Performance Max Adoption Continues to Grow as Results Begin to Level Off
Jul 7, 2022

Performance Max Adoption Continues to Grow as Results Begin to Level Off

Performance Max Growth

Using data aggregated from 2,179 Google Ads accounts we have been able to track how much Google Shopping budget has spent via Performance Max, Smart Shopping and Standard Shopping.

Spend in Performance Max campaigns has almost doubled when comparing Quarter 2, 2022 (31.95%) against Quarter 1, 2022 (16.77%). It appears that most of the Performance Max growth is coming from retailers and agencies switching from Smart Shopping which could be in part driven by the Google Migration process.

Standard Shopping also saw a small increase in spend during Quarter 2 as agencies and retailers most likely sought more control and transparency.

Performance Max Results

Whilst Performance Max delivered a better ROAS and higher Average Order Value than Standard or Smart Shopping during Quarter 1, 2022 results dropped in Quarter 2, 2022 with Performance Max and Smart Shopping having an identical ROAS (we double, and triple checked that!) and an almost identical Average Order Value.

Both Smart and Performance Max continue to outperform Standard Shopping, but it is concerning to see Performance Max results dropping as more retailers and agencies start switching over.

We wondered whether adoption was causing Performance Max results to drop or is it just down to how it’s being set up? It’s difficult to answer either conclusively and the adoption questions will require a lot more time to answer conclusively. But we did take a deeper dive into the use of Target ROAS within Performance Max campaigns.

You can see from the results that most Performance Max campaigns are utilising or being hampered by (depending on which camp you sit in) a Target ROAS. Performance Max campaigns that did not use a Target ROAS achieved a higher ROAS and a better Average Order Value.

We know from our own testing that utilising a Target ROAS can restrict your reach and reduce your revenue. In a lot of instances, Target ROAS is not used correctly or updated and changed far too frequently which constantly resets your learning period. You read more about that here.

Q: Is the best approach to managing Performance Max to simply remove the Target ROAS settings?

For some agencies and retailers, that would be a very uncomfortable thought and it’s not something we would suggest unless you had control over your product feed so you could build and utilise performance data.

We developed a solution for this approach 4 years ago which we call Performance Rules. Our Performance Rules let you pull data from your Google Shopping and utilise that data to create better campaign structures, one example of such is below…

These campaign structures utilise a theory by Google called Business Objectives and are more focused on working to compliment your business goals as opposed to just setting one Target ROAS and seeing what you get back.

Whilst the above is just one example, there are many ways you can structure campaigns based on the data you input and utilise within your Product Feed. In addition to Google Shopping performance data, the Cost of Goods Sold attribute can help you to create profit margins.