Google’s Demand Gen upgrade: Key changes and success strategies

Staying ahead in Google Ads means adapting fast. 

With Video Action Campaigns (VAC) being phased out and absorbed into Demand Gen, you have a new opportunity to drive growth. 

Fortunately, Google is rolling out powerful new tools to help maximize performance. 

This article breaks down what’s changing and how to optimize your Demand Gen campaigns for success.

A snapshot of Google’s Demand Gen campaigns

Demand Gen campaigns (formerly Discovery campaigns) allow users to buy Google’s ad inventory across YouTube Shorts, YouTube In-Stream, YouTube In-Feed, Discovery feeds, Gmail, and Google Video partners.

These campaigns support three ad types for ecommerce:

• Image and product ads.
• Video and product ads.
• Products-only ads.

For lead generation, they offer three ad formats:

• Single image ads.
• Video ads.
• Carousel image ads.

Google developed Demand Gen campaigns to compete with Meta, aiming to drive top-funnel investment while generating new demand and increasing brand awareness. 

Google is also expected to add Display Network inventory soon. 

Dig deeper: New in Google Demand Gen Ads: Automatically create short videos

Getting started with Demand Gen

Google continues to launch new tools for Demand Gen campaigns, giving you more opportunities to maximize results. 

Let’s explore two key strategies to help you succeed.

Remarketing

Remarketing is an essential part of any Demand Gen strategy. 

Also known as retargeting, it allows you to show ads to people who have already interacted with your website, encouraging them to take a desired action – such as making a purchase. 

Here’s how to optimize your remarketing efforts:

Start consolidated

Most budgets start small, so it’s best to begin with a single remarketing campaign that targets users who engaged with your site within the last 30 days – up to a maximum of 90 days if your sales cycle is longer.

Avoid combining remarketing and prospecting

One common mistake is blending remarketing and prospecting into a single campaign. 

These serve different purposes and perform differently. Mixing them will only obscure your data and make decision-making harder.

Segment audiences based on volume and performance

As your budget grows, segmenting audiences by shorter or longer engagement windows can help refine targeting and improve performance – if volume permits. 

A one-day cart abandoner doesn’t need the same messaging as a 90-day one.

Use Demand Gen alongside display remarketing 

If you’re already running standard display remarketing and seeing success, expanding your reach with Demand Gen can make your campaigns even more effective.

Prospecting

Prospecting differs from remarketing because you’re reaching out to potential customers – people who haven’t interacted with your brand yet but are likely to be interested. 

This is where the magic happens. With prospecting, you’re engaging cold audiences and truly generating demand.

While prospecting may not deliver immediate returns, it plays a crucial role in the customer journey. Here’s how to make it work for you: 

Leverage past audience successes

If previous audience-based prospecting campaigns performed well, they’re likely to work within Demand Gen’s ad inventory too. Apply past learnings to your current campaigns.

Analyze data from other campaigns

Review data from your other campaigns to identify audiences with high search intent or conversion rates. Use these insights to refine your Demand Gen targeting.

Start broad, then refine

Begin with broad targeting and gradually narrow your parameters based on performance. This ensures enough volume for the algorithm to learn and optimize efficiently.

Validate your investment

Use multi-touch attribution (MTA) modeling or incremental testing to analyze how each customer interaction contributes to conversions. This data will help justify prospecting investments.

Identifying your audiences

No matter what type of campaign you’re running, audience selection is key. You can segment audiences in several ways:

Life events

• Target consumers experiencing major milestones.
• Example: A pet brand targeting “New Pet → Recently Added Dog to Household.”

In-market audiences

• Reach users actively searching for related products or services.
• Example: A hair care brand targeting users searching for “shampoos and conditioners.”

Affinity audiences

• Engage users based on long-term interests and behaviors.
• Example: A fitness apparel company targeting “health and fitness buffs.”

Custom audiences

• Use specific keywords, URLs, and app usage to create unique audience segments.

Lookalike audiences

• Identify new potential customers by leveraging first-party customer data.
• Example: Using past purchasers or YouTube subscribers as seed lists.

The end of VACs: Shifting to Demand Gen

By July 2025, Google will automatically upgrade all VACs to Demand Gen campaigns. 

To ensure a smooth transition, consider these strategies:

• Create video-only Demand Gen campaigns: If you want to maintain control over YouTube ad placements, set up dedicated video-only Demand Gen campaigns.
• Use integrated video and image ads: For brands less concerned with YouTube-specific performance, a mixed-media approach (video + image ads) will maximize reach.

Key tactics for winning Demand Gen campaigns

Once you’ve committed to a Demand Gen campaign, setting it up for success is key. Follow these best practices to maximize performance:

Align strategies with business goals

• Whether your focus is ecommerce or lead generation, tailor your campaigns to support your primary objectives.

Use product feeds for ecommerce

• Enable dynamic Demand Gen campaigns to showcase product images alongside traditional ad formats. 
• Advertisers who add product feeds to Demand Gen campaigns typically see a 33% increase in conversions without a rise in cost per action (CPA), according to Google.

Test prospecting if remarketing underperforms 

• In some cases, prospecting campaigns outperform remarketing efforts. It seems counterintuitive, but that’s the nature of Demand Gen.

Allow time for campaign ramp-up

• Unlike direct response campaigns, Demand Gen needs longer optimization periods to deliver consistent performance.

Experiment with video ads 

• Leverage Google’s latest video ad format selection tools to boost visibility across platforms and formats.

Measuring success

To determine if your Demand Gen investment is paying off, you’ll need a different approach to measurement.

Since these campaigns don’t always drive direct response outcomes like shopping or search campaigns, consider these methods:

• Track upper-funnel metrics such as engagement rates, video views, and audience interactions.
• If targeting specific audiences, measure their uplift in search and shopping performance.
• Test for incrementality using brand lift studies, geo blackouts, or post-purchase surveys.

What’s next for Demand Gen?

As mentioned earlier, Google moves fast when rolling out new tools. 

Right now, they’re investing heavily in Demand Gen, so expect more updates from Google reps. 

Here’s what’s on the horizon:

• Expanded channel controls: Allowing advertisers to choose where ads appear across YouTube, Discover, and Gmail.
• New video format options: Vertical 9:16 video ads designed for YouTube Shorts.
• Enhanced retail features: Improved product feed integration and omnichannel bidding capabilities.

Dive into Demand Gen and stay ahead

Demand Gen campaigns are evolving rapidly, offering new ways to drive revenue. Yet, adoption among advertisers remains low. 

That gives you an edge. By getting in early, you can outpace competitors, build brand awareness, and engage core audiences while driving long-term growth.

While Demand Gen requires a different approach than most Google Ads campaigns, once you master it, the potential upside is huge.