This is one of those topics I have been postponing for too long, because I don't have a finalized picture of what things look like. So, since we're all learning together, I decided just to share what I've learned, and then we can pick up the conversation on social media (find me on Twitter or LinkedIn) and you can fill in any gaps I've missed.
Today, I'd like to share what I know about how Google "Dynamic" Ads work in a Shopping Ads context, specifically in regard to Smart Shopping, and how that can perhaps inform us of how they work in a different, but decidedly similar, Performance Max context.
Remember, Performance Max has a lot of differences from Smart Shopping, BUT according to Google (i.e., "what Kirk has been told by Googlers") it does utilize Smart Shopping tech so we shouldn't completely ignore best practices or insights from Smart Shopping Campaigns (SSC). I.e., yes, asset groups are unique to Performance Max, but I'm willing to bet the way Google's ads work are the exact same... and here is my understanding of how that works.
When it comes to Shopping Ads in PMax, there are two basic "dynamic ad" formats. Now, this is different from ad styles, since those can change drastically based on the placement. but with formats, there are really only two options:
1) Dynamic Product Ads
2) Static Ads
With Dynamic Product Ads, Google shows specific products to an audience based on targeting signals it receives.
With Static Ads, Google shows the uploaded assets (or assets from your landing page- this is one of those points that is an assumption I'm making based on memory of what I think I read in some doc somewhere... happy to be corrected) in an ad... so, think a more traditional GDN or YouTube video ad.
One (Dynamic Product Ads) is product focused, and lands the user on that specific product page (PDP).
The other (Static Ads) is the more general ad with assets you have uploaded into the ad group.
How does Google determine which to show, either the dynamic or static product ad in PMax?
Aha! We have arrived at the point of this article.
Over the past couple of years, I have learned from conversation with various Googlers, the following things about Dynamic Ads. The most important thing to understand, is that Dynamic Ads only show up when Google believes it has enough information on a user to make specific product recommendations in the dynamic ad.
This can be through Dynamic Prospecting, or Dynamic Remarketing.
"What's Dynamic Prospecting?!?!" You ask.
With Dynamic Prospecting, Google utilizes different signals such as previous search history to identify a person who has not yet been a website visitor, but whom Google has enough data on to make specific product recommendations in the ads. Some more info from Google:
With Dynamic Remarketing, Google utilizes a cookie on the website to determine which products a person has visited, and shows those specific products to the user in an ad.
If Google does not have this information, then they will show the static ad in the display placement. I, of course, am referring to the Shopping side of SSC and Performance Max here and not the new DSA side that is now included in PMax.
By the way, fun fact, but in Smart Shopping Campaigns you were able to segment your ad groups by "Click Type" and get insight into how many clicks went to product ads, and how many went to static ads. This functionality has been removed in Performance Max campaigns.
In Performance Max, you can see the Click ID information, BUT importantly, this is annotated for Dynamic Product Ad clicks... and doesn't accurately show what clicks ACTUALLY COME from non-search channels. That information reported as video and display clicks are on the static ads only, NOT the dynamic product ads reported above (which is reported on as shopping ad clicks).
If you are interested in getting some additional PMax click information, then Mike Rhodes of AgencySavvy created this helpful PMax reporting script that can give you additional information.
All that to say, this information might not be something you will immediately use in your account, but I hope it helps you understand one aspect of Google's automated Shopping types as we all try to figure out how to make these more successful over time in a changing landscape.