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Can Performance Max live up to the hype for retailers?

Google are betting big on Performance Max for retailers. Does it live up to the hype or should advertisers be wary of change? 

Google are betting big on Performance Max in 2022, with a conscious effort to make this the retail platform of choice. There’s promise of better results, scalable growth, and a future proofed solution within a new, all encompassing, automated campaign type. But some advertisers we’ve spoken to are wary about losing control in this new world of automation.

But should they be worried? The short answer is probably no, however Performance Max isn’t going to miraculously solve every problem for every advertiser.

In late 2021, the team at Merkle put together a crack team of experts to help advertisers on this new journey of automation and really put it through its paces. Seeing the industry leading work we were doing, as well as our history of automation and innovation, Google picked Merkle to be at the forefront of the format with dedicated support as well as a feedback loop to help grow the format.

Performance Max Google 1

As new features have been rapidly rolling out over the past few months, the Performance Max team have spent a lot of time testing and learning at scale as we explore this new frontier to see whether it lives up to the hype. The features originally embedded within Performance Max skewed the product towards lead gen operations however that’s changing with new features, and this prospect has us really quite excited. More on those features later.

The results from our testing

But first, what has us extremely excited are the test results we’ve seen across our retail portfolio. Although we’re seeing relatively steady results when it comes to ROAS (or CPA), we’re seeing some fantastic growth of traffic, conversions, and revenue. Performance Max isn’t vastly outperforming other campaigns on a like for like basis, what it is doing is finding growth opportunities and new, relevant customers based on the needs of the advertisers as a complementary campaign type. This is thanks to the enhanced reach across YouTube, Search, Discover, Gmail, Display and Maps combined with strategic use of smart bidding and other campaign` types on the side.

Total revenue across our retail tests was up 91% vs control campaigns, with all advertisers seeing some form of growth. There is of course additional cost associated with reaching these new customers, but not at the expense of ROAS, with average order values up considerably due to the targeting, creatives and feed integration that is so integral to the campaign type.

Performance Max Google 2

Performance Max is becoming more and more a central part of the marketing mix for many of our advertisers, and that importance is only going to increase with upcoming changes.

The future of Performance Max

Google have just announced that Performance Max is now compatible with Floodlight tags, which is a game changer for advertisers using Search Ads 360. The wealth of information that Floodlights can provide back for analysis and reporting dwarfs that of Google Ads, but the biggest benefit is the ability to use the various smart bidding options in Search Ads 360 to enhance performance.

And in Q2 2022, Google are rolling out access to the 1-click upgrade tool, and why is this important? Well, from Q4 this year you’re not going to be able to get away from it as Smart Shopping gets upgraded to Performance Max. Which means now is the time for testing, the time to lean into this new way of working and to get your ducks in a row before peak.

“The retail marketing landscape is changing rapidly, so for us to see some really strong results this early on with Performance Max gives us great confidence in the future of the product.”

Maria Diggle

Director of Ecommerce

It’s time to test!

Performance Max isn’t going to solve every problem for every advertiser, and it will need a tailored approach based on business need. There are currently some drawbacks which we’re hoping to see resolved in the future, such as lack of script integration and the inability to pin assets. However, the potential upshot appears massive from the tests we’ve done when it comes to growth.

If you’d like support in testing Performance Max from the most advanced team in the UK, why not reach out to the Merkle team today