Google Ads is expanding Demand Gen with two notable updates: Target CPC bidding and AI-powered video generation. Together, these additions give advertisers more control over click-focused campaigns while also making it easier to create adaptable video assets for visually led placements.
The update matters because Demand Gen is already positioned as Google’s visual, audience-first campaign type across YouTube, YouTube Shorts, Discover, Gmail, and related inventory. Google says the format is built to capture engagement and action across these high-attention surfaces rather than relying only on search intent.
What the Demand Gen Target CPC update means
Target cost-per-click, or tCPC, is now available in Demand Gen for advertisers whose main goal is to drive clicks and website traffic. According to Google Ads Help, this automated bidding strategy sets bids to generate as many clicks as possible while trying to maintain the average CPC around the advertiser’s target.
This gives Demand Gen a clearer option for traffic-focused campaigns. Until now, much of the conversation around Demand Gen centered on conversion efficiency, conversion value, or volume-led automation. With tCPC, Google is giving marketers another lever when the priority is controlled click growth rather than immediate downstream conversion targets.
In practical terms, that makes Demand Gen more flexible for upper-funnel and mid-funnel planning. Brands that want qualified site visits, landing page traffic, or audience-building activity can now align bidding more directly with those goals instead of forcing every campaign into a conversion-first setup. This is an interpretation based on how Google defines the strategy and where Demand Gen is used in the journey.
AI video generation adds creative scale
Google has also introduced AI-powered video generation inside Demand Gen. Its support documentation says pre-generated videos can be created from image and text assets, helping advertisers expand reach and improve performance without starting every asset from scratch.
That is especially relevant for advertisers struggling with creative production speed. Demand Gen depends heavily on visual formats, and Google’s own guidance emphasizes strong creative quality across YouTube, Shorts, Discover, and Gmail. The platform also supports creative enhancements and video adaptations across multiple aspect ratios, helping ads fit more placements with less manual rework.
Google has also said that advertisers who uploaded both video and image assets to Demand Gen saw 20% more conversions at the same cost per action than those using video assets alone. That strengthens the case for a mixed-asset strategy rather than a single-format approach.
Why this matters now
Demand Gen is not a side format anymore. It is also the long-term replacement for Video Action Campaigns in Google Ads. Google states that the option to create new Video Action Campaigns was removed in April 2025, existing campaigns were automatically upgraded in July 2025, and end-date extensions beyond January 31, 2026 were later blocked in Google Ads.
That means these updates are arriving as advertisers continue shifting budget, reporting logic, and creative workflows into Demand Gen. The addition of Target CPC broadens the campaign type’s usefulness, while AI video generation reduces friction for teams that need more assets across more formats.
Demand Gen bidding options are becoming more complete
Google’s documentation now positions Demand Gen with a wider range of bidding approaches. Advertisers can use efficiency-based strategies such as Target CPA and Target ROAS, volume-based strategies such as Maximize Conversions and Maximize Conversion Value, and click-based options including Target CPC and Maximize Clicks.
That matters because campaign planning becomes more objective-led. A brand chasing leads or purchases can still optimize to conversion outcomes, while another brand focused on traffic, launch visibility, or audience-building can use click-based bidding more intentionally. The update helps Demand Gen behave more like a flexible campaign family rather than a narrow visual extension. This is an analytical conclusion based on Google’s published bidding framework.
FAQ
What is Target CPC in Demand Gen?
Target CPC is an automated Google Ads bidding strategy that aims to generate as many clicks as possible while keeping the average cost per click close to the advertiser’s chosen target.
Is Demand Gen replacing Video Action Campaigns?
Yes. Google says Video Action Campaigns are being replaced by Demand Gen, with creation removed in 2025 and migration milestones continuing into 2026.
What does AI video generation do in Demand Gen?
It uses Google AI to create pre-generated video assets from existing image and text inputs, helping advertisers build more video creative for campaign placements.
Where do Demand Gen ads appear?
Demand Gen campaigns can run across YouTube, YouTube Shorts, Discover, Gmail, and related Google visual surfaces.
Final takeaway
Demand Gen is clearly evolving into a more mature campaign type for both performance and creative scale. Target CPC gives advertisers better control when clicks are the main KPI, while AI video generation helps reduce creative production delays and makes it easier to scale campaigns across multiple formats.
For businesses using Google Ads services to drive traffic, leads, and ecommerce growth, this update creates new opportunities to test and improve performance across YouTube, Shorts, Discover, and Gmail. Digilogy supports brands with Google Ads services, campaign strategy, bidding optimization, and creative planning to help them adapt to platform changes more effectively. To explore how these updates can fit your advertising strategy, visit the Digilogy Contact Us page.
