Demand Gen Best Practices: 4 Steps to 40% More Conversions

Google Ads · Demand Gen · February Drop

4 Demand Gen Best Practices That
Unlock 40% More Conversions

By JJ Lab 8 min read February 24, 2026

Google's internal analysis of Demand Gen campaigns from April 2024 to December 2025 reveals a clear finding: advertisers who adopt all four core best practices see over 40% more conversions. Here is exactly what to implement.

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Demand Gen · February 2026

+40%More conversions with all 4 practices

+50%ROAS uplift — Cropp case study

4Best practices to implement

Apr–Dec2024–2025 internal data

4 best practices · 40% more conversions

📋 Table of Contents

Why Most Demand Gen Campaigns Underperform — And How to Fix It
Best Practice 1 — Let AI Expand Your Audience Beyond the Obvious
Best Practice 2 — Configure Bidding and Budget for AI Efficiency
Best Practices 3 & 4 — Creative Quality and Data Strength
Frequently Asked Questions

Section 01

Why Most Demand Gen Campaigns Underperform — And How to Fix It

Demand Gen is one of the most powerful tools in Google Ads for reaching high-potential customers across YouTube, Discover, and Gmail. But most advertisers are extracting far less performance than the platform can deliver — because they are adopting some best practices but not all of them.

ℹ The Research Behind This

Google's internal analysis covering April 2024 to December 2025 found that advertisers who adopted at least three of the four Demand Gen campaign best practices saw on average more than 40% more conversions compared to those who did not. The 40% figure is a minimum — campaigns adopting all four practices consistently outperform this baseline.

+40%more conversions with 3+ best practices

4best practices to implement

Apr 2024–Dec 2025internal data period

The four best practices span audiences, bidding, creative, and data — and they compound. Implementing one helps. Implementing all four unlocks the full performance potential of the Demand Gen platform.

Section 02

Best Practice 1 — Let AI Expand Your Audience Beyond the Obvious

The most common limitation in Demand Gen campaign performance is audience setup that is too narrow. Manually defined interest lists and remarketing segments limit the AI's ability to find and convert high-potential customers who do not fit your existing audience profile.

Google recommends three audience levers that work together to maximise AI-driven discovery:

Optimised Targeting

Allows Google AI to go beyond your defined audiences to find additional high-converting users. This is the most impactful single audience setting for Demand Gen — and the most commonly disabled by advertisers who do not understand how it works.

Lookalike Audiences

Based on your Customer Match lists or website visitors, Lookalike audiences allow Google AI to find users with similar behaviour patterns and intent signals. The stronger your first-party data input, the better your Lookalike audience quality.

New Customer Acquisition Goals

Tells Google AI to prioritise finding users who have not previously converted with your business — essential for growth-focused campaigns where expanding your customer base matters more than re-engaging existing customers.

Section 03

Best Practice 2 — Configure Bidding and Budget for AI Efficiency

Demand Gen campaigns need two things from their bidding and budget setup: the right bidding strategy to optimise toward business outcomes, and adequate budget for the AI to generate statistically meaningful learning signal.

Bidding Strategy

tCPA or tROAS — Not Manual CPC

Target CPA bidding optimises for conversion volume at your target cost. Target ROAS bidding optimises for revenue value at your target return. Both are dramatically more effective than manual CPC or maximise clicks for Demand Gen — because they give Google AI a business outcome to optimise toward, not just a traffic metric.

Budget Planning

Use Performance Planner

Performance Planner models the relationship between budget level and expected conversion volume for your specific account. Under-budgeted Demand Gen campaigns are in constant learning mode — never accumulating enough data for AI bidding to optimise effectively. Performance Planner prevents this.

Section 04

Best Practices 3 & 4 — Creative Quality and Data Strength

The final two best practices address the inputs that Google AI bidding needs to make smart decisions: creative signals and data signals.

Best Practice 3: Achieve Excellent Ad Strength

Ad Strength in Demand Gen measures the quality and diversity of your asset set. Campaigns with Excellent Ad Strength give Google AI the maximum flexibility to assemble and test creative combinations — matching the right assets to the right audience at the right moment. Campaigns with Poor or Average Ad Strength constrain the algorithm.

ℹ Cropp Case Study

Polish fashion retailer Cropp followed Demand Gen best practices — including Excellent ad strength and recommended audience solutions — and achieved a 50% ROAS uplift in online sales. The combination of creative quality and audience signal quality produced compounding results.

Best Practice 4: Build a Reliable Data Foundation

Demand Gen performance depends on data quality at every level. Google recommends two foundational implementations:

Implement sitewide tagging using Google Tag Gateway for Advertisers — ensuring every conversion is captured and attributed accurately
Connect offline conversion sources to Data Manager — critical for businesses where meaningful conversions (calls, in-store visits, CRM entries) happen outside digital tracking

Google Ads · Insights 2026

Want Demand Gen Set Up The Right Way?

JJ Lab configures Demand Gen campaigns with all four Google-recommended best practices — audiences, bidding, creative, and data — for Malaysian businesses ready to scale.

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FAQ

Frequently Asked Questions

What are the four Demand Gen best practices Google recommends?

The four best practices are: (1) Audiences — enable optimised targeting, Lookalike audiences, and new customer acquisition goals; (2) Bid and Budget — use tCPA or tROAS bidding with Performance Planner for budget setting; (3) Creative — achieve Excellent Ad Strength with a diverse, high-quality asset set; (4) Data Strength — implement sitewide tagging with Google Tag Gateway and connect offline sources to Data Manager.

How much can I expect conversions to increase with all four best practices?

Google's internal analysis from April 2024 to December 2025 found that advertisers who adopted at least three of the four best practices saw on average over 40% more conversions. This is an average — individual results depend on account maturity, vertical, budget level, and prior campaign configuration. Cropp, for example, achieved a 50% ROAS uplift.

What is optimised targeting in Demand Gen and should I enable it?

Optimised targeting allows Google AI to go beyond your manually defined audience segments to find additional users who are likely to convert. It is one of the highest-impact settings in Demand Gen — and is disabled by many advertisers who misunderstand it as losing control. In practice, enabling optimised targeting consistently improves conversion volume and efficiency.

What budget level does Demand Gen need to perform?

Demand Gen campaigns need enough budget to exit the learning phase and accumulate statistically meaningful conversion data. Google recommends using Performance Planner to model the relationship between budget and expected conversions for your specific account. As a general principle, campaigns generating fewer than 50 conversions per month are too data-sparse for AI bidding to optimise effectively.

Why does Ad Strength matter for Demand Gen performance?

Ad Strength measures the quality and diversity of your asset set. Google AI assembles and tests different creative combinations to find what works best for different audience segments and contexts. Excellent Ad Strength gives the algorithm maximum flexibility to do this — Poor or Average Ad Strength means fewer combinations available, less testing, and lower performance ceiling.

4 Demand Gen Best Practices ThatUnlock 40% More Conversions