As a local business owner investing in digital advertising and marketing, you're constantly faced with decisions about where to allocate your precious marketing dollars. If you've been running Google Ads campaigns, you've likely encountered two powerful options: Performance Max (pMax) and traditional Search Ads. But which one actually delivers better ROI for your specific business needs?
We've managed hundreds of thousands of dollars in ad spend for local businesses across the US and Canada, and we've seen firsthand how each of these ad types performs across different industries. Let's break down what makes each unique, when you should use one over the other, and how you can leverage each format effectively within your paid search campaigns.
Difference between Search Ads and pMax
Before diving into which types of ads to use when, let's talk about what makes these campaign types fundamentally different.
Paid Search ads target people based on intent
Search ads appear when potential customers actively search for specific keywords related to your business. This intent-based approach means:
- You know exactly what triggered your ad to appear
- You can craft highly specific ad copy directly addressing the search query
- You maintain granular control over which keywords trigger your ads
- Your ads appear primarily in Google Search results
For example, when someone searches "emergency plumber near me," your search ad can directly address their immediate need with a relevant message.
Performance Max is AI-driven across multiple channels
Performance Max casts a much wider net using Google's machine learning to find potential customers.
- Google's AI determines when, where, and to whom your ads appear
- Your ads display across multiple Google properties (Search, Display, YouTube, Gmail, Maps)
- You provide creative assets and let the algorithm assemble and optimize ads
- You have less visibility into exactly what triggers your ads to appear
In essence, you're trading control and transparency for Google's promise of AI-powered optimization across a broader range of placements.
What we've learned from Google Ad campaigns
After managing multiple campaigns for service businesses across North America, we've identified clear patterns in performance. Here's what the data tells us about ROI:
When Search ads deliver good ROI
Traditional search campaigns consistently outperform Performance Max in these scenarios:
- For businesses with specific high-value services – When you offer specialized services with high-profit margins, the precision of search ads often delivers better-qualified leads
- When geographic targeting is important – Service businesses with strict service boundaries see more efficient spend with the precise location targeting of search ads
- For emergency or immediate-need services – Plumbers, locksmiths, and emergency repair businesses capture high-intent customers more effectively with search
- When you have established keyword data – Businesses with historical performance data can use this intelligence more directly in search campaigns
One of our real estate management clients saw a 35% higher conversion rate from search ads compared to pMax when targeting apartment rentals across Canada.
When Performance Max performs well
Performance Max tends to deliver stronger results in these situations:
- For broader awareness and consideration – When you're looking to reach potential customers earlier in their buying journey
- When you have multiple creative assets – Businesses with strong visual content, videos, and varied ad copy see better performance
- For businesses with diverse service offerings – Companies offering many related services benefit from Performance Max's ability to find unexpected customer segments
- When remarketing to past visitors – Performance Max excels at re-engaging people who have previously interacted with your business
- For newer accounts with limited historical data – The AI can sometimes identify opportunities faster than manual optimization
An eCommerce client saw Performance Max generate 60% lower cost per acquisition compared to search, primarily by reaching potential customers through YouTube and Display who weren't actively searching yet.
Creating a full-funnel marketing strategy for Google Ads
Our highest-performing clients don't choose between Performance Max and Search ads, but instead, they leave it up to us to use their ad spend effectively.
We strategically use both. Here's our recommended approach for local service businesses:
1. Build your foundation with Search ads
Start with traditional search campaigns targeting:
- High-intent keywords for your core services
- Location-specific search terms
- Emergency and immediate-need queries
- Branded terms and direct competitor terms
This establishes a baseline of performance with customers actively looking for your services.
2. Add Performance Max for expansion
Once your search campaigns are stable, layer in Performance Max to:
- Discover new customer segments you hadn't considered
- Reach potential customers before they start actively searching
- Remarket to previous website visitors
- Test different creative approaches and messages
3. Implement cross-campaign intelligence sharing
The key to improving overall combined performance is using insights from each campaign type to improve the other.
- Use high-performing search queries to inform Performance Max assets
- Leverage audience insights from Performance Max to refine search targeting
- Apply successful messaging from search ads to Performance Max assets
- Use Performance Max conversion data to identify new keyword opportunities
Check out our Google Ads Management Services to learn more about our strategic approach.
Case study: using Search Ads and pMax as an effective strategy
A local service provider in the Vancouver area was skeptical about Performance Max after hearing mixed reviews from other business owners in the industry. After running traditional search ads for years, they were hesitant to change their approach.
When we started working with them, we implemented a hybrid strategy.
- Maintained search campaigns for high-intent terms like "roof replacement" and "emergency roof repair"
- Added Performance Max campaigns showcasing their work through high-quality photos and videos
- Created separate conversion tracking for each campaign type to accurately measure performance
The results after 90 days:
- Search campaigns: Generated 31 qualified leads at $143 per lead
- Performance Max: Generated 8 qualified leads at $167 per lead
- Combined approach: Increased total lead volume by 26% compared to search-only
While Performance Max leads cost slightly more, they came from homeowners earlier in the buying process who were less price-sensitive and converted to higher-value projects.
What working with us will get you and your business
Managing the complex interplay between Performance Max and Search ads requires expertise, continuous optimization, and a data-driven approach. That's where our expertise comes in.
At Digital Hot Sauce, we're a small, experienced team that treats your business as our own. We specialize in helping local service businesses and eCommerce brands across the United States and Canada increase their leads or sales, improve lead quality, and increase ROI through strategic Google Ads management.
Our team of marketing strategists will:
- Determine the best campaign mix based on your specific business goals
- Share detailed briefs regarding ad creatives and copy required for each campaign type
- Implement conversion tracking to measure true ROI beyond just clicks
- Continuously optimize both campaign types using cross-campaign intelligence
- Provide detailed performance reporting with actionable insights, without any of the marketing jargon
Unlike large agencies where you might just be another number on the roster of clients, we provide personalized attention and strategies specifically to meet your business goals. Learn more about our approach and our team here.
Whether you're struggling to decide between Performance Max and Search ads or looking to improve your current campaign performance, we're here to help.
Schedule a free, no-obligation consultation with our CEO and discover how our proven strategies can bring you more high-quality local leads or sales, regardless of which market you serve.
