Performance Max: The Complete Guide for 2025
Everything you need to know about Google's most powerful (and most controversial) campaign type
What Is Performance Max?
Performance Max (PMax) is Google's fully automated campaign type that uses machine learning to serve ads across all of Google's channels—Search, Display, YouTube, Gmail, Discover, and Maps—from a single campaign.
Google launched PMax in late 2021 and has been aggressively pushing advertisers to adopt it ever since. By late 2022, Smart Shopping and Local campaigns were sunset and automatically upgraded to PMax.
The pitch is simple: give Google your budget, your assets, and your conversion goals, and their AI will figure out the best way to get results. But is it really that simple? Let's dig in.
How Performance Max Works
1. Asset Groups
You create "asset groups" containing headlines, descriptions, images, videos, and logos. Google then mixes and matches these assets to create ads automatically.
You can have multiple asset groups per campaign, each targeting different audiences or products.
2. Audience Signals
You provide "audience signals"—hints about who you want to target. These include custom segments, demographics, and first-party data from your CRM.
Important: These are just signals, not targeting restrictions. Google uses them as starting points but will expand beyond them if the algorithm thinks it will get conversions.
3. Conversion Goals
You select which conversion actions to optimize for. PMax will prioritize these conversions and bid accordingly.
This is critical: if you don't set this up correctly, PMax might optimize for form submissions when you actually want purchases, or vice versa.
4. The Algorithm Takes Over
Once launched, Google's AI decides where to show your ads, which assets to combine, who to target, and how much to bid. You have limited control over the day-to-day decisions.
When Performance Max Works Well
E-Commerce with Product Feeds
If you have a Merchant Center feed with good data (titles, descriptions, images, prices), PMax can drive strong results for product sales.
Clear Conversion Events
When you have well-tracked, high-value conversions (purchases, qualified leads, appointments), PMax can optimize effectively.
Scaling Beyond Search
If you've maxed out Search campaigns and want to reach new audiences on YouTube, Display, and Discover, PMax can help.
Strong Brand + Visual Assets
If you have high-quality images and videos showcasing your products or services, PMax can leverage these across channels.
When Performance Max Struggles
Low Conversion Volume
If you get fewer than 50 conversions per month, PMax doesn't have enough data to learn effectively. Stick with manual campaigns.
Complex B2B Sales
Long sales cycles, multiple decision-makers, and nuanced targeting don't fit PMax's automation well. You need more control.
Niche or Local Targeting
If you only want to target specific cities, zip codes, or highly specific demographics, PMax's audience expansion can waste budget.
Poor Tracking Setup
If your conversion tracking is broken or inaccurate, PMax will optimize for the wrong signals and waste money fast.
How to Set Up Performance Max (The Right Way)
Audit Your Tracking First
Before launching PMax, verify that your conversion tracking is accurate. Test purchases, form submissions, and phone calls. Make sure revenue values are passing through correctly.
Create Multiple Asset Groups
Don't lump everything into one asset group. Split by product category, service type, or audience segment.
For example: one asset group for "Emergency Plumbing," another for "Bathroom Remodels."
Use Strong Audience Signals
Don't skip the audience signals section. Use your customer match lists, website visitors, and YouTube engagers.
Even though Google will expand beyond these, good signals help the algorithm start strong.
Set the Right Conversion Goals
Only optimize for high-value conversions. Don't let PMax chase newsletter signups if you really want sales.
Use conversion values to tell Google which actions are worth more.
Start with a Conservative Budget
Give PMax time to learn without blowing through your budget. Start at 50-75% of what you'd spend on Search campaigns, then scale if it works.
Use URL Exclusions
Prevent PMax from showing ads on low-quality websites by adding content exclusions. Block sensitive categories and parked domains.
Pro Tips for Performance Max Success
Use Negative Keywords
Yes, you can add negative keywords to PMax at the account level. Do this to prevent showing up for irrelevant searches.
Check Search Term Insights
Google doesn't give you full search term reports in PMax, but you can see "insights." Review these weekly.
Don't Pause Too Early
PMax needs at least 2-3 weeks and 50+ conversions to learn. Don't panic and pause after 3 days.
Keep Search Campaigns Running
Don't replace all your Search campaigns with PMax. Keep branded and high-intent campaigns for control.
Refresh Assets Regularly
Update your images, videos, and copy every 4-6 weeks to prevent ad fatigue across Display and YouTube.
Watch for Brand Cannibalization
If PMax starts stealing clicks from your branded Search campaigns, use brand exclusions in asset groups.
The Bottom Line on Performance Max
Performance Max is powerful when set up correctly, but it's not a magic solution. It works best for e-commerce, businesses with high conversion volume, and advertisers who want to scale beyond Search.
It struggles with low conversion volume, complex B2B sales, and situations where you need precise targeting control.
The key to success? Solid tracking, strategic asset groups, and ongoing monitoring. Don't just set it and forget it.
Get a Free Google Ads Audit
Casaccio Media helps business owners implement PMax safely, efficiently, and profitably.
We'll analyze your:
You'll receive a short recorded video with:
- What's working
- What's wasting money
- Whether PMax will help you
- The exact steps to improve performance