Demand Gen marks a shift in Google Ads toward visual advertising beyond keywords and text. Relying on traditional strategies when testing it wastes budget, hurts performance, and limits opportunity. To succeed, you have to think more like a social advertiser than a search advertiser.
At SMX Next, Industrious Marketing owner Jack Hepp explained why many businesses struggle with demand gen campaigns — especially in B2B and lead generation — while also sharing insights relevant to ecommerce.
Understanding the Shift: From Intent to Interruption
Demand Gen reflects Google’s shift from intent-first search advertising to visual, discovery-based campaigns.
Instead of targeting users actively searching for your service, you reach them as they scroll through YouTube, Gmail, or Discovery feeds.
This changes your approach: visual creative becomes the new keyword, replacing traditional targeting.
Common misalignments in Demand Gen strategy
Applying outdated search strategies can lead to failure with Demand Gen. The four main mistakes:
Expecting bottom-of-funnel CPAs from mid-funnel traffic.
Using overly broad, “spray and pray” targeting.
Running bland, generic creative.
Not knowing how to optimize without negative keywords.
Success requires a social advertising mindset.
Campaign structure: Understanding the hierarchy
Demand Gen uses a two-level structure.
Campaign-level settings control broad parameters like bidding strategy, conversion goals, and device targeting.
Ad group–level settings control audiences, locations, and channels.
Each ad group learns independently—insights don’t transfer—allowing precise audience segmentation with tailored creative.
Creating interruption-based creative
You must stop their scroll within 3-4 seconds. Your creative must capture attention immediately, speak to a specific pain point, and present your solution.
Unlike search ads — where users are actively looking for you — Demand Gen interrupts browsing, so your message must be instantly compelling and problem-focused.
Aligning visuals to the customer journey
Match your offer to audience readiness.
Cold audiences need educational content like free guides or diagnostic tools.
Warm audiences respond to case studies, webinars, and comparison tools.
Hot audiences are ready for demos and direct purchase offers.
Misaligning them — like pushing demos to cold audiences — guarantees failure from the start.
The power of problem-focused creative
Generic ads with stock photos and basic headlines get scrolled past. Winning creative uses bold headlines, striking visuals, and problem-focused messaging.
For example, “43% of cyberattacks target small businesses” speaks to a specific pain point, making the ad stand out and prompting engagement instead of a scroll.
Bidding and budget strategies
Demand Gen uses campaign goals rather than traditional bidding strategies: conversion-focused, click-focused, or conversion–value–focused.
Aim for 50+ conversions per month and budget 10–15x your target CPA to build enough data.
For click-based bidding, set budget based on desired traffic volume and target CPC.
Demand Gen is highly data-reliant, so hitting these thresholds is critical to performance.
Can Demand Gen work with small budgets?
Yes, with strategic planning.
Focus on mid- or upper-funnel audiences and optimize for MQLs instead of bottom-funnel conversions. This helps you reach 50+ monthly conversions for data density, even with smaller budgets.
Align your goals, targeting, and budget to generate enough conversion data.
Building the right audience
Avoid two extremes:
Audiences that are too broad (billions of impressions) where Google can’t identify your target.
Audiences too narrow (a few thousand impressions) where you can’t build data density.
The sweet spot: start with custom segments based on search terms or competitor websites, then layer in lookalike segments and strategic first-party data. Avoid optimized targeting at first — it works best to expand already successful campaigns.
The role of creative in targeting
Your creative shapes who Google targets. The people who engage with your ads teach Google who to show them to next.
Performance peaks when your creative speaks to your ideal customer profile. Align messaging to the buyer’s stage — cold audiences need different messaging than hot prospects.
Strategic exclusions
Use exclusions surgically, not broadly. It’s tempting to exclude like negative keywords, but over-excluding shrinks your audience too much.
Focus only on clear non-converters (e.g., specific age groups, locations, or audiences you know won’t respond). Give Google room to find engaged users within your parameters, rather than narrowing to the point of ineffectiveness.
Optimization: Where to focus
Without negative keywords, optimize through three levers: creative, audience, and offer. Test multiple formats (video, image, carousel) and styles (UGC, testimonials, problem-focused messaging). Continuously refine what works with new hooks and data points.
Test offers to match audience readiness — cold audiences need educational content, while hot audiences need direct CTAs.
Prioritize post-click optimization: improve landing pages, strengthen tracking with CRM integration, and ensure clean data feeds Google’s learning.
Real-world case study
A telecommunications company targeting B2B managed IT services drove strong results by aligning all three elements.
Offer: An interactive quiz showing businesses how managed IT could reduce costs.
Targeting: Custom segments based on proven search terms and competitor website visitors.
Creative: Problem-focused messaging about cybersecurity threats to small businesses.
Results:
$10 cost per MQL.
3.8% conversion rate.
40% of quiz takers became SQLs.
20% increase in total SQLs.
Key takeaways
As you plan your next campaign:
Match your creative to your customer and their stage in the journey.
Target the right audience at the right point in that journey.
Test and optimize creative and offers to find what resonates and drives action.