Google Ads Demand Gen: The New Format You Need to Know

Since October 2023, Discovery Ads no longer exist. Their replacement is called Demand Gen. The name changed, the scope expanded, and the creative possibilities grew. But the foundation remains the same: reach audiences at the top of the funnel, before they actively search for your solution.

Demand Gen is the Google Ads format designed to generate demand. Not to capture it. That's a critical distinction.

What Is Demand Gen?

Demand Gen is a campaign type that serves visual ads across the most-viewed surfaces in the Google ecosystem:

• YouTube (in-feed, in-stream, Shorts)
• Google Discover (the mobile news feed)
• Gmail (Promotions tab)

These are discovery spaces. The user isn't searching for anything. They're scrolling, reading, watching. Your ads blend into that content stream. The format is native: images and videos that look like organic content.

Where Demand Gen Ads Appear

YouTube

Your ads show up in the YouTube home feed, between video suggestions, and in YouTube Shorts. Unlike traditional YouTube campaigns (pre-roll, bumper), Demand Gen ads on YouTube are in-feed: the user chooses to click. No forced interruption.

Google Discover

The Discover feed on Android and the Google app reaches over 800 million monthly users. Your ads appear between recommended articles and content. Targeting is based on user interests, not a search query.

Gmail

Your ads appear in Gmail's Promotions tab. They look like an email. On click, they expand to reveal your full creative (image, copy, CTA).

Creative Formats

Demand Gen offers three ad formats:

Single Image Ads

One visual + a headline + a description + a CTA. The simplest format. Effective for direct messages with a strong visual.

Specifications:

• Landscape image: 1200x628 (1.91:1 ratio)
• Square image: 1200x1200
• Portrait image: 960x1200 (4:5) — the Shorts format

Carousel Ads

Up to 10 cards, each with an image, headline, and URL. Ideal for showcasing a product range, process steps, or client testimonials. The user swipes between cards.

Carousels generate 20–30% higher engagement compared to single images. But they require more creative work.

Video Ads

Short videos (15–60 seconds) served on YouTube and Discover. The most engaging format. But also the most demanding in terms of production.

Recommendation: start with single image and carousel. Add video once you've validated your message and audience.

Demand Gen Targeting

Lookalike Audiences

This is the major innovation compared to the old Discovery Ads. Demand Gen lets you create similar audiences (lookalike) based on your customer lists or site visitors.

Three similarity levels:

• Narrow (2.5% of the most similar users) — maximum precision, reduced volume
• Balanced (5%) — the recommended compromise at launch
• Broad (10%) — maximum volume, reduced precision

Lookalikes are the most effective targeting for Demand Gen prospecting. Your best starting audience: your existing customers. Import your email list, and Google finds similar profiles.

In-Market and Affinity Audiences

Same audiences as Display. In-market for those actively searching. Affinity for those with a general interest.

Custom Segments

Define your audience by searched keywords or visited URLs. Example: target users who searched for "CRM software" or visited your competitors' websites.

Remarketing

Retarget your visitors and email lists. Remarketing on Demand Gen is particularly effective on YouTube Shorts and Discover — surfaces where your competitors are rarely present.

Real-World Use Cases

1. Product or Service Launch

You're launching a new offering. Nobody is searching for it on Google yet. Search can't help you. Demand Gen puts your offer in front of the right profiles, before they even know they need it.

2. Brand Awareness

You're a B2B player in a niche market. Your prospects don't know you. Demand Gen places your brand in their daily digital experience — Discover in the morning, YouTube in the evening, Gmail in between.

3. Multi-Touch Top of Funnel

First contact via Demand Gen (image or video). Display remarketing to maintain presence. Conversion via Search when the user actively searches. It's a full funnel where Demand Gen acts as the entry accelerator.

4. Ecommerce Promotion

A product carousel with promo pricing in the Discover feed. The user scrolls, sees an attractive offer, clicks. The carousel format lends itself particularly well to seasonal promotions.

Limitations to Be Aware Of

Low Direct Conversion Rate

Demand Gen operates at the top of the funnel. Expect direct conversion rates 5 to 10 times lower than Search. That's normal. It's not a flaw of the format — it's its nature.

If you measure Demand Gen solely by direct conversions (last click), you'll always conclude it doesn't work. Use data-driven attribution or view-through conversions to measure the real impact.

Need for Quality Visual Creatives

On Discover and YouTube, your ads compete with editorial content and professional videos. A generic stock image won't perform. Invest in native visuals that look like content, not advertising.

Minimum Volume

Google recommends a minimum daily budget of $40–50 and a "Maximize clicks" bid strategy at launch to accumulate enough data. Below that, the campaign won't exit the learning phase.

Limited Reporting

Like Performance Max, Demand Gen reporting lacks granularity. You won't see the exact breakdown between YouTube, Discover, and Gmail. Google provides aggregate metrics.

Demand Gen vs. Performance Max

The question comes up often. Both formats cover similar surfaces (YouTube, Discover). What's the difference?

Criteria	Demand Gen	Performance Max
Channels	YouTube, Discover, Gmail	All Google channels
Creative control	High (you choose formats)	Medium (Google assembles)
Lookalike audiences	Yes	No (signals only)
Search included	No	Yes
Primary objective	Awareness, engagement	Conversions, ROAS
Reporting	Medium	Low

In summary: Demand Gen for top-of-funnel with creative control. PMax for automated multi-channel performance.

Both can coexist. Demand Gen feeds the top of the funnel. Search and PMax capture the demand that's generated.

Best Practices for Launching Demand Gen

1. Start with lookalike audiences built from your customers. That's your best starting signal.
2. Test single image and carousel in parallel. Let the data decide, not your preferences.
3. Create native visuals. No traditional banner ads. Images that blend into a content feed.
4. Set a budget of $50+/day for the first 4 weeks. The learning phase needs volume.
5. Measure over a minimum of 8 weeks. Top-of-funnel performance can't be judged in 7 days.
6. Fuel the full funnel. Demand Gen alone isn't enough. Run Display remarketing and Search in parallel to capture the demand you generate.

To see where Demand Gen fits among other Google Ads formats, check out our guide to Google Ads campaign types.

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