Ep 476: How to Leverage Google PMAX for Demand Capture and Growth | AKNF

Summary

Episode Summary: DTC Podcast Ep 476 - How to Leverage Google PMAX for Demand Capture and Growth | AKNF

Release Date: January 24, 2025
Host: Eric Dick
Guest: Dougie from Pilothouse's Google Team
Podcast: DTC Podcast by DTC Newsletter and Podcast

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Introduction to Performance Max (PMAX) and the October Update

In Episode 476, Eric Dick welcomes Dougie to discuss Google's Performance Max (PMAX) campaigns, focusing particularly on a significant update rolled out in October 2024. This update alters how PMAX interacts with Shopping campaigns, impacting campaign prioritization and structure.

Key Points:

• PMAX is Google's automated campaign type designed to operate across multiple Google channels, including YouTube, Display, and Search.
• Initially, PMAX had a "black box" approach, where PMAX campaigns would always take precedence over Shopping campaigns for identical products.
• The October update shifts prioritization from PMAX always taking precedence to a more nuanced ad rank-based system.

Notable Quote:

Dougie [02:16]: "We're pretty excited they snuck that little update in end of October right before the promo periods like Black Friday, Cyber Monday."

Impacts on Campaign Structure

The October update allows advertisers more flexibility in structuring their campaigns by no longer having PMAX automatically overshadow Shopping campaigns. This change facilitates a hybrid approach, enabling the simultaneous use of both PMAX and Shopping campaigns to target different segments of the audience.

Key Points:

• Previously, PMAX campaigns would automatically prioritize over Shopping campaigns for the same product.
• With the update, prioritization is now based on ad rank, considering factors like bids, budgets, and ad optimization.
• This opens opportunities for hybrid campaign structures, where approximately 90% of Pilothouse's clients now use both PMAX and Shopping campaigns concurrently.

Notable Quote:

Dougie [03:35]: "With this update that came towards the end of October... it really opens up the door to have more hybrid structures."

Targeting New vs. Returning Customers

Dougie elaborates on how the revised PMAX allows for more strategic targeting of different customer segments. By leveraging separate Shopping and PMAX campaigns, advertisers can distinguish between warmer, brand-aware traffic and colder, high-intent traffic.

Key Points:

• PMAX is geared towards capturing warmer traffic, often those who have interacted with the brand before.
• Shopping campaigns can now target less brand-aware, yet high-intent shoppers effectively.
• This segmentation enhances demand capture by aligning campaign types with customer intent levels.

Notable Quote:

Dougie [07:37]: "So they're not necessarily within PMAX like two different campaigns... we can use Shopping to target more of those prospecting type, less brand consideration type users as well."

Differentiating New Customers and Returning Customers

A critical aspect of effective PMAX utilization is distinguishing between new and returning customers. Dougie emphasizes the importance of providing accurate first-party data to Google to enable PMAX to serve the appropriate audience segments.

Key Points:

• PMAX relies on first-party data to identify and differentiate new customers from returning ones.
• Accurate audience lists, managed through integrations like Klaviyo or direct imports from Shopify, are essential for PMAX optimization.
• Without proper data, PMAX may inaccurately attribute conversions, undermining campaign effectiveness.

Notable Quote:

Dougie [10:46]: "Generally it relies on your ability to input that accurate first-party data."

PMAX Performance: Initial Success vs. Long-Term Outcomes

The discussion shifts to the performance trajectory of PMAX campaigns. Dougie highlights that while PMAX can deliver strong initial results by capturing easy conversions, maintaining long-term performance requires strategic optimization and segmentation.

Key Points:

• Initial campaign launches should be minimally interacted with to allow PMAX to optimize based on provided audience signals and product targeting.
• Over time, campaigns benefit from feed management and segmentation strategies, adjusting budgets and targeting for optimal performance.
• Future enhancements, such as A/B testing capabilities for creative elements within PMAX, are anticipated to provide additional optimization levers.

Notable Quote:

Dougie [12:20]: "We are trying to leave our Campaigns without too much interaction for those first couple weeks."

Attribution Challenges and Solutions

Accurate attribution remains a significant challenge with PMAX due to its holistic approach, which can lead to double-counting or misattribution of conversions. Dougie outlines Pilothouse's strategies to mitigate these issues.

Key Points:

• Platform attribution models, including Google's data-driven attribution, often see conversions through their ecosystem, potentially ignoring external factors like organic or influencer-driven traffic.
• Pilothouse leverages GA4, Northbeam, and Triple Whale to triangulate data and ensure more accurate attribution across multiple touchpoints.
• The agency emphasizes not relying solely on platform attribution but integrating third-party tools to validate and refine conversion data.

Notable Quote:

Dougie [15:01]: "We are often checking back in with GA4 to get a better sense of the customer journey."

Brief Discussion on Google Ads Security

In a brief tangential discussion, Eric brings up a recent issue regarding criminal activities targeting Google Ads accounts. Dougie acknowledges the concern but notes that he hasn't encountered such incidents within his agency.

Key Points:

• A reported scam involves fraudulent ads mimicking Google Ads to steal user information.
• Dougie advises vigilance and encourages stakeholders to stay informed about such security threats.

Notable Quote:

Dougie [18:45]: "Oh, I'll have to send me that link. I haven't... but maybe we'll have to keep a keen eye out."

Wrap-Up and Future Topics

The episode concludes with light-hearted banter about hockey, a nod to future podcast topics like demand capture on YouTube ads, and an invitation for listeners to connect with Pilothouse for their Google advertising needs.

Key Points:

• Dougie mentions upcoming opportunities to experiment with YouTube and other Google platform features.
• The team at Pilothouse remains committed to evolving their strategies in response to platform changes and client needs.
• Listeners are encouraged to subscribe to the DTC newsletter and explore Pilothouse's services for further insights.

Notable Quote:

Eric Dick [19:47]: "I'm excited maybe in a future episode to talk a little bit about demand capture on YouTube ads."

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Conclusion

Episode 476 of the DTC Podcast provides a comprehensive exploration of Google's Performance Max campaigns, particularly focusing on the significant October 2024 update. By leveraging a hybrid campaign structure and ensuring accurate data input, advertisers can enhance their demand capture strategies and better differentiate between new and returning customers. Additionally, the discussion on attribution underscores the importance of integrating multiple analytics tools to maintain campaign integrity. The episode offers valuable insights for DTC brands looking to optimize their Google advertising efforts amidst evolving platform dynamics.

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For more detailed insights and step-by-step tactical guidance, subscribe to the DTC newsletter at directtoconsumer.co and stay tuned for upcoming episodes of the DTC Podcast.

Transcript

[Eric Dick]

And I'm here with Dougie to talk a little bit about pmax and a sneaky update that happened in October and what it means for our campaigns and campaign structure going forward.

[Dougie]

How things worked Previously, Google was really trying to push pmax when it came into beta. It was certainly more of a black box. If you ran a shopping campaign with the same product as a PMAX campaign, the pmax campaign would always take priority. Now they've walked that back and it's.

[Eric Dick]

Actually based on what does this mean for our campaigns?

[Dougie]

You are going to be able through shopping to approach people who are typically newer to the brand.

[Eric Dick]

How good is it at differentiating net new customers and returning customers?

[Dougie]

Good question. So I would say.

[Eric Dick]

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[Dougie]

I'm doing well, Eric. Thanks for having me back again. Yeah, we're pretty excited they snuck that little update in end of October right before the promo periods like Black Friday, Cyber Monday. So I know we were focused more on the seasonality, but yeah, I think it's worth calling to people's attention what this change was and how it potentially impacts the management of performance Max versus shopping campaign campaigns going forward as well.

[Eric Dick]

Okay, just for those in our audience, I'm sure everyone in our audience knows what PMAX is Performance Max on Google. But just give us the briefest overview of pmax in case someone doesn't.

[Dougie]

Yeah. So pmax is Google's more automated campaign type. If you're more of a meta focused listener, it's somewhat similar to Advantage plus campaigns, but generally Performance Max has the ability to serve on all of Google's different channel types. Campaign types such as YouTube, Display, Demand Gen search, depending on what assets you give it. Shopping is included in that as well. Primarily for demand capture. We're pushing it towards search and shopping and less so those other avenues. But yeah, that's the quick and dirty on pmax.

[Eric Dick]

And in previous episodes we've talked about making sure that you structure your PMAX campaigns correctly so that they're not just overbidding on brand and really lower funnel keywords. That's something we talked about, right?

[Dougie]

Yeah, absolutely. So there's now more opportunity to play around with the structure. With this update that came towards the end of October and the update was essentially how things worked previously. Google was really trying to push PMAX when it came into beta in 2023, 2022, whenever it was, it was certainly more of a black box, more automated. There weren't a lot of levers for advertisers to pull to change how it targeted. And one of those kind of initial, I guess, prioritizations within Performance Max was that if you ran a shopping campaign with the same product as a pmax campaign, the pmax campaign would always take priority. And now they've walked that back and it's actually based on ad rank, which is a multitude of factors like your bids, your budgets, how optimized your ads are, that kind of thing, which really opens up the door to have more hybrid structures. And even in the agency Currently, I think 90% of our clients are operating on a hybrid structure, running some degree of shopping and pmax campaigns, as opposed to singularly one or the other. Very cool.

[Eric Dick]

So what does this mean for our campaigns?

[Dougie]

Yeah, so the idea behind some of the segmentation is generally pmax is going to hit warmer traffic and you've got audience signals. You can provide it to kind of push it in that direction as well. But pmax came as an evolution of smart shopping campaigns which were then deprecated in favor of Performance Max. And they typically were taking more of those warm signals from people who have interacted with the brand or what have you. And so what? Standard Shopping. Having an identical product in Standard Shopping compared to Performance Max allows you to potentially direct that more towards people who are less brand. Aware. And we're talking about demand capture here across the board, right? Typically these shopping placements, they're search based. People are either searching for exactly what you offer or something similar. So we're not necessarily talking the top top of funnel here, but you are going to be able through shopping to approach people who are typically newer to the brand. And so by having the ability to target the warmer traffic and performance max versus the potentially colder traffic, but still high intent traffic through shopping, it allows you to have that kind of higher return come through performance max while using shopping as a bit more of an acquisition type campaign. Even though again, we are still talking about demand capture across both, just one is slightly less warm and less brand aware than the other.

[Eric Dick]

Typically, shopping is one of those channels where I don't necessarily have to be brand aware in order to make a. I'm just thinking of my own. When I'm searching for something, I'll go on shopping and I don't have to be brand aware to make a purchase there. I can find the perfect silhouette for the boot or the jean or whatever I'm looking for and be like, okay, I'll buy that.

[Dougie]

Yeah, 100%. Because you're served with the most pertinent information and it's search based. You're searching for, I don't know, golden zip up hoodie. You know exactly what you're after and then you're given a bunch of golden zip up hoodies that have their price, the brand, the information. So you don't have quite the brand story behind it. So that's where maybe a bit of that awareness and consideration certainly impacts your demand capture campaigns. If you're running a strong consideration campaign through Meta or through YouTube or what have you, you would expect to get a stronger halo effect return from your demand capture. Because when you're comparing, okay, this golden hoodie I've heard all these great things about, I've been served ads a couple times. I actually know who this is compared to Joe Blow, who's got no. You've got no information on and you're just kind of going purely based off of price and the aesthetic of the very limited listing that's available. So yeah, not to completely discount the impact that brand consideration has on these demand capture efforts as well.

[Eric Dick]

So practically are these two separate pmax campaigns, one that's more upper funnel for shopping and then one that's more lower funnel.

[Dougie]

So they're not necessarily within pmax like two different campaigns. The shopping versus PMAX would be certainly. But typically we're setting up and we've played around with, okay, trying to direct shopping campaigns towards like branded traffic as an example versus pmax campaigns trying to go towards branded traffic. And we're actually starting to shift things a little bit for some brands. We are starting to see, okay, let's maintain pmax as a branded warmer traffic channel. And although we don't have quite the same control over it serving towards those branded terms, we know that it will still do it quite effectively and we can use shopping to target more of those prospecting type, less brand consideration type users as well. So they are separate campaigns. But with this change to how pmax is prioritized, it's been rolled out across all types of pmax campaigns. It's not like we're having one pmax campaign that is prioritizing in a different way than another.

[Eric Dick]

One of the themes we're talking about on the podcast in 2025 a lot these days is finding ways to quantify the budget that you're putting in top of funnel in order to generate awareness. And I know that Google is generally a demand capture platform as we were discussing today. Do you have it like anecdotally like clients that have that have spent a lot in other ways top of funnel, maybe they've had a viral video, they've done a big TV campaign or something like that. Are you aware when clients have those also going on and do you see a big boost the intent traffic that you're seeing on Google?

[Dougie]

Yeah, so we've seen that. Certainly I think the most stark examples have probably been from TV campaigns. YouTube and its impact on demand capture overall typically has a longer window. You're typically having to hit them with a few different ads as is the case for any kind of top funnel awareness brand consideration play. But we certainly have seen some pretty stark impacts on demand capture from people who have put and the key here being enough budget behind those top of funnel efforts. You're not going to make a difference 100 bucks a day on top of funnel, YouTube or some TV campaigns. You're not really going to see those stark increases on your demand capture performance if you're not getting enough eyeballs, because a lot of the eyeballs you hit are going to take time to consider it. Some of them might not even care even if they fall perfectly into your target demo as well. Right. So yeah, certainly have seen pretty stark reactions from TV spend and then kind of what we look at is the halo effect on our demand capture campaigns and then also tracking branded search traffic over time and seeing how that changes and typically there's a bit of a tail on it compared to when that initial brand awareness campaign is launched.

[Eric Dick]

This is kind of all around what we're talking about here. But how does pmax differentiate? How good is it at differentiating net new customers and returning customers?

[Dougie]

Good question. So I would say generally it relies on what data you provide Google. You have to provide Google with first party data to accurately define, hey, here is my existing customer list. Anything outside of this list should be a new customer. That being said, I guess I have some pessimism around the accuracy of Google's ability to completely 100% determine, okay, this person was absolutely not in this list versus they were definitely in this list. But I have seen through auditing a lot of clients or potential clients that they aren't properly defining their audience list to Google. And so you can't really fault the campaign if it doesn't properly attribute a new conversion versus a returning conversion if you aren't providing it the proper data. So what I recommend is Klaviyo integration, direct imports from Shopify, whatever you can do to upload your customer match list into Google and to determine, hey, this is our existing customer profile. That will go a long way to allow PMAX to serve if you are trying to optimize it towards new customers. But generally, yeah, it relies on your ability to input that accurate first party data.

[Eric Dick]

And then what are we seeing in terms of like initial success on pmax campaigns versus long term performance? My understanding, and as we've discussed is a lot of times it will when you launch, when it's doing everything it can to, you know, unless you give it a lot of guardrails to get as many easy conversions as possible. But that can lead to kind of hollowing out long term performance. How are you finding the campaigns performing over time?

[Dougie]

Yeah, good question. So typically when we launch a new campaign and this probably applies a bit more to pmax than any other campaign type, but it does apply broadly across Google is well we should have done the research beforehand to know, okay, this is how and who we want to target and what we want to show these people within performance max. Like hey, we're launching because we only want to serve on search and shopping. We're not going to input any creative into this PMAX campaign. Quick tidbit on that beta coming down the line for experimentation, allowing a B testing for creative on performance max with and without which will be interesting because we haven't had that ability. But to your main question, we are trying to leave our Campaigns without too much interaction for those first couple weeks. And if you've kind of strategically structured your campaign around, okay, we've got good audience signals, good search signals, we're targeting the right products, the right searches to the right people, then typically you're able to slowly segment and consolidate kind of push and pull over time, either pulling certain products out and saying, okay, we actually want to target this more specifically and go after it with more budget and less broadly by having kind of too many products under one singular campaign. And over time, typically the optimization is around feed management for these shopping placements and also for different segmentation strategies for different product subsets as well. I'm excited for the opportunity to do some A B split testing on performance max, because that question of okay, if we give it creative and start serving on display and Demand gen and YouTube, are we just seeing kind of seasonal dips in performance or seasonal improvements in performance, or is it actually performing better because we're interacting with those placements now? So yeah, a few things coming down the pipe that will also give us more levers to pull with the ongoing management of pmax campaigns. But typically because we're trying to focus it towards demand capture, it has more success when we're optimizing and modifying our performance feed and our segmentation.

[Eric Dick]

Can you, you may have alluded to this, you may have even said it outright, but can you sort of talk about your attribution stack like it's with pmax being such a holistic type, it draws in all these different sources, how can you be sure that it's not just sort of double counting your organic or maybe your influencer campaign? How do you sort of de dupe its efforts to make sure it's actually incremental?

[Dougie]

Yeah, great question. So I never trust fully in platform attribution. Yes, we're using data driven attribution on the vast majority of our clients, if not all of them. And those are going to be more accurate in terms of divvying up the conversion between a branded click and the initial prospecting YouTube campaign that built that awareness. But each platform, and this applies to any platform, not just Google. But it looks at only the clicks within its ecosystem. It's not looking at, okay, this had an organic click on it and then they purchased through Google. So it's not taking into consideration, hey, maybe this wasn't as incremental. It just is trying to take all that attribution because it only sees its little ecosystem. So how we balance that is looking at things like GA4, we do utilize like Northbeam and Triple Whale at the company to get other sources of information. But I would say for Google we are often checking back in with GA4 to get a better sense of the customer journey. Right. You have some insights within GA4 to see. Okay, how are people eventually converting? Are they finding us at top of funnel through meta and then they're coming from a prospecting search on Google and then ultimately converting once we've given them they've signed up for an email list. So I would say we certainly lean heavily into GA4 on that front. But we also have third party attribution companies Stidle as well as one we work with to try and shore up the deficiencies within GA4 as well.

[Eric Dick]

And is it a really thirsty platform? Is it trying to just take credit as much as it possibly can?

[Dougie]

My my opinion is it is thirsty, yes, but less so than potentially other platforms. It's not going to take attribution for someone who didn't click on an ad unless we're looking at view attribution. But yeah, generally anything that it touches that led to a conversion it's going to consider okay, I was part of driving that. And that goes for other platforms as well. So in platform attribution is always going to be thirstier and more, I guess, ambitious than what we typically actually expect the incremental value to be.

[Eric Dick]

My guess is Applovin is really thirsty. I'm really excited to hear. I haven't a bit of a lull on the news from Applovin, but I'm excited to. I know we've got some internal tests running on that. I'm excited to see how de duped that traffic is. Or I just know mobile advertisers are just famous for getting their cookie everywhere they possibly can and taking as much credit as possible. But everyone seems to indicate that there it is some incremental growth, which is interesting.

[Dougie]

Yeah, I've heard the same about Applovin. And I'm not disparaging these platforms for having grabby attribution. It's kind of all they can do. They only see these touch points. It's going to attribute conversions for certain clicks and actions for those touch points. So yeah, I think it's fine if it's grabby. We just don't take in platform reporting as our number one source of truth because we have to make sure that, okay, the conversions we're seeing here are backed out in the back end as being incremental. And when we launch efforts and increased budgets in certain places that also impacts the bottom line and not just what we see in platform.

[Eric Dick]

I was just looking at Googling about Google News to see if there's anything else we could discuss on this podcast and I just saw there's a big criminal stealing people's Google Ads heist thing. Have you seen anything about this?

[Dougie]

Oh, I have not encountered Google Ads accounts being heisted.

[Eric Dick]

Criminally heisted. They basically create ads that mimic Google Ads and you click on it and you put your information in it and then it hijacks your account.

[Dougie]

Oh, you'll have to send me that link. I haven't. Fingers crossed. Knock on wood. Haven't had any clients or anyone from the agency deal with that yet, but maybe we'll have to keep a keen eye out.

[Eric Dick]

I'll forward that in there. Well. Nice. Well, thanks for coming on the pod today. In hockey news, the Canucks are absolutely terrible. But they did manage to beat the Leafs 3 nothing a couple days ago, which I'm sure you're happy about.

[Dougie]

Well, and I'm going to the game in Vancouver, the annual Toronto in Vancouver game that they've lost every time I've gone. I'm 04, so I just chalk that one up as another win on your Canucks calendar because I'll be forking up some money for those seats and they will inevitably disappoint me as they always do.

[Eric Dick]

Just wait for the playoffs. You got lots more disappointment left. Thanks, buddy. This was a lot of fun and yeah, look forward to our next chat. I'm excited to. In our preamble we talked a little bit about YouTube ads and I'm excited maybe in a future episode to talk a little bit about demand capture on YouTube ads. Super exciting.

[Dougie]

Yeah, I think exciting changes going on at the agency, but even within the department to test different ways of approaching the Google platform. Always trying to learn.

[Eric Dick]

Nice. Are you coming up on a year leading the Google department over at Pilothouse?

[Dougie]

I sure am.

[Eric Dick]

That's pretty sweet.

[Dougie]

February of 2024 was the date that I kicked it off.

[Eric Dick]

Nice. And how big is the team?

[Dougie]

We're a lean team, so we've got nine or 10 players. Lean but mighty nice.

[Eric Dick]

Love it. Well, lean in. And if you want to work with Dougie and the Pilothouse Google team, just reach out and we can make that happen. Otherwise, keep gaining these awesome insights from our all killer no filler episodes and we'll chat again soon.

[Dougie]

Dougie, Sweet. Thanks for your time, Eric.

[Eric Dick]

Thanks, man. Bye. Thanks for listening to today's episode. If you're not getting the DTC newsletter. You can subscribe for free at directtoconsumer co. And if you want to learn more about Pilothouse's All Killer no filler services, take off to Pilothouse Co. I'm Eric Dick and this has been the DTC podcast. We'll see you next time.