Google’s Demand Gen Upgrade

Google’s Demand Gen campaigns are changing, replacing Video Action Campaigns (VAC) and redefining how marketers reach and convert top-of-funnel audiences. For CMOs and expert marketers, these changes present both challenges and opportunities—particularly in audience targeting, ad format optimization, and performance measurement.

This guide provides high-level strategic insights and tactical recommendations to ensure your Demand Gen campaigns drive maximum ROI.

What’s New in Google Demand Gen?

Demand Gen campaigns allow advertisers to access Google’s premium inventory across:

• YouTube Shorts, YouTube In-Stream, YouTube In-Feed

• Google Discover feeds, Gmail, and Google Video partners

• Soon-to-be-integrated Google Display Network

Demand Gen supports three ad types for ecommerce:

• Image and product ads

• Video and product ads

• Product-only ads

And three ad types for lead generation:

• Single image ads

• Video ads

• Carousel image ads

Why it matters: Google is positioning Demand Gen as a direct competitor to Meta’s top-funnel ad solutions, encouraging advertisers to invest in demand creation rather than just capturing existing search intent.

Pro-Level Tactics: How to Succeed with Demand Gen

Bring it home with these strategies.

1. Optimize Remarketing for Conversions

Remarketing remains the foundation of Demand Gen campaigns. However, CMOs need to refine their approach to maximize performance:

• Start with a consolidated campaign: Target users who engaged in the last 30 days (extend to 90 days if your sales cycle is longer).

• Avoid mixing remarketing with prospecting: Keep them separate to maintain clean data and actionable insights.

• Segment based on engagement: Treat one-day cart abandoners differently from users who browsed but didn’t add to cart.

• Run Demand Gen alongside display remarketing: If your display remarketing performs well, adding Demand Gen expands reach without cannibalizing results.

2. Master Prospecting to Drive New Demand

Unlike remarketing, prospecting focuses on engaging new audiences that haven’t yet interacted with your brand. This is where real demand generation happens.

CMOs should:

• Leverage past high-performing audiences from other campaigns and apply them to Demand Gen.

• Analyze first-party data to identify audiences with high intent.

• Start broad, then refine: Allow Google’s AI to optimize before tightening audience parameters.

• Validate impact using multi-touch attribution (MTA): Use MTA modeling or incremental testing to measure how prospecting efforts influence conversions.

3. Audience Targeting: Precision Matters

Demand Gen offers advanced audience segmentation options. CMOs should prioritize targeting approaches that drive performance:

Best Audience Segments for Demand Gen

• Life Events: Target consumers going through major milestones.

• In-Market Audiences: Capture users actively searching for related products or services.

• Affinity Audiences: Engage users based on long-term interests and behaviors.

• Custom Audiences: Use search keywords, URLs, and app usage to refine targeting.

• Lookalike Audiences: Leverage first-party customer data to expand reach.

The Death of VAC: Transitioning to Demand Gen

By July 2025, all Video Action Campaigns (VACs) will be automatically upgraded to Demand Gen. To prepare for a smooth transition, CMOs should:

• Launch video-only Demand Gen campaigns now to maintain YouTube ad placement control.

• Use integrated video + image Demand Gen ads for maximum reach.

• Test Demand Gen’s performance ahead of the forced migration to avoid last-minute issues.

Key Success Factors for CMOs

Want to ensure this works? Remember these things.

1. Align Campaign Strategies with Business Goals

Define whether Demand Gen should serve lead generation, ecommerce sales, or brand awareness—then tailor your approach accordingly.

2. Utilize Product Feeds for Ecommerce Growth

Adding product feeds to Demand Gen campaigns increases conversions by 33% without raising CPA, per Google’s internal data.

3. Test Prospecting if Remarketing Underperforms

Surprisingly, some Demand Gen prospecting campaigns outperform remarketing, making them a powerful addition to your strategy.

4. Allow Time for AI Learning & Optimization

Unlike direct-response campaigns, Demand Gen requires a longer ramp-up period for performance consistency.

5. Experiment with New Video Formats

Google is introducing vertical 9:16 video ads optimized for YouTube Shorts. CMOs should test how these impact engagement.

Measuring Success: Metrics CMOs Should Track

Because Demand Gen isn’t solely focused on direct response, traditional conversion tracking isn’t enough. Use a blend of upper and lower funnel KPIs:

• Engagement Metrics: Video views, time spent on site, and interaction rates.

• Search & Shopping Uplift: Track branded search volume increases.

• Incrementality Testing: Use brand lift studies, geo blackouts, or post-purchase surveys.

Future Updates: What’s Coming Next?

Google is actively investing in Demand Gen, with new features on the horizon:

• Expanded placement controls for YouTube, Discover, and Gmail.

• Enhanced video ad formats for vertical and interactive ads.

• Retail-specific upgrades like omnichannel bidding improvements.

CMOs Must Lead Demand Gen Innovation

Despite its potential, many brands have yet to fully adopt Demand Gen—leaving a competitive gap for first-movers. CMOs and marketing leaders who embrace Demand Gen early will:

• Gain a first-mover advantage while competitors hesitate.

• Establish brand authority across Google’s top-funnel ecosystem.

• Drive long-term revenue growth through strategic audience engagement.

By mastering remarketing, prospecting, and audience segmentation, you can turn Demand Gen into a high-performing, scalable channel for growth.

Now is the time to dive in, experiment, and stay ahead.