Google’s Performance Max Gets a Boost When Brands Reallocate Ad Spend from Twitter

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As major companies like General Motors, Pfizer, and General Mills have scaled back or pulled advertising from Twitter, the big question is where those ad dollars will go. 

While it’s still early days, two contenders have pulled into the lead. Investments in Google’s Performance Max and TikTok are rising fast, particularly among big-name brands. 

According to a new study by Fospha, a marketing measurement platform, Performance Max, TikTok, and Pinterest are the most interesting “alternative” channels for brands right now. When comparing return on ad spend (ROAS) across all channels, Performance Max outperformed paid search, paid shopping, and Meta. Fospha also found that Smart Shopping campaigns have largely been replaced by Performance Max over the last quarter.

“As a goal-based campaign type, Performance Max’s goal is to let advertisers increase conversions across Google’s range of advertising channels. This includes search, display, Discover, Maps, Gmail, and YouTube,” explains Diana Lee, co-founder and CEO of the global SaaS company, Constellation

The Performance Max platform ingests a feed of information with various elements of an ad unit to generate compliant creative assets at scale that can be stored or launched directly to Google Platforms. Brands can also identify key characteristics of users engaging with their ads and target others based on shared traits to ensure they are hitting those who are most likely to turn into a lead.

At Constellation, Lee and her team are now steering their Fortune 500 clients toward using Performance Max in combination with the company’s Dynamic Creative Application (DCA) to automatically pinpoint and remove low-performing content while simultaneously inserting new content in its place. According to Lee, Constellation’s automotive clients are now seeing a $1.60 cost per acquisition, compared to the paid search automotive industry benchmark of $43 per acquisition, along with a 92% lower cost per click (CPC).

“While [Performance Max] cannot replace social ads, it can significantly help to drive awareness, increase sales, identify high performing creative, and more at a much lower cost compared to Meta,” Lee says.

Constellation’s Dynamic Creative Automation is part of a proprietary end-to-end enterprise marketing solution. By integrating Google’s Performance Max, the platform can ingest a feed of information with various elements of an ad unit to generate thousands of compliant creative assets at scale, which can then be stored or launched directly to Google platforms. This allows brands to scale their creative production, automatically pinpoint and remove low-performing content, and identify key characteristics of users engaging with their ads based on shared traits.

“Major brands are using Performance Max as a way to run unique campaigns within Google Ads all at once, independently of each other,” Lee says. “Brands are able to determine exactly what copy and picture will get in front of users at a time. For example, you can input five videos, 30 pieces of copy, and 20 pieces of creative, and Performance Max will mix and match it based on user data.”

Ecommerce brands are already investing more in Performance Max campaigns. According to the digital marketing agency NetElixir, Performance Max campaigns accounted for 48% of paid search orders from Thanksgiving Day through Cyber Monday.

Lee says Performance Max has been especially beneficial for brands in highly regulated industries, such as automotive, pharmaceuticals, and banking. These industries have long relied on traditional advertising methods; however, they can’t produce it fast enough because of the regulatory red tape of creating an ad over and over again. 

“Performance Max is new, and many find it scary to run a campaign that they feel that they can’t control … there are some things you have no control over, but as long as you’re focusing on what you can by teaching Performance Max what you want it to do, it will go in the direction you give it,” Lee says. “The future of Google Ads is automated, but by understanding what you can control and what you can’t, you put your brand in a better place to take market share.”

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.