately measuring the actions taken by your audience after viewing your video ads, including conversions and site visits. Conversion Lift is an invaluable resource that can help you finetune your marketing campaigns on the go.

Making The Most of Demand Gen Campaigns

A powerful new upgrade calls for a bold new strategy. Use these best practices to pull ahead of the competition.

  • Think Ahead: All Discovery Ads campaigns will be migrated by March 2024. Take this time to plan ahead and brainstorm about how your brand can make the most of these new features. Remember that Demand Gen does not allow you to opt out of placements. So, while you can exclude individual placement URLs, you cannot opt out of advertising, for example, on Gmail. You’ll want to get your image and video assets ready well in advance for these channels so that your ads can make a great first impression.
  • Metrics Boost: You should expect your website impressions and clicks to increase significantly after the migration as Google shows your ads to all types of inventories (Discover, Gmail, YouTube). We’ve seen this happen in the past with the shift to Performance Max campaigns. This increase could be attributed to Google selling off its unsold and unpopular inventories – particularly in Discover.

    Stay prepared for this boost, and be careful about measuring your impressions before and after the move to Demand Gen.
a Google Discovery ad
  • Audience Segmentation: One of the biggest reasons for the excitement around Demand Gen campaigns is the lookalike audience segments. If you’re new to Discovery Ads or online ads in general, you might not know that your seed audience to create these lookalike segments needs to contain at least 1,000 unique users sourced from first-party data. Compiling this seed list can take some time if you’re new to the whole process, so you’ll want to start early to ensure you can make the most of lookalike segments. Some businesses might need to increase page traffic first to reach that number.
  • Prepare a Budget: Discovery Ads and its successor are meant to allow even smaller businesses with minuscule budgets to flourish. While it’s certainly possible for your ads to garner an audience with a small budget, it’s not ideal. If you’re using smart bidding, ensure you set your budget to at least ten times your target CPA. Doing this will allow your new Demand Gen campaigns to grow and find your desired audience.

The Upgrade You Deserve

Demand Gen looks like one of the most promising ad updates in years, from more intelligent audience targeting to better reporting. Ensure you have a strategy to make the most of these new features and prepare for unprecedented growth.

If you’d like to learn more about Demand Gen or how to make the most of it, contact Coalition Technologies for a free strategy review! We’ve helped thousands of businesses fine-tune their marketing campaigns using Google’s most powerful features, and we’d love to help you too.

Related Posts That May Help