Performance Max vs Search Campaigns: When to Use Each in 2026

Performance Max campaigns use Google's AI to run ads across Search, Shopping, YouTube, Display, Discover, Gmail, and Maps from a single campaign, optimising for conversions automatically. Search campaigns target specific keywords with text ads on Google Search results, giving advertisers precise control over queries, bids, and messaging. Use Search campaigns for high-intent keyword targeting, brand protection, and compliance-sensitive industries. Use Performance Max when you need broad multi-channel reach, have strong creative assets and product feeds, and can provide at least 30 conversions per month for the algorithm to learn. Most businesses in 2026 should run both — with Search protecting high-value keywords and Performance Max capturing incremental demand across channels. AI Max for Search, introduced in 2025, now sits between the two as an automation layer within Search campaigns.

Performance Max runs your ads across every Google channel from a single campaign. Search campaigns give you precision targeting on the keywords that matter most. In 2026 — with AI Max layering automation into Search, channel-level reporting finally making Performance Max transparent, and ads now appearing inside AI Overviews and AI Mode — the question isn't which one is better. It's knowing when each earns its place in your account.

This guide breaks down how each campaign type works, where they overlap, and how to structure them so they complement each other instead of competing for the same traffic.

How Each Campaign Type Works

Search Campaigns

Search campaigns are keyword-driven. You choose the keywords you want to trigger your ads, write the ad copy, set the bids, and pick the landing pages. When someone types a query that matches your keyword, your text ad appears on the search results page.

The strength is precision. You know exactly which queries you're targeting, you can read every search term that triggered an ad, and you can adjust bids at the keyword level. For high-intent queries — where someone is actively looking for your product or service — Search campaigns consistently deliver the highest conversion rates because you're reaching people at the exact moment of interest.

The trade-off is scope. Search campaigns only appear on Google Search (and Search Partners). They don't reach users scrolling YouTube, reading Gmail, browsing Discover, or looking at Maps. And they require ongoing keyword management — adding new terms, building negative keyword lists, and refining match types.

Performance Max

Performance Max takes a fundamentally different approach. Instead of targeting keywords, you provide Google with creative assets (headlines, descriptions, images, videos), audience signals (customer lists, in-market segments), and a conversion goal. Google's AI then decides which channel to show your ad on, which user to show it to, and how much to bid — across Search, Shopping, YouTube, Display, Discover, Gmail, and Maps simultaneously.

The strength is reach and automation. One campaign covers the entire Google ecosystem, and the algorithm continuously optimises based on conversion data. For businesses with strong creative assets and sufficient conversion volume, Performance Max can find demand in places you wouldn't think to look.

The trade-offs are significant. You have limited visibility into which channels are driving results (though this improved substantially in late 2025 with channel-level reporting). You can't see the full list of search queries triggering your ads. And the algorithm needs a minimum of roughly 30 conversions per month to learn effectively — below that threshold, performance tends to be unreliable.

AI Max for Search (The New Middle Ground)

Introduced at Google Marketing Live in May 2025 and rolled out globally through Q3 2025, AI Max isn't a new campaign type. It's a feature toggle within existing Search campaigns that activates three AI-powered enhancements: search term matching expansion (broadening your keyword reach using broad match and keywordless technology), text customisation (automatically generating ad headlines and descriptions), and Final URL expansion (dynamically directing users to the most relevant landing page).

Think of AI Max as adding Performance Max-style automation to your Search campaigns while keeping the transparency and control of keyword-based targeting. Google's internal data shows campaigns using AI Max see roughly 14% more conversions at a similar cost per acquisition, with the uplift climbing to 27% for campaigns that were previously relying mostly on exact and phrase match keywords.

The important caveat: AI Max casts a wider net than manual keyword targeting. You'll need to monitor your search terms report more actively and add negative keywords to filter out irrelevant traffic.

Head-to-Head Comparison

When to Use Search Campaigns

Search campaigns should be your foundation in almost every Google Ads account. Here's when they're the clear choice.

High-intent, bottom-of-funnel keywords. When someone searches "Power BI training Sydney" or "book marketing automation consultant," they're ready to act. Search campaigns let you bid precisely on these terms and send users to the exact landing page that matches their intent.

Brand protection. If competitors are bidding on your brand name — or if you simply want to own the top of the results page for branded queries — Search campaigns give you the control to manage messaging and costs. Performance Max will target branded terms by default and often claims credit for conversions that would have happened organically.

Regulated industries and compliance. Legal, healthcare, finance, and education providers often have strict requirements around ad copy. Search campaigns let you control every word. AI Max and Performance Max may generate variations that drift outside compliance boundaries.

Limited budgets. If you're spending under $3,000-5,000 per month, concentrating your budget on proven high-intent keywords via Search typically delivers better returns than spreading thin across Performance Max's seven channels.

Low conversion volume. Below 30 conversions per month, Performance Max doesn't have enough data to optimise effectively. Search campaigns perform well at any conversion volume because you're manually selecting the queries you want to target.

Search term intelligence. Search campaigns provide complete query-level data that informs your SEO strategy, content creation, and broader marketing decisions. Performance Max only shows a subset of search terms, limiting your ability to learn from the data.

When to Use Performance Max

Performance Max earns its place when conditions are right. Here's where it adds genuine value.

E-commerce with product feeds. If you're selling products online and have a Google Merchant Center feed, Performance Max replaces and expands on what Smart Shopping campaigns used to do. The algorithm matches products to user intent across Shopping, Search, YouTube, and Display. Businesses with 50+ products and strong product imagery see the best results.

Sufficient conversion volume. Once you're generating 30+ conversions per month, Performance Max has enough data to learn which users, channels, and placements drive results. Below that threshold, it's largely guessing.

Multi-channel reach goals. If your audience discovers you across YouTube, Gmail, and Discover — not just Search — Performance Max covers all of these from a single campaign. This is particularly valuable for B2C businesses with visually appealing products or services.

Strong creative assets. Performance Max rewards advertisers who provide a full suite of assets — multiple headlines, descriptions, images in various aspect ratios, and ideally video. Without quality creative, the algorithm defaults to Search and Shopping placements, negating the multi-channel advantage.

Remarketing at scale. Performance Max excels at re-engaging users who've already visited your site or interacted with your brand. Upload customer match lists and website visitor audiences as signals, and the algorithm will find the best channel and moment to bring them back.

The Cannibalization Problem

This is the issue nobody talks about in Google's marketing materials but every experienced advertiser encounters: Performance Max competing with your own Search campaigns for the same queries.

Google's official position is that exact match keywords in Search campaigns take priority over Performance Max. In practice, the data tells a different story.

Research from Optmyzr, analysing 503 Google Ads accounts in February 2025, found that 91.45% of accounts had keyword overlap between Search and Performance Max campaigns. At the campaign level, 56.29% of Search campaigns showed overlap, and 27.86% of ad groups were affected. This overlap occurred even with exact match keywords.

The reason? When your Search campaign becomes ineligible to serve — due to budget constraints, geographic targeting limitations, ad scheduling, or audience exclusions — Google doesn't simply skip the auction. Performance Max steps in and shows an ad for that query instead. From your perspective, it looks like Performance Max is performing well. But it may be claiming credit for conversions your Search campaign would have captured at a lower cost.

How to Detect Cannibalization

Compare your Search campaign's impression share before and after launching Performance Max. If Search impression share drops significantly while Performance Max picks up similar queries, that's a red flag.

Download search term reports from both campaign types and cross-reference them. Look for high-value queries that appear in both reports — these are your overlap points.

Check whether your Search campaign is "Limited by budget." If it is, Performance Max will happily eat the overflow — often at a higher cost per click.

How to Prevent It

Use exact match keywords in Search for your highest-value terms. This gives Search the best chance of winning the auction over Performance Max.

Remove Search Themes from Performance Max if they duplicate your Search campaign keywords. Search Themes in Performance Max have the same priority as broad and phrase match keywords, which means they directly compete with your Search campaigns.

Ensure your Search campaigns aren't budget-limited. If Search is capped, Performance Max will capture the overflow by default. Allocate enough budget to Search to maintain high impression share on critical keywords.

Add campaign-level negative keywords to Performance Max. Google now allows up to 10,000 negative keywords per Performance Max campaign — use them to block branded terms and high-value queries you want Search to own exclusively.

Exclude brand terms from Performance Max using Google's brand exclusion lists. This prevents Performance Max from claiming easy branded conversions and forces it to find genuinely incremental demand.

Google's Power Pack: The 2026 Recommended Structure

At Google Marketing Live 2025, Google introduced the "Power Pack" framework, replacing the older "Power Pair" (Performance Max + Search) approach. The Power Pack combines three campaign types, each covering a different stage of the customer journey:

Performance Max handles broad multi-channel reach and full-funnel coverage. Google recommends allocating 60-70% of budget here for e-commerce, or 30-40% for B2B and services businesses.

AI Max for Search provides high-intent search coverage with the transparency and control of keyword-based campaigns, enhanced by AI automation. Recommended budget allocation: 30-40%.

Demand Gen covers awareness and consideration at the top of the funnel, running across YouTube, Discover, Gmail, and Display. Budget allocation depends on your awareness goals.

Our take on the Power Pack: Google's budget recommendations skew heavily toward automation and multi-channel spend because that's where Google makes the most money. For most Australian service businesses and training providers, we'd flip those percentages — 50-60% to Search/AI Max for Search (where intent is highest) and 30-40% to Performance Max (for incremental reach). Demand Gen is worth testing only once your core Search and Performance Max campaigns are profitable and you have budget headroom.

The Power Pack structure works best when each campaign type has a clearly defined role. Problems arise when all three compete for the same users and the same queries without proper exclusions and budget guardrails.

A Real-World Example: Training Company Google Ads Structure

We recently restructured Google Ads for an Australian training provider (anonymised) that had been running Performance Max as their sole campaign type. Monthly spend was around $15,000 with a 2.1x ROAS — acceptable but not great.

The problem? Performance Max was spending heavily on brand terms, claiming credit for conversions that would have happened through organic search. It was also allocating significant budget to Display and YouTube placements that generated impressions but minimal conversions for a high-consideration B2B purchase like corporate training.

Here's how we restructured:

Search campaigns (55% of budget): Dedicated campaigns for high-intent course keywords ("Power BI training Sydney," "Excel course Melbourne"), brand terms, and competitor terms. Exact match keywords ensured maximum control. This captured the highest-intent traffic at the lowest cost per acquisition.

Performance Max (35% of budget): Focused on remarketing (cart abandoners and past attendees) and discovery of new audiences through customer match lists. Brand terms excluded. Search Themes removed to prevent overlap with Search campaigns. Creative assets included course imagery, student testimonials, and short video clips.

AI Max for Search (10% of budget): Enabled on a subset of Search campaigns to test expanded query matching. This surfaced long-tail queries the team hadn't thought to target manually — questions like "what certification do I need for data analysis" that led to course bookings.

The result after 60 days: ROAS improved from 2.1x to 3.4x, with Search campaigns delivering the strongest conversion rates and Performance Max adding genuine incremental volume from remarketing and new audience discovery. Total conversions increased 28% at the same monthly spend.

Where AI Overviews and AI Mode Fit In

Here's the 2026 angle most PMax vs Search guides miss entirely: Google Ads now appear inside AI Overviews and AI Mode.

When someone asks a complex query in AI Mode — like "what's the best project management training for a team of 20 in Sydney" — Google generates a conversational AI response that can include sponsored results. These ad placements are served through your existing Search and Performance Max campaigns.

This means your campaign structure affects whether you appear in AI-driven search experiences, not just traditional search results. Performance Max is designed to serve across all Google surfaces, including AI Mode. But Search campaigns with well-structured keywords and strong ad relevance also qualify.

Google is actively testing new ad formats within AI Mode, including Direct Offers (personalised discounts surfaced during high purchase intent queries) and native ad integrations that blend with the conversational interface.

The practical implication: businesses that run both Search and Performance Max have the widest chance of appearing across traditional results, AI Overviews, and AI Mode conversations. Running only one campaign type limits your potential placements.

Decision Framework: Which to Run

Use this framework to decide your campaign structure based on your business context.

Run Search campaigns only if you have a monthly budget under $3,000, fewer than 30 conversions per month, strict compliance requirements for ad copy, or need complete search query transparency for strategic decisions.

Run Search + Performance Max if you have 30+ conversions per month, a monthly budget above $5,000, creative assets beyond just text (images, video), and a product feed (for e-commerce) or strong remarketing audiences.

Run the full Power Pack (Search + AI Max + PMax + Demand Gen) if you have 100+ conversions per month, a monthly budget above $15,000, dedicated creative resources for video and display assets, and a clear understanding of your full-funnel customer journey.

Enable AI Max for Search if you're running Search campaigns with mostly exact and phrase match keywords and want to test expanded reach without losing Search-level transparency. Start with a 50/50 experiment to compare performance before committing fully.

Key Takeaways for 2026

Performance Max is not a replacement for Search campaigns. It's a complement that works best when given a clearly defined role — incremental multi-channel reach, remarketing, and product feed distribution — while Search handles your highest-intent, highest-value keywords.

The cannibalization risk is real. Over 91% of accounts running both campaign types have keyword overlap, and Google's stated prioritisation rules don't always hold in practice. Active monitoring and proper exclusions are essential.

AI Max for Search is the most important new development for advertisers who want more automation without sacrificing control. It sits between the full automation of Performance Max and the manual precision of traditional Search campaigns.

Channel-level reporting in Performance Max (introduced late 2025) finally lets you see where your budget is actually going. Use this data to validate whether Performance Max is delivering value across channels or just claiming credit on Search placements you could serve more cheaply through dedicated Search campaigns.

And don't forget: Google's revenue model incentivises maximum spend across maximum channels. Their recommended budget allocations aren't necessarily your optimal allocations. Test, measure, and let your own conversion data — not Google's marketing materials — determine your campaign structure.

Where Codeble Fits In

We help Australian businesses structure Google Ads accounts for performance, not just reach. Whether you're starting with Search campaigns on a tight budget or restructuring a multi-campaign account to eliminate cannibalization and improve ROAS, we focus on making every dollar accountable. Get in touch for a Google Ads audit.

Internal Links

• Why Your GA4 Metrics Are Misleading in an AI Search World
• How to Set Up GA4 for Your Website
• What Is AEO? Complete Guide 2026
• ChatGPT Ads Are Here: What It Means for Your AI Visibility
• SEO vs AEO: What Australian Businesses Need to Know
• Dynamics 365 vs HubSpot vs Mailchimp: Marketing Automation Compared

External References (for editorial verification)

• Google AI Max announcement (May 2025, 14% conversion uplift, 27% for exact/phrase heavy campaigns)
• Optmyzr cannibalization study (503 accounts, 91.45% overlap, February 2025 data)
• Google Power Pack framework (Google Marketing Live 2025)
• Performance Max channel-level reporting (late 2025 rollout)
• Google Ads in AI Overviews and AI Mode (expanding through 2025-2026)
• Call-only ads deprecation (new creation blocked February 2026, serving ends February 2027)
• AI Max experiments and text guidelines (rolling out Q1 2026)