YouTube Video Action Upgrades to Demand Gen Campaigns

In Q2 2025, Google Ads will upgrade YouTube Video Action Campaigns (VAC) to Demand Gen, with upgrades to inventory, reach, creative flexibility and enhanced audience targeting across YouTube, discovery and Gmail. The shift is aimed at enhancing advertisers’ ability to capture emerging demand and drive growth in a multi-format approach.

What is Demand Gen?

Demand Gen will supersede VAC formats like Performance Max did with Smart Shopping. This change represents another step in the consolidation of Google’s suite of campaign types and the development of another heavily AI-driven campaign type.

Demand Gen will inherit VAC’s ability to optimize toward conversions or conversion value while adding the capability to optimize toward clicks. Both the name of the campaign type and the ability to optimize toward clicks signal that this campaign may target higher in the funnel than VACs.

It will be the only Google product to leverage lookalike audience targeting, emphasizing the importance of first-party data. While it’s not new for first-party features to emerge, this could be a double-edged sword for advertisers. On one hand, it’s exciting to have lookalike audiences back to target high-intent users after their use was sunsetted in spring of 2023. On the other hand, arguably the most sought-after feature will not be able to be used as intended without high-quality first-party data, which should be a consideration when planning to test Demand Gen campaigns.

Testing into Demand Gen

Moving forward, Rain the Growth Agency recommends VAC-heavy advertisers start testing Demand Gen with video assets only to familiarize themselves with how to use this campaign type’s unique features to positively impact their business results.

Within YouTube inventory, advertisers can set creative surface preferences between YouTube Shorts, In-Stream, and In-Feed to increase the likelihood of serving in the desired surface. VACs did not give advertisers the ability to select which format they would prefer to serve on. This new ability for conversion-focused video campaigns paves the way for impactful creative strategies, such as introducing your brand to a new audience on Shorts while converting on that new awareness with In-Stream and In-Feed inventory.

Once comfortable with Demand Gen’s features on YouTube, advertisers can opt to include image assets, which can serve as carousel or image-only ads. For advertisers with a robust social media strategy, this presents an intriguing possibility in that Google’s visually rich approach to Demand Gen can be a complement to their social media strategy.

Our teams firmly believe in testing Demand Gen to give our clients a head start in leveraging these tools and understanding their impact on their business to drive stronger, more efficient results before competition catches up.

This latest update represents a strategic move to meet evolving consumer expectations following ad format and inventory preferences.

The timeline for the change follows suit:

• Early 2025: Google will launch a migration tool for manual upgrades from VAC to Demand Gen.
• March 2025: Google Ads will disable creation of new VACs.
• Q2 2025: Automatic upgrades of all remaining VACs to Demand Gen will occur.

This article is featured in Media Impact Report No. 58. View the full report here.