How to use Demand Gen campaigns for ecommerce

How should ecommerce brands use Demand Gen campaigns?

Ecommerce brands use Demand Gen to reach people who are not searching for them yet but are likely to be interested, on visual surfaces such as YouTube, Discover and Gmail. The best results come from a campaign with a product feed, strong image and video creative, lookalike segments and bidding toward purchases. Position it as a source of demand that feeds your Search campaigns, not a replacement for them.

What is a Demand Gen campaign?

According to Google, Demand Gen campaigns are built to capture engagement and action across YouTube (including Shorts), Discover, Gmail, Maps and the Google Display Network. The key difference from Search is that they do not wait for a query. Ads appear while people browse feeds or watch videos.

That makes Demand Gen closer to social advertising: visual quality, the first seconds and the right audience matter more than keywords. Google has also announced that Video action campaigns are being moved to Demand Gen, so Demand Gen is now the main campaign type for conversion-focused video ads on YouTube.

Which formats does Demand Gen support?

Google's help page lists the following formats:

Format	Detail	Ecommerce use
Single image	Landscape 1.91:1, square 1:1, portrait 4:5	Product and lifestyle images
Video	Landscape, square and vertical	Product demos, how-to videos, UGC
Carousel	2 to 10 image cards	Collections, colour options, bundles
Product feed	Merchant Center products	A product showcase under image or video ads

The product feed is what makes Demand Gen especially useful for ecommerce. In Google's words, it turns image or video ads into a virtual storefront: people can browse products under the ad and click straight through to a product page. You need a Merchant Center account linked to Google Ads and a healthy feed. We cover feed quality in our Performance Max product feed optimisation guide; the same principles apply to Demand Gen.

How should you set up targeting?

Lookalike segments are Demand Gen's strongest targeting tool. According to Google, they start from a seed list, such as past purchasers, website visitors or people who engaged with your YouTube channel, and help you reach new people with similar characteristics outside your existing customer base.

A practical targeting plan for ecommerce:

1. Prepare a seed list. Upload a quality customer list, such as buyers from the last 180 days or high-value customers.
2. Build a lookalike segment. Choose narrow, balanced or broad reach; narrow or balanced is usually more controlled for a first test.
3. Compare against interest and custom segments. Test custom segments built from competitor brands or category searches in a separate ad group.
4. Separate existing customers. If the goal is new customer acquisition, exclude existing buyers or manage them in a separate remarketing ad group.
5. Use channel controls deliberately. Google lets you choose which Demand Gen channels your ads show on. Starting with all channels and narrowing based on data usually teaches you more than restricting from day one.

How should you set bids and budget?

Demand Gen offers bidding for clicks, conversions and conversion value. For ecommerce, where the goal is sales, optimising for conversions or conversion value makes most sense.

Google gives two concrete recommendations:

• With Target CPA, set a daily budget of at least 10 times your target CPA.
• For Target ROAS, the Demand Gen campaign needs at least 50 conversions in the past 35 days.

If purchase volume is low, Google suggests optimising for lighter, more frequent events such as add to cart. This gives the algorithm more signal, but make sure the event genuinely correlates with sales.

Example budget calculation

Example: a cosmetics brand with a target CPA of 40 wants to test Demand Gen.

Item	Calculation	Result
Target CPA	Based on margin and LTV	40
Recommended minimum daily budget	10 x 40	400
Monthly equivalent	400 x 30	12,000

If that budget is too high, starting with a product group that has a lower target CPA, or optimising for a lighter event first, are alternative routes.

What matters on the creative side?

In Demand Gen, creative matters more than targeting. Practical rules:

• Upload every aspect ratio. Landscape, square and vertical images and videos let the ad fit more surfaces.
• Make vertical video for Shorts. Short vertical videos look native in Shorts inventory.
• Show the product in the first seconds. People scrolling a feed should see the product immediately.
• Keep text on images light. Headlines and descriptions already carry text; the image should show the product and how it is used.
• Test creative in separate ad groups. Separate angles such as price, benefit and social proof so you learn which message works.

If you already have a creative testing discipline on Meta, you can bring it straight into Demand Gen. We describe the testing setup in how to test Meta ad creatives.

How should you measure Demand Gen success?

Because Demand Gen creates demand, judging it purely on last click can be unfair. Someone may see your ad on YouTube and buy a few days later after searching for your brand. When evaluating it, look at:

1. Conversions and conversion value reported by the campaign itself.
2. Changes in brand searches and direct traffic while the campaign runs.
3. New customer rate and first order values.
4. Where possible, total sales impact through regional on/off tests.

If you would like to plan how Demand Gen fits into your current account structure, you can book a free growth analysis with Performetic through our contact page.

Key takeaways

• Demand Gen runs on YouTube (including Shorts), Discover, Gmail, Maps and the Display Network.
• It supports image, video, carousel and product feed formats.
• Lookalike segments are the main way to reach new audiences from your customer list.
• With Target CPA, keep daily budget at least 10x target CPA.
• Target ROAS needs at least 50 conversions in the past 35 days.
• Measure success with brand search and total sales, not last click alone.