Performance Max (PMax) campaigns are revolutionising digital advertising by harnessing AI and automation across Microsoft’s entire advertising ecosystem. This campaign type consolidates multiple ad formats, advanced targeting options, and automated bidding strategies into one streamlined approach—allowing advertisers to reach the right audience, on the right channels, at the right time.

In this guide, we explore the key strategies and best practices to optimise your Performance Max campaigns for maximum success.

1. Asset Group Structure: Laying the Foundations for Success

In PMax campaigns, traditional ad groups are replaced by asset groups, which provide greater flexibility and a more holistic approach to ad targeting. Asset groups should be structured around themes, aligning with specific products, services, or promotional strategies.

Best Practices for Asset Grouping:

• Group by Product or Service: For instance, clothing products in one asset group, footwear in another.
• Segment by Price or Brand: Separate asset groups for premium and budget products, or different brand lines.
• Seasonal & Promotional Grouping: Create asset groups tailored for key events such as Black Friday or Mother’s Day.

2. Shopping – Product Listing Group Structure

For shopping ads within a PMax campaign, using product listing groups ensures better control and relevance. 

Key Strategies:

• Segregate by Product Type or Audience: Keep premium and budget-friendly products in separate groups, or segment based on seasonality.
• Cross-list Products When Relevant: If a product appeals to multiple audiences, include it in multiple listing groups.

Listing Groups can be filtered using Hierarchy View:

3. Audience Signals: Guiding the Algorithm for Smarter Targeting

The success of a PMax campaign hinges on the quality of data provided—particularly audience signals. These help the algorithm understand who is most likely to convert, allowing it to find similar high-value users across Microsoft’s vast network.

The more relevant and accurate your audience signals, the quicker the algorithm can optimise, improving both short-term results and long-term campaign performance.

Key Audience Signals to Include:

1. Remarketing Audiences (Highly Valuable)
   • Past website visitors
   • Previous converters
     These are your warmest leads and often yield the highest conversion rates.
2. Interest-Based Audiences (In-Market & Affinity Segments)
   • Users actively researching or comparing products/services in your niche
   • Audiences aligned with specific interests related to your offerings
     Perfect for reaching users with strong intent but who haven’t yet engaged with your brand.
3. Customer Match Lists
   • Upload email lists of previous customers
   • Target existing clients for upselling, cross-selling, or retention
     This creates high-converting opportunities with users already familiar with your brand.
4. Custom Audiences
   • Build audiences based on specific keywords, URLs, or app usage
   • Target users whose search behaviours align with your ideal customer profile
     A flexible way to tailor audiences to niche interests and high-intent behaviours.
5. LinkedIn Targeting Options(Exclusive to Microsoft Ads)
   • Target by job titles, industries, or company sizes
     Ideal for B2B campaigns aiming for precise professional targeting.
6. Demographic Data
   • Age, gender, household income, parental status, etc.
     Use this data to fine-tune asset groups and ensure relevance to different audience segments.

Remember: Audience signals do not limit reach; they help the algorithm optimise faster and target the most promising prospects.

4. Search Themes: Enhancing Buyer Intent Recognition

Search themes are a newer type of signal you can give the campaign to help determine who sees your ads and the types of searches they use, all intended to help drive lower-funnel conversion actions to maximise leads or sales.

They operate at the asset group level and can be added during creation or editing. You can include up to 25 search themes per asset group, with a maximum of 80 characters each.

Best Practices:

• Add up to 25 search themes per asset group (max 80 characters each).
• Prioritise high-intent keywords that reflect buyer behaviour.
• Use historical data to focus on proven, high-performing terms.
• Be specific over broad: Long-tail keywords often yield stronger results.

5. Assets: Crafting High-Performing Creatives

Quality assets are the backbone of any Performance Max campaign. The PMax algorithm thrives on variation, continuously testing different combinations of creatives to identify which messages, visuals, and formats drive the strongest results. By providing a wide range of high-quality, versatile assets, you give the algorithm more opportunities to find the most effective combinations, leading to higher engagement, improved conversion rates, and a stronger return on ad spend. 

Well-optimised assets not only enhance ad relevance but also allow your campaign to adapt seamlessly across Microsoft’s network, ensuring consistency and maximising performance. 

Essential Asset Types:

• Logos: Up to five brand logos for consistency.
• Headlines: Up to 15 short headlines (30 characters) and five long headlines (90 characters).
• Descriptions: Up to five ad descriptions (90 characters) to highlight key selling points.
• Call to Action (CTA): Encourage engagement with compelling CTAs like “Shop Now” or “Get a Free Quote”.
• Ad Extensions: Additional information like phone numbers or location details.

Image Best Practices:

• Use headlines for messaging rather than embedding text in images.
• Keep visuals clean and simple for maximum clarity across placements.
• Ensure images are high resolution and optimised for mobile and desktop.

Pro Tips for Asset Optimisation:

• Preview all ads before submitting to catch issues like cropping or text misalignment.
• Choose images that directly reflect the product or service being promoted.
• Prioritise clarity and simplicity—busy images or excessive text can reduce ad performance.

6. Budgets: Allocating Resources for Maximum Performance

It’s important to give your performance max campaign enough budget to achieve the best possible results. It is generally recommended that your Pmax campaign has 2-3x the budget of your historical standalone campaigns.

This is due to the fact Pmax will serve across multiple ad formats, on many platforms, throughout the full funnel to engage and convert your customers. In order to give the campaign the best chance of success, you don’t want to limit its capabilities, as too little resource will hinder the algorithm’s optimisations and therefore your performance.

However, the budget you allocate will of course vary depending on your business aims, strategy and the overall resource available to you.

Considerations:

• Campaign Goals & Bid Strategies: Allocate a budget that supports your target ROAS or CPA.
• Competitive Landscape: In highly competitive industries, higher budgets may be needed.
• Seasonality & Trends: Adjust spending during peak sales periods.
• Testing & Learning Speed: A higher budget helps the algorithm learn and optimise faster.

7. Bid Strategies: Choosing the Right Approach

In order to maximise your results it’s important to choose the right bid strategy to help you achieve your goals.

To use automated bidding strategies as described below, you need conversion tracking set up (either a UET tag + an active conversion goal, or offline conversions). If you don’t have conversion tracking in your PMax campaign, the campaign will optimize to maximize clicks.

• Maximise Conversions: Will help you get the most conversions for your budget. Whichever conversion goals you have set up the campaigns to target, the bid strategy will get as many as it possibly can. This is a good strategy to start with if you are targeting lead generation and phone calls for the business.
• Target CPA: This strategy is beneficial when you have conversions being generated in the campaign and you want to add a layer of control. This helps to set a target cost per acquisition or target cost per conversion to aim for, which can improve the efficiency of the results.
• Maximise Conversion Value: If you are an e-commerce business and looking to get the highest amount of revenue or conversion value possible within your budget, then this bid strategy will help you achieve that goal. It’s important to note this won’t however factor in efficiency or the ROAS.
• Target ROAS: If therefore you want more control and to aim for a certain return from your ad spend, Target ROAS is the perfect option for you. For example, if you want £9 revenue from every £1 spent on ads, you can set your Target ROAS to 900% and the bid strategy will aim to achieve that return with your budget. This can sometimes hinder the amount you spend, as you are trying to achieve a certain efficiency, rather than just volume. Therefore, it’s vital to assess what the biggest priority is for your campaign, whether that’s the volumes of sales/revenue or the efficiency of those returns

8. Brand Safety and Exclusions: Maintaining Control Over Where Your Ads Appear

In a fully automated campaign like Performance Max, maintaining control over where your ads appear is crucial for protecting your brand’s reputation. Without proper safeguards, ads could unintentionally show alongside sensitive or irrelevant content, potentially harming your brand image or leading to wasted ad spend.

Microsoft Advertising offers robust brand safety tools that help you control ad placements and avoid undesirable associations. By using these features, you can ensure your ads appear in safe, brand-appropriate environments, while still benefiting from the expansive reach of Performance Max.

Core Brand Safety Features:

1. Account-Level Negative Keywords:

• Block unwanted search terms that don’t align with your brand or campaign goals.
• Prevent your ads from showing for irrelevant, sensitive, or low-quality searches.
• Example: A luxury retailer might block terms like “cheap” or “bargain, while a financial brand may exclude “get rich quick”.

2. Website Exclusions:

• Prevent ads from appearing on specific websites that could negatively impact your brand or reach the wrong audience.
• Ideal for blocking competitor sites, controversial platforms, or low-quality traffic sources.
• Continuously review placement reports to spot and exclude underperforming or misaligned sites.

3. Brand Safety Categories:

• Use Microsoft’s predefined categories to automatically block ads from appearing alongside sensitive or potentially harmful content.
• This allows you to maintain brand integrity without manually managing individual placements.
• Categories you can exclude include:
  • Crime
  • Infectious Diseases & Outbreaks
  • Kids Content
  • Natural Disasters
  • Politics
  • Protests & Demonstrations
  • Sensitive Social Issues
  • Unscored Traffic (traffic that hasn’t been categorised or evaluated for brand safety)

9. Copilot: AI-Powered Campaign Optimisation

Copilot combines the power of generative AI and natural language processing to streamline your Performance Max campaigns, simplifying asset creation, personalisation, and optimisation. It acts as your AI-powered assistant, helping you build high-performing ads faster while maintaining creative control.

With Copilot, you can:

• Manage campaigns using a conversational AI interface.
• Generate and customise ad assets—including images, headlines, and descriptions.
• Review campaign performance with data-driven recommendations, saving time and boosting efficiency.

Copilot & Performance Max 

Copilot works hand-in-hand with Performance Max, making it easier to create high-quality asset groups by analysing your website content and suggesting tailored visuals and copy.

10. Reporting on Performance Max Campaigns

Effective reporting is essential for understanding the impact of your Performance Max campaigns and identifying key areas for optimisation. Microsoft Advertising offers comprehensive reporting tools that provide deep insights into campaign performance, audience behaviour, and asset effectiveness—allowing you to make data-driven decisions that maximise ROI.

Performance Max reporting covers a wide range of metrics and dimensions, helping you evaluate everything from overall campaign success to the performance of individual assets and audience segments.

Key Reporting Areas:

1. Campaign Performance Overview:

• Gain high-level insights into core metrics such as impressions, clicks, conversions, cost-per-click (CPC), and return on ad spend (ROAS).
• Use the campaign view to monitor daily trends and identify spikes or drops in performance.
• Assess how well your campaign aligns with your KPIs and make real-time adjustments as needed.

2. Asset Group and Product Performance:

• Break down performance by asset groups to see which themes, products, or services are driving the most engagement.
• View individual asset metrics—such as impressions, click-through rates (CTR), and conversions—to identify top-performing headlines, descriptions, and images.
• For shopping ads, analyse performance by listing groups to determine which product categories or individual SKUs are delivering the highest ROI.

3. Asset-Level Performance Analysis:

• Understand which text and image combinations perform best across different placements.
• Identify strong-performing ad extensions and optimise underperforming ones.
• Use these insights to refine your asset library and create more effective creatives.

4. Audience and Demographic Insights:

• View and export metrics broken down by audience name or audience category (in-market audiences, remarketing lists, e.g.)
• This reporting shows audiences that were associated with the campaign via audience signals. If users are from outside the defined targets, it will be shown under Users not in audience segments. 
• Review how different audience segments engage with your ads, including demographics like age, gender, and household income.
• Evaluate the impact of audience signals and fine-tune targeting based on conversion data.
• Identify underperforming audience segments and adjust bidding strategies accordingly. 

5. Location and Device Performance:

• Analyse campaign results by geographic location to identify high-performing regions or cities.
• Review performance by device type (desktop, mobile, tablet) to optimise bidding strategies and improve user experience across platforms.

6. Search Term and Placement Reports:

• Search Term Reports: Understand which user queries triggered your ads and contributed to conversions. Use this data to refine audience signals and negative keyword lists.
• Website Reports: See a list of websites and placements where your ads appeared. This is measured by impressions only, not conversions. Use this insight to block irrelevant or underperforming placements.

Final Thoughts

Performance Max campaigns offer a powerful way to leverage AI-driven automation while maintaining control over key elements such as audience signals, search themes, and asset optimisation.

By structuring campaigns strategically, providing high-quality creative assets, and leveraging advanced reporting tools, advertisers can unlock the full potential of PMax—maximising reach, conversions, and ROI.

With tools like Microsoft’s Copilot, campaign setup and optimisation have never been easier, allowing businesses to refine their approach and achieve exceptional results in an increasingly competitive digital landscape.