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Microsoft Advertising Launches Performance Max (PMax) Campaigns

Updated: Jun 5

Microsoft Advertising launched Performance Max (PMax) campaigns globally on March 5th. This campaign type is now readily available for selection when creating campaigns in Microsoft Advertising.


Microsoft Advertising has launched its AI-powered Performance Max campaign type.

What is Performance Max (PMax)?

Performance Max is an AI-powered campaign type that creates and optimizes ads to reach a brand’s conversion goals across Microsoft Advertising’s search and audience network. Brands provide text, image, and logo assets for the Microsoft AI to select and combine to form ads appropriate to Microsoft Advertising’s different ad channels.


Similar to other Microsoft Advertising campaign types, advertisers can import their PMax initiatives from Google Ads or set them up directly in the Microsoft interface. The set-up process is broadly broken down into three steps:


  1. Performance goals. Advertisers define the conversion types they want, and performance targets.

  2. Creative assets. Advertisers input their text ads, and upload images and logos to be used in ads. The Microsoft AI can also generate asset recommendations that can be included (or edited and included).

  3. Target audience. Advertisers can detail their target audience’s interests, demographics, and upload first-party date. Defining audience signals is optional, the Microsoft AI can learn this piece if needed.


Microsoft Performance Max is powered by AI functionality.

Where do PMax Ads Appear?

At launch, PMax campaigns are distributed across the Microsoft search network and the audience network:


  • Microsoft search network. Microsoft Bing and search engine partners such as Yahoo, AOL and DuckDuckGo, where ads are served reactively depending on user search queries.

  • Microsoft audience network. Microsoft sites such as MSN, Microsoft Edge, Outlook.com, and partner publishers. Native ads are served proactively to users based on their interests and intent signals.


Those familiar with Microsoft Advertising’s ad distribution settings will know there are two options available for search ads – Microsoft sites and select traffic or the entire Microsoft Advertising Network. Microsoft sites and select traffic includes ad placement on Microsoft sites and premium partner sites such as Yahoo.com. Selecting ad distribution across the entire Microsoft Advertising Network means that a brand’s ads will appear on all of Microsoft Advertising’s distribution partner sites. With Performance Max, there is no option to choose between the two ad distributions, indicating that ads can appear on every Microsoft partner depending on Microsoft AI’s predicted performance.


What are the Benefits of Performance Max Campaigns?

The benefits of PMax campaigns are reduced set-up and management time, and greater performance.


Performance Max campaigns are convenient because they allow brands to reach a large audience and automate most of the setup and ongoing optimization. Ads are generated automatically, and placements and channels are selected, in real-time, that are predicted to drive optimal performance.


PMax is ideal for advertisers lacking time or resources to set up and manage these campaigns manually.

 

What are the Risks of Performance Max Campaigns?

Brand safety is a concern, particularly with the distribution set to all Microsoft partner sites. Although website exclusions are supported for Performance Max (aside from premium Microsoft sites that cannot be excluded), full brand exclusions are not available just yet.


Ironically, one of the perceived risks of PMax campaigns is the main benefit. As we see with Google’s Performance Max campaigns, some advertisers may be uneasy with relinquishing control and allowing AI to make decisions on their behalf. Whereas the risk of PMax going off and doing something crazy seems far-fetched, the inability to softly adjust PMax is very real. PMax performance is binary – it is either working or it is not working, and when it is not working, there are very few levers an advertiser can adjust themselves to alter that. Advertisers must hope that the AI fixes the performance (and quickly).


Precision’s Thoughts

Over the last ten years, advertising platforms and advertisers themselves have focused on automation, artificial intelligence, and machine learning to improve performance and drive efficiency.


The explosion of generative AI has added more possibilities to reducing the manual work associated with digital advertising set up and management, and watching the Microsoft AI generate lists of text ads during the set-up of PMax campaigns is truly impressive. Whilst the text is not always perfect, it’s a huge advance and editing is substantially quicker than writing the ads from scratch.


Generative AI coupled with predictive AI feels like the perfect match for digital advertising set up and optimization. Conceptually, Performance Max is very compelling. However, as we have seen with Google’s PMax, performance is not consistently positive. The inability for advertisers to manually adjust PMax, due to its nature, means that Microsoft (and Google) need to optimize more rapidly or predict and communicate better when targets are infeasible.


Our final thought is that AI set up and management is undoubtedly the future. Just as pay-for-performance and auction-based ad buying disrupted online advertising and became the default ad models in the early 2000s, AI-powered set up and management will become default ad execution in the medium to long term. Fewer manual optimization levers will be available, and brands will rely on the platforms’ AI engines to manage ad campaigns.


Advertisers should test PMax and become familiar with this campaign type. It might not consistently perform today, but with more data and signals, and further advances in AI, PMax will improve and it will become the default.

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