Inside Google Ads podcast: Episode 109 - Optimizing PMax

Performance Max is no longer a “black box”, it's a “clear box.” You can see exactly what your Performance Max campaign is doing, the placements, the search terms, the audiences, et cetera, but...you can still only guide it rather than telling it exactly what you want to do.

Because honestly, if you could tell Performance Max exactly what to do, it wouldn't be Performance Max anymore. It would be Search or Demand Gen or Video.

So if you can't directly control what it does, but you can see what it does, how do you optimize a Performance Max campaign? 

Today, I'm going to share with you an excerpt from my SMX Masterclass, Google Ads Beyond Search. This is part of a five hour masterclass that I deliver for SMX, one of the leading search marketing organizations. They also run Search Engine Land. If you know, you know.

And the reason I got permission to share this with you here is because I'm teaching an updated version of this masterclass again in April 2026.

In this masterclass, we cover everything you need to know about audience and content targeting. We dive into Performance Max, Demand Gen, and Video campaigns. I share specific examples of how to create effective creative for those campaigns. And new this time around, we're adding a whole section on advanced bidding as well. 

So please enjoy this excerpt about how to optimize a Performance Max campaign. And if you'd like to join me for the next SMX Masterclass Google Ads Beyond Search, simply follow the link in the episode description. 

I'm your host, Jyll Saskin Gales. I spent six years working for big brands at Google, and now I work for you.

This is Inside Google Ads: Episode 109, Optimizing PMax.

Here we go.

Performance Max is the default campaign type in Google Ads. When you create a new Google Ads account, if you haven't done that in a while, it will automatically get you to create a Performance Max campaign before you even complete your account setup. So Performance Max is the all-in-one, AI-powered campaign type. It allows you to run Search, Shopping if applicable, Display, Video, Gmail, Discover, Maps if applicable – every kind of inventory all out of a single campaign. 

This can be a good thing for some advertisers and a not so good thing for some advertisers. So there are a few things to watch out for when you are using Performance Max. 

First, I've mentioned this a few times today, Performance Max runs on signals, not targeting. What that means is you can give Performance Max an audience signal, meaning you can give it an in-market, affinity, life event, detailed demographic, or custom segment to say these are the kinds of audiences I would like to show ads to. But it may or may not obey that. Ultimately, it's going to show ads to whoever it wants, who it thinks can achieve your goals as set by your conversion tracking and your bid strategy. 

Similarly, you can give it search themes, which tells it the kinds of searches you would like to advertise on. But ultimately, it's going to place your ads on the searches that it thinks will do the best job of achieving your goals as set by your conversion tracking and your bid strategy. 

Next thing I'll say about Performance Max is it's really complicated. OK, you would think that by creating this all-in-one campaign type, that would make things easier. But actually, running Performance Max is so complicated because there are so many different settings and different reports. 

And some of the things are the same as other campaign types. For example, there's now a Search Terms Report in Performance Max, just like you'll see in Search and Shopping. But then other things are different, like in Performance Max, you have asset groups instead of ad groups, which brings different nuances. 

I say all this to say, if you want to test Performance Max, which is a good idea to at least test for most advertisers, you must have two key things, full funnel conversion tracking and excellent creative.

What do I mean by full funnel conversion tracking? 

If you're an e-commerce business or you're selling something like SaaS, you know, the purchase happens online, someone clicks on your ad and goes to your website and gives you money and that's it. Performance Max can work really well for you. 

But if you work in a lead generation business, I know there was a question about this earlier with offline conversion tracking and sales to leads. So if the thing someone does on your website is fill out a form or book a meeting or call you and then the actual giving you money happens later, either a day later, a week later, a month later, a year later offline, that is a lot trickier to get Performance Max to work. It doesn't mean it can't work for lead generation. It just means I would only recommend running Performance Max for lead generation if you're able to feed Performance Max that offline conversion data, whether or not those leads turn out to be valuable customers or not.

Next, creative. We're going to talk a lot about creative today, but under the hood of Performance Max, you don't get to control your targeting. You don't get to control which channel your ads show on. So the one key piece you do control, other than your conversion tracking and your bid strategy and your budget, is your ad creative, which could be your shopping feed (if you have a shopping feed), text, image, and video. 

So creative is important in all Google Ads campaigns, but it's especially important in Performance Max because it's the campaign type where you don't get to pick who sees your ads at all. So your creative is really what guides that.

Given that you don't get to control your targeting, how do we actually optimize a Performance Max campaign? What can you actually do to help guide the system and get great results from Performance Max? 

These are some of the things I suggest you look at. And a lot of these things are quite new. So maybe you ran Performance Max in 2022 when it first came out and it was terrible and you haven't run it since. I'm not going to say that it will work for sure for you now, but it's got a much better chance of working well for you now because we do have a lot more transparency. 

First is in the reporting. This is all new since about this summer at the earliest. So there are three key reports that you now have in PMax or your account may not have it yet, but it'll be coming soon. 

First is the Search Term Report. So before, in a Performance Max campaign, you couldn't see the actual searches you advertised on. You had this abstracted thing called a search category report, but thankfully that's gone. You now have Search Term reporting in PMax, just like in Shopping and Search. So that is a huge improvement. 

And alongside the transparency, I always look at if there is transparency and is there control. Okay, we have the transparency to see the search terms. Can we do anything about it? 

You can add negative keywords in Performance Max now. So that is an option that's available to you to help control what's happening in the Search Term Report. 

Next is the Channel Performance Report. This is brand new for PMax, and there are now rumors in the industry that this will be coming to other campaign types like Demand Gen, I can neither confirm nor deny, but it is here. That means in a Performance Max campaign, you can now see how much of your impressions, spend, conversions, et cetera, came from Search or Shopping or Display or Gmail or Maps. You can see that channel mix that's happening under the hood. We now have that transparency. 

However, the control piece is not there. In a Performance Max, you cannot control how much of your spend is going towards these various channels. Why? Because that would completely defeat the purpose of Performance Max. If you want to control that, run a Demand Gen campaign, run a Shopping campaign, but in Performance Max, while you can't control the channels, you at least now can see how those different channels are performing with your Channel Performance Report. 

So what do you do with that information? Well, it may surprise you to see where some of your ads are playing. 

For example, if you see that a ton of your ad spend is going to Gmail, then you're going to know that your images probably aren't as important, it's going to be your headlines, which is that email preview that's super important. That may be where you're going to want to experiment the most. 

Or conversely, if you see that like none of your spend is going to YouTube, well, then don't worry about testing a new video asset that's not going to do anything. Focus on your text and image instead. So that's how it can be helpful to help you determine which assets to prioritize and maybe which other campaign types to launch.

If Discover is doing really well for you and that's surprising to you, you can launch a Demand Gen campaign on Discover to try to maximize on that. Or you can say, you know what, I don't need to do that because Performance Max is taking care of it. So at least the transparency is there, even though the control for channels is not. 

And then the third thing now in PMax that we have is Asset-level reporting. While we got this last year, now you can see how each headline, description, image, video, et cetera, is performing just like in other campaign types. It can be really helpful for optimization. 

The only thing I'll say is, don't try to optimize too soon. If you look at your different descriptions and you see that one has a CTR of 1% and another has a CTR of 2%, don't just pause the one with the CTR of 1%. 

My general rule of thumb is that in order to judge the click-through rate of something, it has to have at least 100 clicks. And in order to judge the conversion rate of something, it has to have at least 50 conversions, preferably more like 100 conversions. And this doesn't just apply to PMax, by the way. And again, this is a “Jyll rule of thumb” that I came up with based on my experience. So if you just launched a PMax campaign and on day two, one description has 30 clicks and the other has 50 clicks, it's just too soon to judge.  Give it enough time, give enough data to come through before you try to optimize these metrics. 

I see two questions coming through, so I'm to come to those before I keep going. 

Nolan says, I ran PMax last year, not this year. Would the Search Term Report show historic data? 

No, it goes historic to a point, but not as far back as last year. And same with the Channel Performance Report. It goes back maybe a few weeks, but not much more than that. So it'll really give you data for now, maybe the last 30 days or so, but not much before that.

And then Dixie says, what about audience reporting for PMax? 

So this is something that PMax, I don't want to say it's always had, but it's had for at least two years now, and it still does. You can go to the insights tab. I showed you this earlier today as a new thing you can do in Search campaigns and Shopping campaigns, but that's actually a functionality that was borrowed from PMax. And in a PMax campaign, you would just go to Insights and Reports, Insights. And then if you scroll down on the screen, there will be an audience insights box. It'll tell you your impressions, your clicks, and then if you have enough conversion data, your conversions, how your converter audience insights look, how your click audience insights look, and how your impression audience insights look. So that's been there for a while. It is a great feature to check, and I highly recommend checking it.

It'll show you how audiences are performing. And next to each one, it'll either say signal or optimized. If it says signal (and again, this is the same for Demand Gen campaigns) next to an audience, it means that is an audience that is in your audience signal. If it says optimize, it means that wasn't in your audience signal, but PMax figured out that that's a good audience, and it's already optimizing for it. So you don't have to go add it to your audience signal. You don't have to do anything. It's just telling you we're optimizing for this audience now. 

How to optimize PMax - next, creative experimentation. So like the one thing that you really control, well, you control your bidding and your conversion tracking, but other than that foundation, the one thing you really control inside your PMax campaign is your creative. So testing different creative, which we're going to get to a bit later today, text, image, and video is a great way to optimize PMax. 

For example, one client I'm working with, we started running PMax for this product and it's a product that anyone can use, but if you're a pet owner, there's a really specific use case for it. And so we decided to create a separate asset group with the same products in it, but just creative - video, headlines, imagery - that showed pets interacting with this product so that we could reach them differently. We ran that for two months. While we did get some sales out of the pet part, it just didn't have as good of a ROAS than the general part. So we actually just paused the part earlier this week. Not every experiment pans out, which is why I like sharing that example. But you can test different things to see how they potentially work and then wait until there's enough data before you determine if something is working out or not for your business. 

Bidding and conversion action. So I keep saying bidding and conversions, bidding and conversions over and over and over again because these are at the foundation of your PMax campaign and any campaign using Smart Bidding, which would be most of your campaigns. Your conversion actions are how you tell Google what you want to happen, purchase, form fill, meeting, call, et cetera. And then your bid strategy is how you tell it to achieve that. 

So for example, a bid strategy of Maximize Conversions, for example, tells your Performance Max campaign to spend my budget and get me as many conversions as possible. In that priority order, spend my budget and then get me as many conversions as possible. Whereas, a bid strategy of target CPA, for example, flips that order. It says, I'm looking for conversions at an average CPA of $200. If you can do that, spend my budget. But if you can't, don't.

Those are really different directions to give a campaign that could achieve really different outcomes even with the same underlying conversion action. So your bidding and your conversion actions are really, really, really, really important. And then the way to try to optimize and get better results out of that is through your creative since you don't control your targeting or your channels. 

Question from John, can you show us how to check and adjust audience signals in PMax? 

It's a section called signals. So here are search themes, not the same as keywords, because Google may or may not show your ads to people searching for these things. Completely optional. You can add up to 50. I think I just read that Google's increasing that limit to 100 as well, and that's per asset group. You could then have multiple asset groups.

And then here are the audience signals. If you click additional signals, it opens this up, which should look familiar to you because this is what it looked like in a Demand Gen campaign. And if you browse, you'll see in-market, life events, detailed demographic, and affinity, which should look familiar. And then custom interests, which is that thing I told you that's like a custom segment, but not quite the same. And then there's no custom segment based on search terms because you have search themes, which would sort of do the same thing. Your data is where all the remarketing is, and then in Performance Max campaigns, they just added this functionality again over the summer to be able to edit basic demographics. But again, just to confuse you, it's not part of the audience signal. It's in the campaign settings down here. Age Exclusion, it's okay. 

And the reason for that is because the way this used to work, and fun fact, this was the last update I made to my book before I published it, because they changed this, right? So this is mentioned in my book. But the way it used to work is your demographics would be part of your audience signal. So your age, your gender, meaning it was just a signal. So even if in your audience signal in PMax you set unchecked men and unchecked unknown and only had female, that's just a signal. It could still show your ads to men. So anyway, they have now brought age out of the audience signal and into the campaign settings. 

And again, I have heard rumors that certain people are also seeing gender here. As you can see, we are not today, but that seems to be how Google is choosing to handle this, at least for now. In PMax is making those demographics a campaign setting so that it actually is respected and is not just a signal. I told you this stuff is complicated!

Thank you for joining me for this special episode, an excerpt from my most recent SMX Masterclass, Google Ads Beyond Search. 

To join me at the next one, five hours of in-depth training with me on all aspects of Google Ads Beyond Search, plus an opportunity to ask me your questions live and get them answered. Follow the link in the episode description to join my next SMX Masterclass. 

I'm Jyll Saskin Gales, and I'll see you next time Inside Google Ads.