Chances are, your current PMAX bidding strategy is wasting budget. Read on to learn the proven bidding tactics that fuel growth from the start.

There’s no escaping it: automation is everywhere. This is never truer than in the advertising space. According to Omnicom, AI ad buying agents are going to be directing upwards of 80% of digital media buys by 2030. Currently, we’re seeing Performance Max (PMAX) campaigns skyrocket in popularity. And why wouldn’t they? They’re a powerhouse of automation, combining Google or Microsoft’s AI with your marketing assets to serve ads across every available channel, from Search and Display to YouTube and Gmail. Sounds magical, right?

Well, it can be. But only if you set things up correctly.

Two of the most common reasons PMAX campaigns underperform are not allocating enough budget and using a bid strategy that doesn’t match your business goals.

In this guide, we’ll break down exactly how to approach budgeting and bidding so you’re not just throwing money into the algorithm and hoping for the best. Instead, you’ll have a clear strategy to launch smarter, scale faster, and make your ad spend work harder from day one.

Budgeting for PMAX Success – How much to spend and why it matters

Unlike traditional campaigns, Performance Max spreads your budget across multiple channels and formats all at once. That means you’re not just paying for search ads. You’re also paying for discovery, video, shopping, display, and more. It’s a full-funnel, all-in-one machine.

To give this machine the fuel it needs, you need to set a high enough budget for the algorithm to learn and optimise effectively.

On Microsoft Advertising:

👉 Start with a PMAX budget that’s 2–3x higher than your previous standalone campaigns.

On Google Ads:

👉 Set a daily budget that’s at least 3x your CPA (Cost Per Acquisition). For example, if your CPA goal is £30, you should ideally be spending £90 per day.

Why does this matter? Because PMAX needs enough budget to test combinations, gather data, and move through the learning phase quickly. A low budget throttles that process and can make performance look worse than it really is.

> TL;DR: If your budget is too tight, the algorithm can’t do its job properly and you’re flying blind.

Key Budget Considerations – What else should guide your spend?

Budgeting isn’t just about setting a number and hitting “go.” Here are four key factors that should shape your budget decisions:

1. Your Campaign Goals & Bidding Strategy

Your budget should always align with your chosen goal. Are you chasing leads? Sales? Efficiency? Make sure your budget can realistically support your objective.

Targeting a £25 CPA? Your daily budget should be at least £25, but ideally higher, to give the algorithm flexibility.

Chasing a specific ROAS? Your budget should reflect the level of return you want and the cost it takes to get there.

Don’t let your strategy fight your budget. The two should work in sync.

2. Your Competitive Landscape

If you’re in a highly competitive industry such as legal, finance, or eCommerce, expect your Cost Per Click (CPC) and CPAs to be higher than average. This often means you need to spend more to stay competitive.

PMAX doesn’t just operate on one channel; it spreads out across Search, Display, YouTube, Gmail, and more. That’s a lot of auction environments, and competition varies in each. If you underfund your campaigns in a high-stakes environment, you’ll struggle to win the auctions that matter most.

> In short: You don’t want to go to a bidding war with a £5 budget.

3. Seasonality & Trends

Got a big Q4 push? Launching a product next month? Running promotions for peak season?

You need to adjust your budget accordingly.

PMAX campaigns often ramp up slowly, so you’ll want to plan your budget boosts in advance. Spikes in demand (Black Friday, holiday sales, or industry-specific events) also mean spikes in competition. If you’re not ready with the budget to match, your campaigns will be left behind.

Bonus tip: Google Ads has budget planning tools and seasonal adjustments you can layer in. Use them to stay one step ahead.

4. How Fast You Want to Test & Learn

Higher budgets speed up the testing phase. That means PMAX can:

• Test more audience segments
• Try more creative combinations
• Identify top-performing placements faster

If you’re launching a new campaign and want answers now, don’t hold back. Front-loading your budget in the first few weeks can pay off big by accelerating the algorithm’s learning and surfacing what works (and what doesn’t) quicker.

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Choosing the Right Bid Strategy – Let your goals lead the way

With PMAX, bidding is automated, but that doesn’t mean it’s hands-off. Your choice of bid strategy heavily influences how the campaign behaves.

Before you choose a bid strategy, make sure your conversion tracking is in place. Without it, your campaign will default to Maximise Clicks, which isn’t ideal for most businesses.

Here are the four main automated strategies to consider:

1. Maximise Conversions

Want the most conversions for your budget? This one’s for you. According to research from SmartEcommerce, Performance Max campaigns need at least 30 monthly conversions, and ideally 60 or more, for optimal performance.

This strategy is perfect for lead generation or early-stage campaigns where you don’t have a specific CPA goal yet.

It simply aims to get as many conversions as possible, without worrying about how much each one costs.

2. Target CPA

If you’ve already got a steady stream of conversions and want more control over efficiency, Target CPA lets you tell Google or Microsoft exactly what you’re willing to pay per conversion.

Set your desired CPA, and the algorithm will aim to hit it, balancing cost with conversion volume.

Good for:

• Lead gen
• Performance campaigns with specific acquisition goals.

3. Maximise Conversion Value

For eCommerce brands or revenue-focused campaigns, this strategy tries to get the highest total conversion value from your budget.

It’s ideal when you’re focused on generating revenue, but not necessarily worried about the return on every £1 spent.

4. Target ROAS

This is where things get a little more granular.

Target ROAS lets you tell the algorithm, “I want £X in return for every £1 I spend.”

Example: A target ROAS of 800% means you’re aiming for £8 in revenue for every £1 in ad spend.

It’s great for businesses that care deeply about efficiency and profitability, but be aware: setting your ROAS too high can limit spend and reduce volume.

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Leverage Conversion Value Rules – Customise your bidding around what really matters

If you’re using Maximise Conversion Value or Target ROAS, you can take things further with conversion value rules.

This feature lets you tell the platform which conversions are more valuable based on things like:

• Audience type
• Device
• Geographic location
• Customer lifecycle stage

An example of this approach:

A repeat customer from London on mobile might be worth 2x more than a new user from another region. Using value rules, you can reflect that in your bidding without needing a separate campaign.

This helps align your bidding strategy with real-world business priorities and makes your automation smarter.

Final Thoughts

There’s no one-size-fits-all approach to PMAX budgeting or bidding – but there is a right way to align your budget with your goals. Whether you’re aiming for leads, revenue, or efficiency, the key is to choose a strategy that supports it and to give the algorithm enough room to learn.

Use this guide to double-check your setup, make smarter decisions, and give your campaigns the best chance of success from day one.

Ready to take control of your PMAX budgets? Set up your free Adzooma account today and to keep track and optimise your budgets against your goals without having to leave the platform.