How Google’s AI Max, PMax and Demand Gen Work Together
Google's three AI campaign types now work together across your entire funnel. Here's how to use them for 2x conversions and 31% lower costs.
The Future of Google Ads Is All About AI Integration
Google’s advertising platform is changing fast. Three AI-powered campaign types now work together to reach customers at every stage: AI Max for Search, Performance Max (PMax) and Demand Gen.
When you use them properly, they create a marketing system that builds on itself. But getting the balance right between automation, budget and control takes some thought.
What Each Campaign Does
AI Max for Search: Better Intent Matching
AI Max is Google’s newest upgrade to traditional Search campaigns. It goes beyond your keyword list, automatically expanding coverage, writing optimised ad copy and even choosing better landing pages.
Google reports that advertisers enabling AI Max see around 14% more conversions at similar costs. Campaigns that previously relied only on exact or phrase match keywords saw up to 27% more conversions.
Performance Max (PMax): All-in-One Conversion Engine
Performance Max is Google’s full-funnel workhorse. It runs across Search, Display, YouTube, Discover and Shopping, automatically finding and converting high-value users. It works best for scaling results once you’ve got your creative assets and conversion goals sorted.
Demand Gen: Building Awareness and Consideration
Demand Gen focuses on top and mid-funnel engagement through visually rich ads on YouTube, Discover and Gmail. It’s designed to reach new audiences and spark interest before people start actively searching.
Advertisers adding Demand Gen to their Search or PMax campaigns saw an average 14% increase in conversions.
How They Work Together: A Full-Funnel Strategy
Think of these three campaigns as a team, each covering a different stage.
1. Create Demand with Demand Gen
Start by capturing attention and building brand familiarity. Use video and image-rich creatives to tell your story, highlight benefits, and reach new audiences based on interests or lookalikes.
2. Nurture and Convert with Performance Max
Once interest is built, PMax picks up the baton. It uses signals from your Demand Gen and website traffic to find users most likely to convert, showing them the right message across Google’s ecosystem.
3. Capture High Intent with AI Max for Search
Finally, when users start searching with clear buying intent, AI Max ensures you’re there. It dynamically expands your reach to new, relevant search queries, and uses generative AI to write ad copy that matches each user’s intent.
Google’s new AI campaign trio: AI Max, Demand Gen and PMax
Real-World Results
L’Oréal reported a 2x higher conversion rate and 31% lower cost per conversion after implementing AI Max to capture new search queries.
MyConnect (Australia) achieved 16% more leads and a 13% lower CPA with AI Max-enabled Search campaigns.
Brands using Demand Gen alongside PMax saw higher conversion lift and stronger mid-funnel engagement as AI learned to target similar audiences more effectively.
The Pros & Cons of Combining These Campaigns
What Works Well
Full-funnel coverage: Reach users at every stage of their journey.
AI-driven efficiency: Machine learning manages optimisation and bidding.
Cross-learning: Each campaign feeds insights into the others for smarter targeting and creative testing.
What to Watch Out For
Campaign overlap: Demand Gen and PMax may compete for the same audience, increasing costs.
Limited visibility: PMax offers minimal insight into placements or audience performance.
Creative demands: Both Demand Gen and PMax rely on high-quality visuals and refreshed video assets.
Attribution gaps: Multiple campaigns can make it difficult to pinpoint conversion sources.
Budget fragmentation: Smaller budgets split across AI campaigns can reduce data quality and consistency.
Tips for Making This Strategy Work
Start small: Test each campaign separately before running all three.
Define your goals clearly: Know what success looks like at each stage of the funnel.
Feed the AI: Use strong creatives, accurate tracking, and structured data.
Watch for overlap: Adjust audience and placement settings to minimise competition.
Keep optimising: Automation helps, but human oversight keeps your message on-brand and performance stable.
The Bottom Line
When done thoughtfully, Google’s AI Max, Performance Max and Demand Gen campaigns create a powerful marketing engine. Together, they build awareness, nurture intent and drive conversions whilst learning from one another.
This level of automation demands a different marketing mindset though. Instead of micromanaging keywords and bids, success now depends on strategy, creative direction and proper measurement.
AI handles the execution, but you still need human insight to steer the ship. Find out how we can help you navigate Google’s fast-changing advertising platform.