Demand Gen vs. VAC: How to Rebuild YouTube Ads for Scalable DTC Growth

How Demand Gen Impacts YouTube Advertising Performance (For Better and Worse)

Video Action Campaigns (VAC) are officially dead to Google Ad campaigns.

Direct response and VSL brands that made the switch early could choose which performance creative to include, but those who did nothing were migrated automatically.

Unfortunately, those who waited were quick to discover that auto-migration was built for speed, not for performance marketing. Brands driving conversions on YouTube Ads suddenly found themselves behind the curve.

The good news? It’s not too late to turn Demand Gen into your next growth engine.

Demand Gen wasn’t made to replace VAC, but to evolve it. To see performance gains, you can’t let Google drive your YouTube ads.

Here’s why Demand Gen is a good, but imperfect, performance system:

What’s Better

Full-Funnel Power

Demand Gen reaches users across YouTube, Shorts, Discover, and Gmail, for blended reach that was impossible with VAC.

Creative Flexibility

You can now combine video, image, and vertical formats in a single campaign. 

Google AI Audiences 

New intent-based targeting is built for conversions, not just impressions. 

What’s Worse

Compliance Risks Are Higher

You can now combine video, image, and vertical formats in a single campaign. 

Under-Creation Kills Performance

Demand Gen relies on feeding the algorithm more creative. Starving it means stalling your results.

Auto-Migration Can’t Replace Strategy

Auto-migrated campaigns dump all assets into one bucket with no targeting logic.

Manual Setup for Maximum Control

Despite its imperfections, those who have leaned into Demand Gen’s strengths are seeing massive potential.

Industry insiders who strategically rebuilt their campaigns for this new format have found:

📈 58% higher ROAS

📈 3x higher CTRs than paid social on average

📈 32% YOY revenue lift

📈 18% more new customer conversions

Those using auto migrations aren’t only behind the curve, they’re losing money. So, how can you build YouTube campaigns to get the most from Demand Gen?

Optimize Demand Gen for YouTube Ad Funnels

Demand Gen is a tool, and like any tool, performance depends on how you use it.

Manual campaign setup beats auto-migration every time. Here’s how we rebuild campaigns, straight from our playbook, for faster, profitable scale.

AI-Ready Audiences

We use two ad groups (one for prospecting, one for remarketing) and group audiences by persona or product line. Skip interest targeting and use custom intent, in-market segments, and 5% lookalikes. These signals give the algorithm the training data it needs to find buyers fast.

Control Placement

Start with a multi-format mix of 3 videos (16:9, 1:1, 9:16) and 3 static images focused on mobile first. Start YouTube-only, then layer in Discover and Gmail after your creatives prove they’re conversion-ready.

Compliance Safeguards

Use Google’s data-driven attribution to capture view-through value and set content exclusions for any sensitive topics. Check out our full compliance checklist to get started.

Want the Full Roadmap?

If you’re still letting Google decide how to spend your budget, it’s time to rethink your performance marketing strategy. Treat Demand Gen as the performance tool it was designed to be and start unlocking reliable, scalable conversions.

Need help getting started? Download our full YouTube Scaling Playbook for step-by-step instructions, campaign setups, creative best practices, and real-world insights to unlock your performance potential.