If you want to master Google Ads and scale your campaigns beyond your current levels, then you need to know about Demand Gen campaigns.
Today, I’m going to walk you through exactly how to set up a Demand Gen campaign step by step. Then, I’ll share the advanced strategies that I use with my clients at Big Flare to scale Demand Gen profitably.
Let’s get into it.
Setting Up a Profitable Demand Gen Campaign
First things first — setting up the campaign correctly is crucial for success. Here’s how to do it right.
Start a New Campaign
In Google Ads, click the blue plus button to create a new campaign.
Select “Sales” if you run an ecommerce store or “Leads” if you focus on lead generation.
Make sure you have the correct conversion goal selected — Purchases for ecommerce, Leads for lead gen.
Select Demand Gen as Your Campaign Type
Choose Demand Gen and click continue.
Name your campaign in a way that makes it clear what traffic type it targets (e.g., Demand Gen – Cold Traffic or Demand Gen – Retargeting).
Attach Your Product Feed (For Ecommerce)
This enables Google to generate product ads dynamically, showing price and product details automatically.
If you run lead generation, skip this step.
Set Bidding Strategy
Choose “Maximize Conversions” (don’t set a target CPA yet).
We'll adjust bidding later after the campaign gathers data.
Set Your Budget
Demand Gen needs a decent budget for testing. Expect to start with at least $5K per month ($166/day).
If you’re running on a tight budget, Demand Gen might not be the best choice—focus on Search and Shopping instead.
Ad Group Setup
Name your ad group after the audience type (e.g., “In-Market Audiences” or “Lookalike Audiences”).
If running ecommerce, select all products unless you want to limit ads to specific items.
Audience Targeting
Choose one primary audience per ad group:
Lookalike Audiences (based on previous buyers).
Custom Segments (based on search intent or competitor keywords).
In-Market Audiences (Google’s pre-defined lists of high-intent users).
Retargeting Audiences (previous website visitors).
Optimized Targeting
Leave Optimized Targeting ON for cold traffic campaigns. This helps Google expand to similar high-converting audiences.
Turn it OFF in retargeting campaigns to avoid cold traffic slipping in.
Pro Strategies for Maximizing Demand Gen Results
1. Use Video Ads — Especially Portrait Format
YouTube Shorts is one of the best placements for Demand Gen ads and most advertisers still aren’t using it. By running portrait videos, you gain access to cheap, underutilised ad placements.
2. Test Multiple Ad Creative Themes
Instead of just running one type of creative, test multiple themes in the same ad group. Label each ad and later analyze which themes perform best.
Some examples of creative themes:
Lifestyle Ads – Show your product being used in real life.
Product Features – Highlight unique benefits.
Before & After – Show transformations your product delivers.
Customer Testimonials – Feature real customer success stories.
3. Managing Your Bid Strategy for Profitability
Start with Maximize Conversions and NO Target CPA for the first 30-50 conversions.
Once you reach 50+ conversions, introduce a Target CPA based on recent averages.
Gradually lower your CPA over time — but not too aggressively, or the campaign may stop spending.
4. Set Realistic Budget Expectations
For a product with a $100 AOV, plan to spend at least $15,000 over 3 months before expecting a profitable return.
Month 1 = Expect losses.
Month 2 = Aim to break even.
Month 3 = If done correctly, start turning a profit.
Expect Demand Gen’s ROAS to be similar to Facebook Ads — often break-even or slightly above in the short term.
5. Structuring Your Campaigns for Success
Separate Retargeting from Cold Traffic
Cold traffic = Lookalikes, Custom Segments, In-Market Audiences.
Retargeting = Website visitors, cart abandoners, past customers.
Turn Audience Expansion OFF for retargeting campaigns.
One Ad Group per Audience Type
Example: Have separate ad groups for Custom Segments, Lookalikes, and Retargeting.
Want more tips like this? Stay tuned for next week’s newsletter!
Conclusion
Demand Gen campaigns offer huge scalability potential, but they require patience and budget.
Use video ads (especially portrait format) to access YouTube Shorts.
Test different ad themes to see what resonates best.
Follow a structured bid strategy: Max Conversions → Target CPA after 50 conversions.
Set proper budget expectations—it takes time to become profitable.
Structure campaigns correctly: Keep cold traffic and retargeting separate.
If you apply these strategies, you’ll put yourself ahead of 95% of advertisers who don’t fully optimize their Demand Gen campaigns.