Demand Gen Ads Grew 192% Last Year — Here's Why You're Missing Out
Google's Demand Gen campaigns grew 192% year-over-year in 2025 — making them the fastest-scaling segment in paid search. Most advertisers haven't touched them yet. Here's what they are, where they show, and how to get started.
Demand Gen reaches 3 billion users monthly across YouTube, Discover, and Gmail — in a discovery mindset that makes them receptive to your ads.📷 Unsplash
Everyone runs Google Search. A lot of people have figured out Performance Max. Demand Gen is still the quiet one at the back of the catalog — and right now, that's exactly where the opportunity is.
In 2025, Demand Gen campaigns grew 192% year-over-year in ad spend. The fastest-growing segment across Google's entire product catalog. Spend across Fluency's $1B+ client base jumped from $6.5 million to $19.2 million in a single year. Those aren't random numbers — those are accounts that got in early while everyone else was still deciding whether to try it.
If you haven't launched one yet, here's what Demand Gen actually is, where it runs, and whether it makes sense for your account right now.
192%
year-over-year Demand Gen spend growth
3B+
monthly reach across YouTube, Discover, Gmail
800M
Google Discover users reached monthly
$50/day
minimum budget to exit learning phase
What Demand Gen actually is
Demand Gen (short for Demand Generation) is Google's visual ad format designed to reach users when they're in a discovery mindset — not actively searching, but open to being influenced.
It launched as a replacement for Discovery campaigns in 2024, with expanded inventory and new creative formats. The key difference from most Google products: Demand Gen is built for top-of-funnel demand creation, not bottom-of-funnel demand capture.
Traditional Google Search captures users who already want your product. They searched for it. Demand Gen finds users who don't know they want your product yet — and tries to make them want it. This distinction matters for how you measure it and what creative strategy you use.
🔑The mindset shift required
Don't evaluate Demand Gen on the same ROAS benchmark as your Search campaigns. Search converts people who already want to buy. Demand Gen creates the want. Measure it on view-through conversions, brand search lift, and assisted conversion data — not last-click ROAS.
The 192% growth story
Why did Demand Gen grow 192% in a year? A few reasons converged in 2025:
Google phased out Discovery ads and pushed advertisers toward Demand Gen. Many of those existing Discovery budgets migrated automatically. Advertisers who were already seeing results with Discovery found Demand Gen performed even better.
Performance Max's expansion into YouTube created competitive pressure for direct YouTube placements. Advertisers wanting more control over YouTube-specific creative started using Demand Gen, which gives you direct YouTube inventory access without the black-box blending of PMax.
The attribution problem with social shifted spend toward Google: As Meta's iOS-impacted attribution became increasingly unreliable and Advantage+ made audience control harder, some brand-building spend moved toward Google's visual formats where attribution via Google-signed-in users tends to be more reliable.
Creative-driven formats perform well in 2025–2026: With Meta's Andromeda algorithm making creative the primary targeting signal, teams already investing in high-quality visual creative found Demand Gen an easy channel to extend those assets into.
Demand Gen's strength is visual — video (especially vertical for Shorts), static lifestyle imagery, and content that blends with what users are already browsing.📷 Unsplash
Where your ads actually appear
Demand Gen runs across Google's highest-engagement visual surfaces:
YouTube — in-stream ads (skippable after 5 seconds), in-feed ads in YouTube search results, and Shorts placements. YouTube in-feed is particularly valuable — these are users actively choosing what to watch, which signals higher engagement intent than passive stream interruptions.
Google Discover — the personalized content feed on the Google app and Chrome new tab page, reaching over 800 million users monthly. These users are in a browsing mindset, which makes them receptive to content-style visual ads.
Gmail Promotions tab — your ad appears as a sponsored email at the top of the Promotions tab. When clicked, it expands to a full-width rich creative experience. Gmail has high engagement rates because users are actively managing their inbox.
Demand Gen vs. Discovery: what changed
If you ran Discovery campaigns before, Demand Gen replaces them but adds significant upgrades:
| Feature | Discovery (old) | Demand Gen (new) |
|---|---|---|
| YouTube Shorts | ✗ Not available | ✓ Full Shorts inventory |
| YouTube in-feed | ✗ Not available | ✓ Direct YouTube placements |
| Vertical video | ✗ Limited support | ✓ Native 9:16 format |
| Lookalike audiences | Basic | Improved generation |
| Creative testing | Limited | Broader asset group testing |
If you have historical Discovery campaign data, it informs your Demand Gen performance from the start. The algorithm carries over what it learned.
Demand Gen vs. Performance Max
This is the comparison most advertisers want answered: "Should I use Demand Gen or just add YouTube to my PMax?"
🤖 Use Performance Max when...
You want Google's AI to allocate budget across all inventory
Bottom-of-funnel conversion optimization is the goal
You're under $5k/month and can't manage two campaign types
YouTube is just one channel in your mix, not a priority
📹 Use Demand Gen when...
You want direct control over YouTube vs. Discover vs. Gmail placements
You're building awareness and mid-funnel nurturing
You have video creative optimized specifically for YouTube formats
You want to separate top-of-funnel from conversion campaigns
The practical rule of thumb: if your total monthly budget is under $5,000, PMax probably covers your YouTube needs without the overhead of managing a separate Demand Gen campaign. Above $5,000/month with strong visual creative, a dedicated Demand Gen campaign typically outperforms YouTube inside PMax on awareness-stage metrics.
Who should run Demand Gen
Demand Gen works best for e-commerce brands with strong visual creative, brands targeting longer consideration cycles (2–4 weeks research phase), companies that have maxed out Search and can't spend more without CPCs spiking, and businesses retargeting YouTube viewers with custom audiences based on channel engagement.
Demand Gen is probably not the right starting point if you're still getting your bottom-of-funnel campaigns right on Search and Meta. Nail the conversion-optimized channels first. Add Demand Gen when you have proven creative, working conversion tracking, and budget available for upper-funnel investment.
⚠️Don't add Demand Gen too early
I've seen accounts burn $3k/month on Demand Gen while their Google Search impression share was still only 40% and their Meta retargeting was underbudgeted. Nail the bottom of the funnel first. Add upper-funnel channels when you're actually maxing out on demand capture.
How to set up your first campaign
Step 1: Create a new campaign in Google Ads → Select "Create a campaign without a goal's guidance" → Choose "Demand Gen" as the campaign type.
Step 2: Set your bid strategy: Start with Maximize Conversions. If you have strong historical conversion data (50+ conversions/month), you can use Target CPA from the start. For awareness objectives, Maximize Clicks works for initial testing.
Step 3: Create your ad group with audience signals: Add your customer list (if you have one), website visitors, YouTube channel viewers, and a custom intent audience based on search terms your customers use. These are signals, not restrictions — Demand Gen will expand beyond them.
Step 4: Upload creative: At minimum, provide:
1 landscape video (16:9, minimum 10 seconds)
1 vertical video (9:16 for Shorts placements — optional but strongly recommended)
3–5 static images in multiple formats (landscape, square, portrait)
5 headlines and 5 descriptions
Step 5: Set your budget: Google recommends a minimum of $50–100/day for Demand Gen to gather sufficient data in the learning phase. Lower budgets produce slow learning cycles.
Step 6: Monitor separately from Search: Don't evaluate Demand Gen on the same ROAS benchmark as your Search campaigns.
The 192% growth in Demand Gen spend isn't a fluke. It reflects advertisers discovering a legitimate gap between their maxed-out bottom-of-funnel campaigns and their social prospecting — and finding that Google's visual surfaces fill it with better attribution than Meta and more creative control than Performance Max.
