Demand Gen in 2026: what are these campaigns and how can you use them in Google Ads?

From Display to Demand Gen: the history of the advertising network’s evolution

To understand where Demand Gen came from and why Google is phasing out classic Display Network campaigns, we need to go back a few years. For almost two decades, the foundation for building reach online was the Google Display Network (GDN). The model was simple: you added banners or HTML animations, and the system displayed them across millions of partner websites. Over time, however, this formula began to run out of steam.

Users developed so-called banner blindness (subconsciously ignoring ads), and traditional Display became synonymous with cheap but low-value traffic. In response to the growing dominance of social feeds (Meta, TikTok), Google created Discovery campaigns in 2019. They focused exclusively on Google’s own, most engaging placements: the Discover feed, Gmail, and the YouTube feed.

In 2023–2024, Discovery evolved into Demand Gen, adding full support for video formats (including vertical Shorts) and powerful AI-based recommendation algorithms. In turn, the official announcement that classic Display would be phased out and its inventory migrated to Demand Gen ultimately completed this process. Today, Demand Gen is a single, cohesive ecosystem for creating purchase intent.

What is a Demand Gen campaign?

Demand Gen is a type of Google Ads campaign designed to build demand and reach potential customers at the stage when they are discovering products, brands, and services. Instead of waiting until a user enters a query in Google, the ad appears in visual environments such as YouTube, Discover, or Gmail.

In practice, Demand Gen combines the capabilities of discontinued Discovery campaigns, video ads, and modern AI-powered display activities. Creative assets play a key role here: product photos, video materials, carousels, customer reviews, promotional messages, and strong CTAs.

Where are Demand Gen ads displayed?

Demand Gen campaigns reach users across Google’s most important visual services. Instead of random, low-quality websites, ads appear in places where people spend their free time and look for inspiration:

• YouTube — ads on the homepage, in the content stream (In-Stream), and in video recommendations.
• YouTube Shorts — short, vertical video creatives in a 9:16 format that build native engagement on smartphones.
• Google Discover — a personalized news feed in the Google app that generates highly intent-driven traffic.
• Gmail — native ads delivered directly to the Promotions and Social tabs.
• Google Display Network (GDN) — banner placements on partner websites selected by the algorithm.

As a result, Demand Gen works well in campaigns where the product needs to be shown, explained, or made appealing before the user enters the active offer-comparison stage.

Demand Gen vs. Performance Max — how do they differ?

Demand Gen and Performance Max can run in parallel, but they serve different functions in the marketing funnel. PMax is more often used to close sales among people ready to buy, while Demand Gen is responsible for the middle and upper parts of the funnel — it generates new traffic and builds high-quality remarketing audiences.

For an online store, a good starting point is combining Search and Performance Max campaigns with Demand Gen. Search captures demand, PMax supports sales, and Demand Gen expands the audience and increases the number of people returning to the website.

Who do Demand Gen campaigns make sense for?

Demand Gen is not a campaign type exclusively for large brands with million-level budgets. It can be effective both in e-commerce and in services, provided you have correctly configured analytics, a testing budget, and materials that hold up visually.

E-commerce

Demand Gen campaigns are suitable for promoting bestsellers, new arrivals, seasonal collections, sales, and products with strong visual potential. Lifestyle photos, short product materials, and videos showing the product being used in everyday life work particularly well. Additionally, when combined with a product feed from Google Merchant Center, Demand Gen becomes a powerful sales engine.

Local and specialist services

For service companies, it is worth promoting a specific benefit, a starter offer, a free consultation, a completed project, or a customer review. Examples include an aesthetic medicine clinic, a renovation company, a law firm, a beauty salon, or a local property developer.

B2B and lead generation

In B2B, the campaign can direct users to a landing page with a case study, calculator, audit offer, or webinar registration. The most important thing is to measure valuable leads in the CRM, not just the number of empty submitted forms.

How do you launch a Demand Gen campaign?

Before launching a campaign, make sure Google Ads is receiving the right conversion data. Without proper measurement, the algorithm will optimize the campaign for random traffic instead of real profitability.

1. Define the campaign goal — sales, lead generation, website traffic, or hard remarketing.
2. Configure conversions — purchase (with value passed), form submission, phone call, or another stage with real business value.
3. Prepare audiences — remarketing lists, customer databases (Customer Match), search keywords (Custom Intent), and groups of similar audiences (Lookalike).
4. Add advertising assets — images in various formats (16:9, 1:1, 9:16), video materials, headlines, copy, logo, CTA, and optionally a product feed.
5. Choose a bidding strategy — “Maximize conversions” or target CPA will usually work best at the start. After collecting data, switch to target ROAS (tROAS).
6. Launch the test and give the system time — do not judge results after two days. The algorithm needs 7 to 14 days to stabilize the learning phase.

How do you optimize Demand Gen campaigns?

The effectiveness of Demand Gen depends on the quality of conversion data, creatives, and the proper division of account structures. Do not treat it like an old banner campaign — the goal is not to get the cheapest click (CPC), but hard profit.

1. Optimize for a real business outcome

If you run a store, the main conversion should be a purchase and its value. For services, configure only a valuable form, phone call, or scheduled consultation as a conversion. Micro-conversions (such as scrolling or time on site alone) can be helpful, but do not entrust bid optimization to them.

2. Test varied messaging (multimodality)

Do not limit yourself to one graphic. Prepare separate variants based on price, benefit, customer problem, review, guarantee, and product use case:

• Price message: “Free delivery from PLN 199”
• Benefit message: “Automation that saves 5 hours a week”
• Social proof: “Tested by over 1,000 specialists”
• Problem and solution: “Expensive clicks and no sales? Try an Ads audit”

3. Add 9:16 video for Shorts

Vertical video is an absolute requirement in 2026. Video does not have to be an expensive film production — dynamic product presentations, simple smartphone recordings (UGC), or customer testimonials very often outperform artificially staged ads.

4. Separate prospecting and remarketing

People who do not know your brand need education and trust-building. Users who abandoned a cart, on the other hand, respond to a time-limited offer, a product reminder, or free delivery. Keeping these two groups in one ad group clouds the picture and makes scaling more difficult.

5. Respect budget recommendations

Demand Gen needs fuel to operate efficiently. Setting a daily budget lower than 10 times the assumed cost per acquisition (CPA) will cause the campaign to get stuck in an endless learning phase.

Migration from Display campaigns to Demand Gen

If you have been using classic Display campaigns so far, do not move them over one-to-one without thinking. Demand Gen relies on higher-quality visual assets and engages mobile formats much more strongly.

1. Check which existing audiences and messages in Display generated real conversions.
2. Prepare new HD images and adapt video materials (with particular emphasis on the 9:16 format).
3. Launch a Demand Gen campaign in parallel with the existing Display campaign to maintain sales continuity.
4. Gradually shift the budget (e.g., by 25% per week) toward Demand Gen, giving the algorithm time to collect data.
5. Turn off the old Display campaign only once Demand Gen reaches the defined ROAS/CPA goals.

The most common mistakes in Demand Gen campaigns

• No proper conversion tracking — the algorithm does not know which audience groups generate revenue.
• Too few assets — uploading 1 graphic and 1 headline prevents artificial intelligence from testing combinations.
• No 9:16 video materials — this cuts the campaign off from the most valuable and growing placement: YouTube Shorts.
• Optimizing for clicks instead of results — targeting cheap traffic rarely translates into a profitable business.
• Budget changes that are too fast and aggressive — budget adjustments of more than 20% per day reset the algorithm’s learning phase.
• Mixing cold traffic (prospecting) with remarketing — this makes it impossible to accurately assess how much it really costs to acquire a new customer.

Example campaign structure for e-commerce

For an online store with an advertising budget of PLN 15,000 per month, a thoughtful and balanced allocation of funds across the sales funnel may look as follows:

Remember: this is a starting point, not a rigid matrix. The final budget allocation should always be adjusted to margins, industry specifics, and the data history in your Google Ads account.