Google is rolling out changes to how standard Performance Max and Shopping campaigns compete in ad auctions, starting in October.

Key changes:

• Performance Max will no longer automatically prevail over standard Shopping campaigns
• The highest ad rank will now determine which ad will show for overlapping campaigns.
• Aligns these campaigns with the bidding behavior of other campaign types.

Why we care. This update changes the way Shopping Performance Max and Standard campaigns compete, which could significantly impact campaign strategies and performance during one of the most crucial sales periods of the year. The update provides more flexibility but requires fine-tuning to maximize the success of holiday campaigns.

In figures:

• Performance Max generated 17% higher ROAS than AI-powered social campaigns during the peak holiday period of Q4 2023 (according to TransUnion study)

Between the lines. Google aims to provide more flexibility and simplify testing while maintaining or improving performance at the account level.

What they say. Google expects this change to have a “neutral or positive impact on account-level performance.”

This update was shared by Mike Ryan, Head of Ecommerce Insights at Smarter Ecommerce, on X where he noted “Google is making such healthy choices lately that I’m actually worried”:

What to watch:

• How advertisers are adjusting their budgets and targets in response
• Impact on campaign management strategies

Best practices for advertisers:

• Adjust budgets and goals as needed
• Make sure Performance Max campaigns follow the fundamentals:
  • URL extension
  • Strong asset groups
  • Quality creations and videos

The big picture. This update aligns with Google’s push for AI-driven advertising while providing more control to advertisers.

Conclusion. Advertisers should prepare to refine their strategies to capitalize on these changes during the holiday shopping season.