AMBASSADOR MARKETING

Performance Max vs Smart Shopping: What’s the Real Difference?

If you’ve been running Google Shopping ads, you’ve likely already felt the shift. Performance Max didn’t just replace Smart Shopping, it redefined how e-commerce brands run product ads across Google’s networks.

In fact, over 90% of brands using Google Shopping listings have now moved to Performance Max, making it the new standard for automation-driven campaign performance.

But what actually changed? And is the switch helping brands grow, or just complicating campaign management?

In this blog, we’ll break down:

• How Performance Max differs from Smart Shopping in terms of reach, control, and creative flexibility
• The pros and cons of each campaign type, including real-world performance stats
• Best practices for structuring and optimizing Performance Max campaigns

P.S. Struggling to get real ROI from Performance Max? inBeat Agency helps ecommerce brands turn messy campaign setups into scalable growth engines. From audience targeting to performance-driven creatives, we align every move with what actually converts. Book your free strategy call now. Let’s build campaigns that perform.

TL;DR:

Performance Max (PMax) has fully replaced Smart Shopping: Google auto-upgraded campaigns in 2022, preserving history and delivering ~12 % more conversion value at equal or better ROAS.

Reach & inventory: PMax spans Search, Display, YouTube, Gmail, Maps, and Discover, giving wider exposure than Smart Shopping’s older mix of Search, Display, Gmail, and limited YouTube.

Creative control: PMax uses asset groups, headlines, images, videos, product feed, so you craft richer, intent-matched ads; Smart Shopping relied only on Merchant-Center feed content.

Targeting power: PMax lets you seed AI with audience signals (first-party lists, look-alikes, app users) while Smart Shopping offered zero audience input.

Goal flexibility: PMax optimizes for multiple outcomes (online sales, leads, store visits, promotions), whereas Smart Shopping focused solely on product-sale conversions.

Reporting depth: PMax surfaces asset-level metrics and audience insights; Smart Shopping exposed only basic campaign-level ROAS/CPA data.

Pros of PMax: broader reach, stronger AI automation, granular audience guidance, creative variety, richer insights, brands like Joybird saw +95 % revenue and +40 % ROAS.

Cons of PMax: limited placement transparency, fewer manual bid levers, learning-phase volatility, harder controlled testing.

Smart Shopping’s legacy pros/cons: ultra-simple setup and clear shopping focus, but hamstrung by narrow placements, scant data, no creative or targeting flexibility.

Best-practice tips for PMax: supply diverse high-quality assets (video lifts conversions ~12 %), add robust audience signals, group assets by user intent, use custom labels for margin or seasonality, audit performance often, and pair with Search campaigns for lower CPA and higher ROAS.

Bottom line: PMax is a bigger, smarter engine, demanding more strategic inputs yet rewarding brands with larger audiences, sharper optimization, and scalable growth.

What is Smart Shopping?

Smart Shopping was Google’s way of streamlining e-commerce ads. Instead of running separate campaign types like standard shopping campaigns and display ads, advertisers could launch a single campaign that automatically promoted product ads across the Google Search Network, Display Network, Gmail, and YouTube (to a limited extent).

Everything was built off your Google Merchant Center feed. Google pulled product titles, descriptions, and images to generate dynamic ads with almost no manual input.

But you had very little control. You couldn’t add audience signals, adjust bids manually, or exclude search terms using negative keywords.

While this level of automation helped drive conversions for businesses with smaller teams or simpler goals, the limited insights and control made it harder to scale or optimize based on performance data, product segmentation, or user behavior.

What is Performance Max?

Performance Max (PMax) takes what Smart Shopping started and pushes it further. It’s a fully AI-driven campaign type that runs across Google Search, Display, YouTube, Gmail, Maps, and Discover all from a single campaign. Unlike Smart Shopping, it lets you add audience signals, customize creative assets, and optimize for multiple conversion goals.

The automation is smarter, the reach is broader, and the control, while still limited, is better than before. For e-commerce businesses ready to scale beyond basic product ads, Performance Max offers a more advanced, flexible solution.

Transition from Smart Shopping to Performance Max

In 2022, Google began automatically upgrading all Smart Shopping and Local campaigns to Performance Max. The rollout was gradual, but by the end of the year, Smart Shopping was fully retired. Advertisers didn’t need to rebuild campaigns from scratch; existing settings and historical data were preserved during the upgrade.

However, the transition was sometimes not 100% seamless. In practice, some campaign behaviors changed and advertisers had to reconfigure asset groups and audience signals, which didn’t always map perfectly from Smart Shopping.

But the transition wasn’t seamless. Performance Max introduced a new structure with asset groups, audience signals, and broader channel reach.

Advertisers had to rethink their approach, especially those used to Smart Shopping’s hands-off setup. They needed to clarify goals, expand creative assets, and refine audience strategies. The upgrade brought stronger automation, but also demanded a better grasp of campaign settings and performance optimization.

“Based on early testing, advertisers who upgrade Smart Shopping campaigns to Performance Max see an average increase of 12% in conversion value at the same or better return on ad spend (ROAS). “ Eduardo Indacochea - Senior Director, Product Management, Google Ads

Key Differences Between Performance Max and Smart Shopping

Now that we’ve covered what each campaign type was designed to do, let’s break down the real differences, especially since Performance Max has officially taken over.

1. Channel Reach and Ad Placements

Smart Shopping campaigns were limited in where they could show your ads. They covered the basics: Google Search, Display, Gmail, and YouTube (in a limited way). But advertisers had no say in where ads appeared, and no access to newer placements.

Performance Max expands that reach significantly. It runs across Google’s entire inventory, including Maps and Discover, in addition to everything Smart Shopping once covered. This means your creative assets and product feed can reach a wider audience across more surfaces.

2. Asset Management and Creative Control

One of the biggest upgrades in Performance Max is how it handles creative assets. Instead of relying only on your product feed like Smart Shopping did, Performance Max introduces asset groups.

These let you upload a mix of headlines, descriptions, images, videos, and even audience signals all of which Google’s AI uses to build dynamic, personalized ads across every channel.

Smart Shopping gave you almost no creative control. It pulled content directly from your Merchant Center feed and served basic product ads with minimal variation.

With Performance Max, you’re not locked into static formats. You can tailor ads by audience intent, product category, or campaign goals, giving ecommerce businesses far more room to shape the message and improve ad relevance.

3. Audience Targeting Capabilities

Smart Shopping left targeting entirely in Google’s hands. You couldn’t define who saw your ads or guide the system with customer lists, audience segments, or user behavior data. It was fully automated, which worked for basic campaigns, but made it harder to reach specific audiences or optimize based on intent.

Performance Max changes that. It lets you add audience signals, including first-party data, lookalike audiences, app user lists, and custom segments.

While the AI still makes final decisions, you now have a say in shaping your audience strategy. This added layer gives ecommerce businesses better alignment between campaign goals and real user behavior, something Smart Shopping never offered.

4. Campaign Goals and Objectives

Smart Shopping was built with one thing in mind: drive sales. It focused on clicks and conversions for product ads, which worked well for many e-commerce businesses, but that was about it. If you wanted to run campaigns for lead generation, local promotions, or app traffic, Smart Shopping couldn’t help.

Performance Max is far more flexible. It supports multiple conversion goals, including online sales, lead submissions, website visits, in-store visits, and promotions.

You can align each campaign with a specific objective or run separate campaigns for each one. This shift allows marketers to match campaign goals more closely with broader business goals, not just short-term revenue.

And that flexibility in goals is one reason why many advertisers are seeing stronger performance across verticals.

For example, advertisers using Performance Max across different verticals report an average increase of 27% in conversions or conversion value at a similar CPA or ROAS.

5. Reporting and Insights

Reporting was one of Smart Shopping’s biggest weak spots. You could track general performance like sales conversions and return on ad spend, but you couldn’t see which audiences, search terms, or creative assets were actually driving results. That lack of visibility made it harder to refine your advertising strategy or test new ideas.

Performance Max gives you more to work with. You can track asset group performance, review audience insights, and get a better view of how each creative asset contributes to campaign performance.

While it's still not full transparency, it's a major improvement. For performance marketers and ecommerce brands that rely on accurate data to optimize, these deeper insights offer a clear advantage over Smart Shopping’s limited reports.

Pros and Cons of Performance Max & Smart Shopping

Every campaign type has trade-offs. Now that Smart Shopping is gone and Performance Max is the default, it’s important to understand what you’re gaining and what you might be giving up.

Here's a quick breakdown of the pros and cons, so you can plan your next campaign with clarity.

Performance Max Pros

Many e-commerce businesses are seeing stronger results with Performance Max. For example, after switching from Smart Shopping, Joybird, a furniture ecommerce brand, reported a 95% increase in revenue and a 40% increase in ROAS.

• Broader reach across multiple channels, including Maps and Discover.
• Enhanced automation and AI-driven optimization.
• Advanced audience targeting using first-party data, customer lists, and audience signals.
• Better creative flexibility with asset groups and varied ad formats.
• More detailed reporting through audience insights and asset-level performance.

Read Next: Max ROI, Minimal Effort: Optimizing Google Performance Max Campaigns

Performance Max Cons

• Less transparency in reporting, especially around search terms and individual placements.
• Limited control over where your ads appear and how bids are adjusted
• Harder to test campaign changes due to Google’s automation feature.
• Learning phase can take time, and results may fluctuate early on.

Smart Shopping Pros

• Simplified setup and easy management, great for beginners or smaller teams.
• Focused entirely on shopping ads, making campaign goals clear and direct.
• Straightforward reporting with basic metrics like sales conversions and ROAS.
• Minimal effort required to launch and run a single campaign.

Smart Shopping Cons

• Limited channel reach, no access to Maps, Discover, or advanced YouTube placements.
• Less flexibility in targeting, with no support for audience signals or custom segments.
• Restricted creative control, ads were built solely from the product feed.
• No visibility into search terms, placements, or user behavior.
• Difficult to scale or refine campaigns due to limited insights and automation lock-in.

Best Practices for Performance Max Campaigns

If you’re ready to take full advantage of Performance Max, here are some best practices to guide your strategy.

1. Use Diverse and High-Quality Creative Assets

Performance Max relies heavily on creative assets to build ads across multiple channels, including Search, YouTube, Display, Gmail, and more. The more variety you give it, the better the system can match your ads to different user intents and placements. Don’t just upload one image and a generic headline.

Add videos, product images, multiple headlines, and strong descriptions. Brands that include at least one video asset see around 12% more incremental conversions compared to video-free setups, which shows how much impact rich media can have.

This gives Google’s AI more combinations to test, which helps improve ad relevance and conversion rates.

2. Implement Audience Signals for Better Targeting

Audience signals help guide Google’s AI toward the right people faster. As we already mentioned, you can add first-party data, customer lists, lookalike audiences, and even app user segments.

While Performance Max still automates the final targeting, feeding it these signals improves early learning and increases conversion accuracy. It means steering your ads toward high-intent users from day one. The better your inputs, the smarter your advertising efforts become.

P.S. Worried you're leaving conversions on the table? A top-tier Google Ads agency can help you unlock the full potential of Performance Max. See the top Google Ads agencies to work with.

3. Structure Asset Groups by Intent, Not Product Type

Instead of grouping your ads by product category, group them by user intent, like “gift seekers,” “deal hunters,” or “ready to buy.” This helps Google match the right creative with the right stage of the buying journey. It also makes your messaging more relevant, which improves engagement and drives better conversion rates across different audience segments.

4. Use Custom Labels to Guide Smart Bidding

Custom labels let you tag products based on things like profit margin, seasonality, or stock levels. This gives Google’s bidding algorithm more context on what to prioritize.

For example, label high-margin or clearance items so the system pushes them harder. It’s an easy way to align your business goals with how Performance Max allocates budget and bidding effort.

5. Regularly Monitor and Adjust Campaigns Based on Performance Data

Performance Max is automated, but that doesn’t mean set-it-and-forget-it. Keep a close eye on asset group performance, conversion values, and audience insights. If certain creatives or products underperform, swap them out.

Adjust your budget based on what’s actually driving results. Regular reviews help you catch wasted spend early and keep your campaign goals aligned with real-time performance.

6. Combine Performance Max with Search Campaigns

While Performance Max is powerful on its own, many advertisers see the best results when combining it with complementary Search campaigns.

Some report up to a 32% drop in cost per acquisition and a 3× higher ROAS. This proves that a well-structured account strategy often beats isolated campaign performance.

Power Your Growth with inBeat’s Performance Max Experts

Performance Max isn’t just a replacement for Smart Shopping; it’s a complete shift in how Google approaches automation, targeting, and campaign structure. While the switch requires learning and adaptation, it also opens new opportunities to reach more relevant users with greater control and performance insights.

Key Takeaways

• Performance Max replaces Smart Shopping as the default campaign type for Google Shopping ads.
• It offers broader channel coverage, including Maps, Discover, and advanced YouTube placements.
• Advertisers can upload creative assets and use asset groups for better personalization.
• Audience signals allow you to guide targeting using first-party data and custom segments.
• Campaigns can now support goals beyond sales, like lead generation or store visits.
• Smart Shopping offered simplicity, but lacked transparency and targeting flexibility.
• Structuring campaigns by intent, not product type, improves conversion performance.
• Regular performance reviews and asset updates are essential to make automation work effectively.

If you want better results from your Google Ads efforts, instead of wasting budget on autopilot setups, inBeat Agency can help. We combine data, creative, and performance insights to build campaigns that convert.

Book your free strategy call today. Let's grow your brand with a smarter approach.

FAQ’s

What is the difference between Smart Shopping and Performance Max?

Smart Shopping was limited to product ads across Search, Display, Gmail, and YouTube. Performance Max offers broader reach, including Maps and Discover, plus more control over creative assets, audience signals, and campaign goals. It’s a more advanced, AI-powered campaign type that replaced Smart Shopping in 2022.

What is the main difference between Performance Max and Standard Shopping?

Standard Shopping campaigns require manual bidding and offer limited automation. Performance Max uses AI to manage bidding, placements, and audience targeting across all Google channels. It also supports asset groups and broader campaign objectives, giving you a more complete advertising solution than Standard Shopping.

How is Performance Max different?

Performance Max runs a single campaign across Search, Display, YouTube, Gmail, Maps, and Discover. It lets you use creative assets, first-party data, and custom audience signals to reach high-intent users. It’s designed to optimize for conversions and scale your campaign performance with less manual work.

Is Performance Max better than search?

Performance Max isn’t a replacement for Search; it complements it. If you're focused on reaching a wide audience with automated targeting and dynamic ads, Performance Max is ideal. For keyword-specific control and text-based ads, Search campaigns are still effective. Many advertisers use both to maximize performance.