The Evolution Of Demand Gen: From Discovery To Full-Funnel Advertising

Before Performance Max unlocked new possibilities in automated bidding, Google Display Ads were at the forefront of visual advertising across the Google Display Network, reaching audiences across websites, apps, YouTube, and Gmail. As Google continues to adapt to evolving audience behaviour, Display Ads are getting a new home within Demand Gen.

But what does this mean for your current paid search strategy, and how should you adapt?

What is Demand Gen?

Demand Gen (or Demand Generation) was introduced as a new campaign type within Google Ads around 2022, blending automated bidding, creative optimisation, and audience signals to show products to potential customers. 

It started as a discovery platform, but has since evolved into a one-stop shop for mid to upper-funnel advertising, bringing together brand assets such as videos, images, and headlines, while testing different combinations to learn what drives the best results.

What Are Display Ads?

Google Display Ads are a visually engaging advertising format designed to capture attention and drive interest amongst users earlier in their buying journey. This is achieved by placing relevant ads on pages where your audience is most receptive, even if they aren’t actively searching for the product or service that you offer.

Think banners along the top or sides of a webpage, or a square image that pops up whilst you’re reading a blog post, combining image, graphic, or video assets with automated bidding to serve ads across multiple touchpoints within the Google Ads Display Network where users are most likely to convert.

Alongside demographic, interest, and behavioural targeting, Google Display Ads can be a powerful tool for remarketing to users who have already interacted with your business in some way. You can also reach users browsing specific sites, such as competitor websites, to keep your brand top of mind.

Demand Gen & Display Ads

So, how will the two work in tandem? Combining Demand Gen campaigns with Display Ads reinforces Google’s shift towards Demand Gen as its primary campaign type for visual and discovery-based advertising, where you may have already noticed the migration tool in Google Ads prompting you to upgrade, which we recommend doing sooner rather than later.

From January 2027, it will no longer be possible to create Display campaigns in Google Ads, with existing Display campaigns set to be automatically migrated to Demand Gen later in the year. When this happens, advertisers will still be able to run Display-only campaigns since the Google Display Network inventory won’t be going anywhere. Instead, it will simply live inside Demand Gen alongside YouTube, Discover, Gmail, and Google Maps inventory.

Demand Generation Best Practices

To help you prepare, we have provided some best practices below to help you get the most from your Demand Gen campaigns.

• Use a combination of videos and images
• Provide Google AI with the right assets
• Use high-quality, relevant visuals
• Evaluate and optimise performance
• Select the ‘Balanced’ setting for Lookalike Audiences

This transition to Google Demand Gen could significantly change how your campaigns are structured, managed, and optimised by expanding access to additional features that are not available for Display ads. These include carousel ads, expanded video formats, lookalike segments, generative AI image tools, channel-level reporting, and new bidding options, such as campaign total budgets where a fixed spending cap can be set for the entire duration of the campaign. Therefore, if your account runs Display advertising, it may be worth investing in a Demand Gen marketing strategy.

With Demand Gen services transitioning more towards sales, we expect to see further updates to Google’s Demand Gen offering, strengthening its position as a valuable tool for advertisers who are looking to broaden their reach.

This is particularly effective for sectors such as travel and hospitality, where businesses can connect a Hotel Center account to dynamically display real-time property details, pricing, ratings, and imagery within their ads.

For retail, product feeds from Google Merchant Center can be connected, and brands that run paid social activity can also tap into Demand Gen’s unique storytelling aspect to build strong connections with their audiences.

With the right strategy in place, Google Demand Gen campaigns can help build long-term awareness, generate interest, and drive conversions for your brand, using visual storytelling and interest-based audience signals to create a full-funnel approach that connects with customers at every touchpoint.