While auditing PPC accounts for agencies, freelancers, and in-house teams, I’ve found that Performance Max campaigns typically fall into one of four categories.
Below, I’ll break down each category, discuss their pros and cons, and share some insider tips on how we manage our accounts. This will help you make the most of your top performance auction opportunities.
1. Best performing/high margin targeting
By far the most common structure that our audits uncover is a focus on “core products”. Many advertisers work under the assumption that they should focus their advertising on the products that sell the most. Of course, they have other products in their catalog, but they may not want to advertise all of them.
By segmenting products into “top performing” and “long tail” campaigns, you can artificially force top performers to spend more on top performing products by setting lower ROAS targets. This can reduce the time it takes for Performance Max to know which products are good and which are bad.
This approach sometimes works, but it’s usually based on bad assumptions:
The product clicked on is not necessarily the product purchased. Our internal research determines that cross-sell rates are typically ~70%. By forcing Google to show the product you want to sell instead of the product they want to show, CPCs often increase, while CTRs decrease. Assigning inquiries to the most appropriate product is vital to successful purchasing. For example, top products for shoe retailers might be Nike, Adidas, and HOKA. However, a search for New Balance should find a New Balance sneaker. Forcing the top products likely means they’ll be the only retailer in the SERP showing a Nike shoe in a New Balance search. They will lose the click along with a long sale opportunity. A common mistake we see is when advertisers don’t segment asset groups by product type. If your main product segment contains products from multiple categories or brands, use asset groups to make sure your creative and ad copy make sense. Otherwise, you could end up with ads that talk about women’s clothing but show images of men’s products, like this one:
2. Segmentation by product type
The second most common structure is a strategy that groups similar products. Operating in this way ensures that groups of assets are relevant, with budgets and promotions that are easy to manage. This structure maintains groups of seasonal demand trends. In addition, it allows you to obtain relevant maximum auction information.
Not only does this structure keep data clean and assets relevant, but it’s probably one of the easiest to execute. However, it doesn’t take into account the business contexts surrounding margins, call center sales volumes, customer types, and more.
Also, a common mistake we see is when people quickly use feed product types to segment all products into campaigns and send them live. While this is an easy approach, adding a layer of data analysis before you launch is worth the extra step.
Performance Max requires sufficient signal volume to be successful. Examine the historical performance of your products and you may discover smaller categories with insufficient volume to stand on their own. They may need to be grouped with other long-tail categories to be successful. Just be sure to use resource groups to keep your ad copy cleanly segmented.
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3. Brand and non-brand segmentation
I don’t often see this structure in account audits, possibly because it’s a bit more complex to implement.
That said, it’s a common recommendation from self-proclaimed experts on LinkedIn that Google boosts Performance Max by including branded traffic. While it’s true that Performance Max runs on branded content, I don’t think it’s as big of a problem as it’s often made out to be.
Performance Max’s branded search traffic on the commercial network is a good volume that doesn’t cannibalize any organic traffic (besides negligible free clicks).
However, some advertisers are having issues with Performance Max serving branded text ads that they would prefer to serve through existing search campaigns. However, since Performance Max he can not run a search ad if the user’s query exactly matches the text of any keywords you’ve created, this shouldn’t be a problem.
Note: This has nothing to do with the “exact match” of the match type.
So, or:
you have created a sufficient breadth of brand keywords, including variants and/or misspellings with significant volume, and there is no problem. you do not have had enough breadth and Performance Max is entering the auction with your search campaign, and because of the higher ad rank, is entering the auction with a lower CPC than your brand campaign. You just saved money.
That said, this becomes a problem when peak performance is limited by budget and you’re forced to run a lot of branded text ads due to poor search creation. This will leave Performance Max with no budget to buy, which will definitely affect performance.
If you create a comprehensive and high-quality branded search campaign, you have no problem.
The positive aspect of this strategy is that it can solve the problematic top performance/search overlap in poorly built and managed accounts. You can also segment branded and non-branded purchases in case ROAS goals, budgets, or other campaign-level settings need to differ between branded and non-branded.
However, this strategy often solves a problem that doesn’t exist. This causes data to be segmented across more campaigns, often resulting in less revenue with the same efficiency. Also, it is usually recommended that the brand run on standard purchases, which again generates less revenue with the same efficiency.
4. Customer segmentation based on nCAC/LTV
This is the least common structure I see in audits. When I do, it often has significant errors due to its complexity. The general idea is to create Performance Max based on a customer acquisition strategy informed by new customer acquisition cost (nCAC) and lifetime value (LTV).
This strategy allows advertisers to justify higher CPAs by understanding the true value of a purchase beyond the average order value. In this way, Performance Max algorithms deliver consumer value rather than transaction value.
This helps them win more of the right auctions that help businesses grow in the long run. By emphasizing new high-value customers, Performance Max can support the growth of more efficient channels such as email, branded search and direct upload.
However, this strategy ultimately allows for a lower ROAS on the platform and can significantly reduce margins. This can be especially difficult in the short term if you use a long return window in your LTV calculation, creating a cash crunch that requires advertisers to improve their understanding of the entire sales practice.
However, those who can pull off this strategy will go further, faster. However, an expert must implement this strategy because it can quickly get out of control, squeezing margins beyond profitability. Proceed with caution.
Two Performance Max essentials
With that, I’ll leave you with a few must-haves, regardless of which strategy you choose:
SKU Zombie campaigns: These campaigns are full of products that are the “living dead”. They are active, in stock and eligible to publish, but they are getting very few (or 0) clicks. Sometimes these products don’t get the attention they should from bidding algorithms due to low historical volume. By separating them into their own campaign, the algorithm is forced to test them. Occasionally, a winner will emerge that adds significant incremental volume.
take everything: Set to a low priority, this campaign helps ensure you don’t miss anything in your build. Sometimes existing targeting doesn’t pick up new products that are added. Adding this campaign and tracking volume collection helps you take advantage of products as soon as they arrive in the catalog, whether you’ve been kept in the loop or not.
Improve your top performing campaigns with targeting
Performance Max has come a long way since its debut in late 2021. As an out-of-the-box solution, it works reasonably well for advertisers.
Smart Bidding and Smart Campaigns have greatly commoditized both bidding and budget allocation. As a result, an important way to win in modern Google Ads is through the structure that Performance Max offers the best signal quality and volume. Go out and win.
The opinions expressed in this article are those of the guest author and not necessarily Search Engine Land. Staff authors are listed here.
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