Google Is Giving Buyers Thousands In Ad Credits to Spend On AI-Powered Demand Gen

Google is offering advertisers credits and free ad space to drive adoption of its AI-powered automated media buying tool, Demand Gen.

ADWEEK spoke to five advertisers across media agencies and brands who said Google has been aggressively pushing Demand Gen over the past year. Launched in 2023, Demand Gen selects advertisers’ best-performing video and image ads and serves them across YouTube, YouTube Shorts, Google Discover, and Gmail.

Two of those sources were offered ad credits recently, with one being offered $20,000 worth of free ad spend in credits to test Demand Gen over two months.

“It’s really an enticing offer,” the first ad buyer at a media agency said. “Google is continuing to push advertisers to Demand Gen whether they want to or not. Google reps are offering free credits, sending out marketing materials, and always including Demand Gen in their recommendations.”

Michael Lisovetsky, co-founder of ad agency Juice, said Google has offered ad credits intermittently over the past year, with the terms varying depending on brand type and budget.

“In some cases, Google is offering a dollar-for-dollar credit—if advertisers spend $5,000, they’ll receive $5,000 back—but in some cases, it’s only providing ad credits instead of a full match,” Lisovetsky said.

Google did not comment directly on the credits offered to advertisers.

But at least four sources contacted for this story are calling Demand Gen another ‘black box’ that, in some cases, performs worse than Performance Max–Google’s AI media buying tool that judges where budgets should be spent across Google’s properties, including search, YouTube, and the Google display ad network.

For years, Google has pushed advertisers to use Pmax to drive conversions within its ad ecosystem, shaking up its sales strategy to encourage more spend, and gradually offering buyers—who have groused about its opacity—more control. 

A ‘black box nightmare’

A paid media executive at a finance-related brand testing Demand Gen described it as a “black box nightmare” with no visibility into where ads are placed. The buyer spent $380 on Demand Gen campaigns over the past two weeks but could only trace $0.65 of that spend to specific placements.

“Only 1/100th of the total spend is traceable to specific placements,” the executive said. “It’s worse than Performance Max for tracking spend… and Pmax is already awful.”  

Performance for Demand Gen campaigns run by agency VML has been inconsistent across multiple brands, according to Miki DeHaven, the agency’s media director.

But others are noticing the experience is becoming more refined. “When we first used Demand Gen, it was dead on arrival,” Lisovetsky said. “Campaigns wouldn’t perform and advertisers would lose money. But there’s been an improvement in the last year.”

Expanding Demand Gen to ‘new levels of murkiness’

Sources note that the incentives coincide with the announcement that Demand Gen inventory is expanding into Google Display Network (GDN), a collection of about 2 million sites, apps, and videos where advertisers can buy ads. Buyers have said GDN includes lower-quality inventory due to its reliance on AdX, rather than offering access to multiple SSPs like rival buy-side platforms.

While opting out of GDN inventory is possible, the first buyer noted that they cannot cherry-pick individual sites upfront and usually only realize the lower-quality placements after running campaigns for a while—at which point they have to manually exclude those sites.

“It takes most advertisers a while to figure it out before excluding those sites and can be time intensive,” the buyer said. 

Four ad buyers were told by their Google reps to use Demand Gen for lower-funnel conversions, particularly after Google announced it will replace Video Action Campaigns (VAC)—which drive conversions in YouTube—with Demand Gen campaigns, starting in Q2 2025.

“There’s no transparent report for Demand Gen as far as how much you’re running in Gmail or the search feed versus YouTube,” a second ad buyer at an independent agency told ADWEEK. “The VAC product has its own murkiness, and Demand Gen will take that murkiness to new levels—it’s going to be running in other Google O&O services that VAC wasn’t running in before.”

With this update, the buyer described Demand Gen as the most “blank-check” product in adtech, as Google will be “effectively monetizing its vast inventory with fewer restrictions on yield.”

A Google spokesperson said Demand Gen supports a “wide array of business objectives,” allowing advertisers to tailor campaigns to their goals and see results. According to a Nielsen MMM meta-analysis in the U.S., Demand Gen delivers, on average, 58% higher ROAS than VAC, the spokesperson added.