Google offers buyers thousands in ad credits to spend on Demand Gen in bid to drive adoption

The news: Google is offering buyers thousands of dollars worth of ad credits for its AI-powered Demand Gen tool in a push to encourage widespread adoption, per Adweek.

• One source was reportedly offered $20,000 in credits to test the tool for two months.
• Demand Gen aims to improve upon Google’s other AI-powered tools. Demand Gen campaigns have a 58% higher ROAS than Video Action Campaigns, which it will replace in Q2 2025.

This news coincides with Google’s announcement that it is expanding Demand Gen to include inventory from Google Display Network, a hub for websites, videos, and apps where brands can purchase ads.

• Google is hoping that familiar ad space and quality-of-life improvements can build advertiser trust in Demand Gen.
• 63% of marketers used generative AI tools as of March 2024, with only 3% having no plans to use genAI within 18 months, per Salesforce. Increasing reliance on AI could bode well for Demand Gen.

Zooming out: Google’s AI-powered solutions are a key part of how the company plans to grow its revenue to outpace competitors like Meta. Consumer-facing products like genAI search have an enormous lead over competitors, generating 30 times more traffic than ChatGPT in December 2024.

• Google has been working to make AI solutions like Demand Gen more appealing and easier to use. One recent feature allows advertisers to automatically generate short-form videos from existing ads to engage diverse audiences at lower cost.

Yes, but: While some sources noted improvements to Demand Gen in the last year, advertisers still have many issues with the tool.

• At least four Adweek sources referred to Demand Gen as a “black box” that often performs worse than Google’s AI media buying tool Performance Max for tracking spending because of a lack of visibility into where ads are placed.
• Many advertisers only discovered issues with ad placements after a campaign had already started, delaying their ability to exclude low-performing sites and adding to their frustration. Some advertisers said they felt Google’s ad credit offer was low-effort.

Our take: Google’s shift to prioritize Demand Gen despite mixed feedback shows its ongoing efforts to integrate AI into its ad products.

• The tool might be most effective when used for low-funnel conversions when customers are already close to a purchase decision. It may also help as a resource for marketers who are increasingly looking to AI tools to automate processes like audience targeting and ad placement.

Despite advertisers’ issues with Demand Gen, it could eventually flourish given the rise of genAI in marketing, with 61% of organizations planning to make a significant investment in genAI in the next two years. With Google’s ongoing efforts to improve the tool and its persistence in the AI market, Demand Gen is likely here to stay.