Key Update: Video Action vs. Demand Gen Campaigns - what advertisers need to know

As Google Ads prepares to transition "Video Action Campaigns" (VAC) to "Demand Gen" by March 2025, advertisers should brace for a significant transformation in campaign strategy. This change emphasizes Google’s dedication to multi-format, full-funnel campaigns, and showcases an increasing interest in Demand Generation strategies. Understanding these updates is crucial for marketers looking to optimize their advertising efforts.

Placement Information

The most notable difference lies in the placement options. Video Action Campaigns traditionally focused on promoting ads on YouTube, specifically targeting Shorts, In-Stream ads, and video partners. In contrast, Demand Gen campaigns will include all Video Action placements while expanding to encompass Discover and Gmail. This broader reach allows advertisers to engage audiences across various Google platforms, increasing the potential for visibility and engagement.

Ad Formats

When it comes to ad formats, Demand Gen campaigns will support a wider array of creatives, including videos, images, and carousel formats. This diverse selection enhances the opportunity for advertisers to connect with their target audience in more engaging and effective ways. By leveraging multiple formats, marketers can tailor their messages to better resonate with consumers at different stages of the buying journey.

Campaign Goals

The strategic goals also differ between the two campaign types. Demand Gen focuses on mid-funnel metrics, aiming to drive awareness and consideration among potential customers. In contrast, VAC typically targets lower-funnel conversions. However, both campaign types can serve different stages of the customer journey, depending on the chosen bidding strategy, allowing advertisers to optimize based on their objectives.

Why did Google decide to push the use of Demand Gen campaigns?

Enhanced Revenue Potential for Google

The upcoming transformation in billing models reflects a shift from the Cost Per Mille (CPM) structure used in Video Action to a mixed model for Demand Gen that includes both CPM and Cost Per Click (CPC) options. This means advertisers will pay for more interactions, offering Google a diversified revenue stream. For example, advertisers will incur charges for teaser clicks in Gmail ads, encouraging user interaction before expanding the ad content. Similarly, Discover campaigns will use CPC for images and engaged views for videos, defined as views lasting a minimum of five seconds.

Simplified Campaign Management

The integration of these campaign types is likely to streamline the overall management process. By consolidating ad formats and placement options, advertisers may find it easier to manage their budgets effectively, leading to increased budget utilization and improved return on investment (ROI) for their campaigns.

Cross-Format Optimization

With the new Demand Gen structure, advertisers will benefit from cross-format optimization. Google’s algorithms will be better positioned to identify which ad formats – whether images, carousels, or videos – generate the best performance. This capability is contingent upon an adequate budget but could significantly enhance overall campaign effectiveness.

Holistic Performance Measurement

A unified campaign structure enables improved performance measurement, allowing advertisers to better attribute conversions from mid-funnel to lower-funnel stages. This measurement approach aligns with Google’s Performance Max strategies, providing a comprehensive view of ad effectiveness and customer engagement.

Competitive Positioning

Finally, this update sends a clear message to competitors such as Meta and TikTok. By adopting robust “Paid-Social” campaign types, Google is actively participating in a competitive landscape that continues to evolve. The commitment to Demand Gen strategies positions Google as a formidable player in the digital advertising space.

‍
For ongoing insights and expertise in Google Ads, connect with industry leaders and professionals who can help you stay ahead of the curve in digital marketing strategies.