Article

Ben Hirons
Ben Hirons 27 September 2023

Why it’s Time to Turn Off Your Performance Max (Pmax) Google Ad Campaigns

Over the past few years, there has been a big push from Google to use its tools to manage your Google Ad campaigns. But is it ireally in your best interest?

The push to use Google's tools started years ago, with actual humans calling you up and making suggestions on improving your campaign. Interestingly, more than 90% of their recommendations were to increase bids and budgets. 

Then came auto bidding strategies, which, unfortunately, too many businesses, Google Ads specialists, and digital marketing agencies embraced wholeheartedly.

This allows Google to increase bids automatically to get you a better position. Now, in isolation, this can be a good thing. But when most competitors follow suit, it pushes up bids across the board and makes Google more money.

Now We Have Performance Max (Pmax)!

The crème dele crème of automation in Google Ads. Quite simply, you let Google do it all. It does all the heavy lifting, deciding who, what, where and when to show ads.

Happy days for those who want it done and don't really care about getting the best results! But this is not a good thing for those who are more astute and interested in maximising your return on investment.

The Results are In...

We've studied over 30 Google Ads accounts running Pmax and conducted experiments on another 20 accounts. For lead generation and B2B businesses, Pmax produces a lower return on ad spend than the old-fashioned way.

When you break it down, there are clear reasons for this. Here, we delve into the six core reasons why Pmax isn't in your best interests.

1. Pmax runs on all Google networks

In the 20 years I've spent running my campaigns and the campaigns of the B2B and lead generation business we've worked with (and there have been a few!), the display network and partners network convert at a significantly lower rate than the core keyword search.

And we're not talking a bit here. It's 5-10 times worse. These networks are okay for brand building but will never convert well for leads.

2. Pmax uses nothing but automatic bidding

Given that Google Ads is inherently an auction system, it will only increase bids (I've never seen it decrease bids, funnily enough).

So, when you set up auto bidding, it will increase your bids. Then the auto bidding for competitor A will rise above yours, and then the auto bidding for competitor B will increase and then Google will increase your auto bidding again. Who is winning here?

3. Optimising around incorrect conversion actions

For it to work most effectively, you must set up accurate tracking and conversion actions. Of all the campaigns we've looked at in the past five years, over 90% don't have accurate or correct conversion actions set.

So, the algorithm gets you more incorrect leads, which, again, is not in your best interests.

4. Not all leads are created equal!

Most Google Pmax campaigns aren't set up right, making it difficult to differentiate between lead types. If you sell one service/product for $100 and the other for $50,000, we want more of the $50,000 ones, right?

Most agencies and Google Ads experts are setting it up based on leads, making the revenue irrelevant. No strategy or smarts is going into it, and the results show that.

5. It’s a lazy man’s game

It is a lazy man's game, and it produces lazy results. It really does! You have a limited ability to analyse what's working and not working and do more of the good and eliminate the bad (granted, it is slowly getting better, but still very limited).

I've said it before, and I'll repeat it – Pmax is, first and foremost, in Google's best interests, not yours. I've never seen anything good come from laziness.

6. Lack of transparency and accountability

Most problems in business and substandard performance can be traced back to a lack of transparency and accountability. Whether it's staff or suppliers, whenever there isn't complete transparency of what is going on and accountability measures in place, things turn to sh*t!

Pmax be Gone!

If you run a B2B business or one that is based on lead generation, then log into your Google Ads campaign today and switch off your Pmax campaigns! It isn't in your best interests.

Points to note:

  • This recommendation is for B2B and lead generation businesses. We are yet to conduct a detailed study on ecommerce businesses to provide well-balanced guidance here.
  • Pmax can be used sparingly to catch all campaigns or to test/trial things quickly (and I mean sparingly!), but it should never account for more than 10% of your campaign budget (give or take).
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