How Performance Max is Transforming Google Ads ROI in E-Commerce
Introduction
Performance Max has become a widely adopted tool for e-commerce brands, offering an automated, cross-channel approach to digital advertising. However, the key question remains: how well does it perform over time?
Over the past three years, real-world data from Google Ads has provided valuable insights into how Performance Max affects core advertising metrics, including cost per conversion, cost-per-click (CPC), and return on ad spend (ROAS). While Google's automation plays a key role in optimising these campaigns, advertisers still need to provide strong audience signals, conversion tracking, and creative assets to drive sustained improvements. These trends have helped businesses refine their strategies, optimise ad spend, and improve overall campaign efficiency.
At EPM Agency, we have worked with a range of e-commerce brands to scale their Google Ads performance through Performance Max. By analysing three years of campaign data, we have identified clear patterns in ad efficiency, automation effectiveness, and budget allocation.
This analysis explores how Performance Max has evolved, its impact on digital advertising strategies, and the adjustments businesses need to make to maximise ROI in an increasingly competitive landscape.
What is Performance Max and Why It Matters
Performance Max is Google’s fully automated campaign type designed to run across Search, Display, YouTube, Gmail, and Discover from a single campaign. It simplifies ad management by using machine learning to determine the best combination of placements, creatives, and bids to maximise conversions.
Rather than relying on manual targeting and budgeting, advertisers supply creative assets, audience signals, and conversion goals. Google's algorithm then dynamically allocates spend across platforms based on real-time performance data. This allows Performance Max to prioritise the placements and audiences most likely to convert, while continuously refining its approach using behavioural signals and intent data.
For e-commerce brands, this means reaching potential customers earlier and more often in their buying journey—without needing to split budget and management across multiple campaigns. While automation handles the heavy lifting, success depends on strong audience inputs, accurate conversion tracking, and high-quality assets.
By offering unified reporting and cross-channel reach, Performance Max provides a scalable, efficient solution for businesses looking to grow online with less manual overhead—provided they stay hands-on with strategy and refinement.
Why E-Commerce Brands Are Embracing Performance Max
For many e-commerce businesses, Performance Max offers a way to simplify campaign management while expanding advertising reach. Instead of managing separate campaigns for each Google channel, advertisers can streamline delivery across Search, Display, YouTube, Gmail, and Discover within a single automated workflow.
The campaign type is particularly suited to businesses adapting to the shift away from third-party cookies. With strong first-party data inputs, Performance Max enables personalised targeting and better allocation of ad spend based on actual customer behaviour.
While automation helps scale efficiently, brands still benefit from monitoring budget distribution and performance insights—especially through tools like custom placement reports. When used strategically, Performance Max can drive more efficient conversions and improve return on ad spend with less manual overhead.
Performance Max in Practice: 3 Years of Data
Over the past three years, we’ve tracked the performance of Performance Max campaigns across key metrics including cost-per-click (CPC), cost per conversion, and return on ad spend (ROAS). The data reveals how campaign structure, creative quality, and strategic adjustments directly impact results over time.
2022: Establishing Baselines
ROAS: 3.30 | CPC: £0.32 | Cost per conversion: £21.71
Early testing focused on audience signals and asset group setup. Automation drove solid results, though placement control and reporting were limited.
2023: Responding to Competition
ROAS: 3.39 | CPC: £0.32 | Cost per conversion: £26.30
Increased advertiser adoption led to higher acquisition costs. Performance improved with refined audience targeting, creative testing, and bid strategy tweaks.
2024: Optimised Efficiency
ROAS: 3.73 | CPC: £0.33 | Cost per conversion: £18.53
More advanced segmentation, stronger creative, and tighter bid control delivered the best performance to date—proving the value of continuous optimisation.
The year-on-year trend is clear: Performance Max delivers the strongest results when paired with thoughtful campaign structure, ongoing testing, and proactive management.
3 Key Lessons for ROI Success
Three years of Performance Max data have shown that long-term success depends on continuous optimisation and strategic adjustments. Businesses that take an active role in refining campaigns, improving creative assets, and applying manual oversight see the strongest results.
- Optimisation Takes Time – The first year required extensive testing to understand how Google's automation would allocate budget, optimise placements, and adjust bidding strategies. Businesses that refined audience signals and asset groups early on gained a competitive edge.
- Manual Adjustments Still Matter – While Performance Max automates much of the process, bid strategy overrides, audience exclusions, and performance monitoring have been critical in reducing wasted spend and improving overall profitability.
- Creative Assets Are Critical – Google prioritises high-quality visuals, particularly across Display and YouTube. Investing in strong product imagery, well-structured video ads, and continuous creative testing has driven better engagement and reduced acquisition costs.
Businesses that refine their campaign structure, audience targeting, and creative approach year after year see the strongest results.
In the next section, we explore the strategies that drive Performance Max success and how advertisers can apply them to their own campaigns.
Applying the Lessons: 3 Practical Strategies
1. Prioritise High-Quality Creative
Performance Max assembles ads dynamically, but results depend on the quality of your inputs. Strong product imagery, engaging video, and varied headlines give Google’s AI the flexibility to deliver better-performing ad combinations.
2. Combine Automation with Manual Refinement
While automation handles bidding and placement, human oversight is still essential. Use audience exclusions, review placement data, and adjust ROAS targets strategically to reduce wasted spend and improve efficiency.
3. Scale Budget Gradually and Flexibly
Avoid sudden increases in ad spend. Incremental budget changes and dynamic ROAS targets—adjusted for seasonality and demand—help maintain performance and avoid disruption as campaigns grow.
Looking Ahead: What’s Next for Performance Max
Google is enhancing Performance Max with AI-driven creative tools, making it easier for advertisers to produce high-performing assets. Future updates may introduce automated asset testing and improved video ad capabilities, further reducing the creative barrier for businesses looking to scale their campaigns.
As Google enhances its machine learning capabilities, advertisers need to stay ahead of key trends. From advanced AI-driven bidding strategies to a greater reliance on first-party data, the future of Performance Max will be shaped by automation, audience insights, and creative innovation.
Conclusion & Next Steps
Performance Max has the potential to deliver strong returns—but only when paired with the right strategy, creative, and continual optimisation. Advertisers that stay hands-on with testing, targeting, and budget management consistently outperform those relying on automation alone.
At EPM Agency, we help businesses get more from Performance Max with tailored audits, strategic campaign structures, and support for creative and bidding improvements.
Ready to Get More from Google Ads?
Performance Max can unlock powerful returns—if your campaigns are structured and optimised the right way.
Book a tailored Google Ads audit with EPM Agency and uncover opportunities to improve targeting, bidding, creative and conversion efficiency.
