Why is Google making the change?
This is part of a much broader evolution happening throughout Google Ads.
What is clear is that Google has steadily been moving advertisers away from campaigns that require them to manually choose exactly where and how ads run. Instead, Google increasingly wants advertisers to provide the objective, creative, audience information, and conversion data, and then allow its AI to determine where advertising dollars are most likely to produce results.
Performance Max is a good example. A single Performance Max campaign can place ads across Search, YouTube, Display, Discover, Gmail and Maps and use Google's AI to optimize the campaign to achieve what advertisers designate as conversion goals.
Demand Gen approaches the problem somewhat differently. It is designed to help advertisers reach and influence potential customers while they are watching, browsing, and discovering content across YouTube, Discover, Gmail, Maps, and the Google Display Network.
By moving Display into Demand Gen, Google can combine traditional Display inventory with these additional visual placements while giving its AI more opportunities to decide where an advertiser can most effectively reach a particular audience.
I think something is going on beyond the talking points. Google could have decided to automatically migrate campaigns from Display to Performance Max, but they didn’t. My theory is that they can’t predict how AI will impact traditional search or how search ads will fit into future AI results. It seems more future-proof to make advertisers less reliant on search.
Google reports that advertisers adding Google Display Network inventory to Demand Gen have seen an average 9.5% increase in ROI, although we don’t see direct evidence of this in multifamily campaigns. Performance Max campaigns outperform Demand Gen’s ability to generate direct conversions.