Why your Google Ads ROI is low? Demand Gen shifts & long-term brand value myths exposed

2025 will be a critical turning point in the field of digital marketing. Google Ads is about to usher in a series of major changes, the most notable of which is the end of call-to-action video ads and the rise of Demand Gen ads. According to Google's official announcement, advertisers will no longer be able to create new call-to-action video campaigns from March 2025, and all existing campaigns will be automatically upgraded to Demand Gen in the second quarter. This change not only represents an update of the technology platform, but also heralds a shift in the paradigm of digital marketing strategies. At the same time, the latest research by Google and WARC shows that marketers who focus too much on short-term ROI may miss up to half of their potential profitability. This finding poses a new challenge to the budget allocation strategy of small and medium-sized enterprises. This article will deeply analyze the marketing logic behind these changes and provide practical suggestions for seamless migration of small and medium-sized enterprises to help you seize the opportunity in the wave of change.

I. Google Ads strategy transformation and small and medium-sized enterprises' response

1. Analysis of major updates to Google Ads in 2025

The update of Google Ads in 2025 is not only a technical adjustment, but also a transformation of marketing thinking. The exit of call-to-action video ads and the rise of Demand Gen reflect Google's deep insight into the changes in user behavior. Call-to-action video ads used to be a conversion tool, but their one-way communication model has gradually failed to meet the interactive needs of contemporary consumers. Demand Gen ads integrate new features such as similar audience targeting and image ads, and can be displayed on platforms such as Google Discover and YouTube Shorts, which is more in line with the communication characteristics of the fragmented reading era. Google Ads will provide migration tools to help advertisers seamlessly transfer existing campaigns, but it is worth noting that if you want to make full use of the new features of Demand Gen, it will be a wiser choice to create a new campaign rather than simply migrate. This change requires small and medium-sized enterprises to re-examine their creative strategies and shift from simple product promotion to more contextual content creation to stand out in the flood of information.

2. The end of call-to-action video ads and the rise of Demand Gen

The end of call-to-action video ads marks the end of an era of marketing, while the rise of Demand Gen opens a new era of more integrated marketing. The biggest advantage of Demand Gen is that it can cross platform boundaries and seamlessly integrate brand messages into the scene where users naturally browse content. Compared with traditional call-to-action videos, Demand Gen ads emphasize "discovery" rather than "interruption", which is highly consistent with the psychology of contemporary consumers who resist hard sales. For small and medium-sized enterprises, this means that they need to develop more native creative content that can naturally stimulate demand as users explore their interests. In practice, advertisers should start testing Demand Gen campaigns immediately to accumulate data and experience, rather than passively waiting for forced migration. It is particularly noteworthy that Demand Gen uses first-party data more deeply, which requires small and medium-sized enterprises to accelerate the construction of their own data assets in order to remain competitive in the new advertising ecosystem.

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II. Breaking the marketing myth of short-termism

1. Data comparison of short-term ROI and long-term brand value

The research of Google Ads and WARC revealed a fact that is ignored by most small and medium-sized enterprises: excessive focus on short-term ROI may lead to up to 50% loss of potential profits. Data shows that the ROI generated by media investment in the first 4 months is only half of the value that can be created in the next 20 months. This means that traditional short-term effectiveness measurement methods seriously underestimate the long-term contribution of marketing activities. Even more surprising is that the study found that for every £1 invested, the short-term return is £1.87, but if the long-term impact is considered, this figure can jump to £4.11. This "hidden ROI" phenomenon is particularly evident in brand building activities, because intangible assets such as brand awareness and emotional connection need time to be converted into actual sales. For small and medium-sized enterprises, this finding is extremely subversive. It proves that the strategy of simply pursuing immediate conversion can meet the needs of the current quarter's financial statements, but it may damage the company's long-term market position and profitability.

2. The best ratio of investment at the top and bottom of the funnel

Based on an in-depth analysis of the of European brand e-commerce, the study pointed out that the most ideal media investment allocation is to use 50-60% of the marketing budget for brand building activities at the top of the funnel, and the remaining 40-50% for performance marketing at the bottom. This "golden ratio" breaks the usual "focus on performance, light on brand" budget allocation model of small and medium-sized enterprises. Although brand investment at the top of the funnel does not directly drive conversion, it lays a psychological foundation for performance marketing and greatly improves the latter's conversion efficiency. The case of Domino's Pizza perfectly illustrates this synergy. When they adjusted their YouTube strategy and balanced brand awareness with performance-oriented activities, the overall ROI increased by 45%. The revelation to small and medium-sized enterprises is that even with limited budgets, they should continue to invest in brand building. This "brand savings" will eventually turn into considerable profitability. The key is to establish a scientific measurement framework to capture the long-term contribution of brand activities.

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III. The core architecture of low-cost and high-efficiency strategies

1. The strategic value of first-party data and CDP construction

Against the background of the gradual withdrawal of third-party cookies, first-party data has evolved from a competitive advantage to a necessity for survival. The case of Douglas Beauty Group profoundly illustrates that having a strong first-party data strategy can not only overcome the challenge of the disappearance of cookies, but also create unprecedented personalized marketing capabilities. As the core architecture of the first-party data strategy, the customer data platform (CDP) can integrate multi-channel data such as websites, apps, and CRM to form a complete customer portrait. For small and medium-sized enterprises, the value of CDP lies in converting scattered data assets into actionable marketing insights, such as identifying high-value customers and predicting purchase opportunities. It is particularly noteworthy that modern CDP solutions have significantly lowered the technical threshold. The solutions provided by Google Cloud and its partners enable SMEs to build their own data infrastructure at a reasonable cost. In an environment where data privacy regulations are becoming increasingly stringent, CDP provides a compliant and efficient way to realize the value of data.

2. Douglas Beauty Group's CDP Actual Case

Douglas Beauty Group's CDP transformation process provides valuable reference for SMEs. Faced with the challenge of the withdrawal of third-party cookies, Douglas decisively upgraded the original DMP to a customer data platform solution based on Google Ads. This decision not only solved the imminent data crisis, but also created new competitive advantages. Through CDP, Douglas successfully integrated billions of website and APP events, millions of CRM user profiles, and established hundreds of fine audience segments. These data assets enable marketing teams to execute extremely precise advertising, such as excluding existing customers from customer acquisition activities and locking in customers whose products are about to run out. What is more worthy of reference for SMEs is that Douglas applied CDP to retail media networks to transform data insights into new sources of revenue. This proves that is not only a cost center, but also a profit driver. This kind of thinking is particularly important for SMEs with limited resources.

3. Four steps to build a data foundation suitable for SMEs

For SMEs, customer data platform construction does not have to be done all at once. A more flexible and incremental path can be taken. The first step is to hold a cross-departmental workshop to clarify the business goals and expected results of customer data platform, which helps to avoid waste of resources in the later stage. It is particularly important to involve the data protection officer early to ensure that compliance is incorporated into the design from the beginning. The second step is to comprehensively review the existing IT infrastructure and data assets, identify data silos and integration opportunities, which often discovers overlooked data treasures. The third step is to develop a clear project roadmap and set phased KPIs, such as data coverage, number of audience segments, etc. The last step is to prioritize and select 2-3 high-value use cases for preliminary testing, such as shopping cart abandoner recovery or customer lifetime value prediction. This focused approach allows SMEs to see results quickly and build confidence and internal support for subsequent investments.

IV. Topkee's Google Ads Solution

Topkee's Google Ads solutions is a complete digital marketing service system designed for enterprises to achieve the best results in the Google advertisements ecosystem. The solution covers the entire process from pre-preparation to post-optimization, integrating multi-dimensional data through TTO CDP to achieve precision marketing. First, Topkee provides comprehensive website evaluation services, using the latest website scoring tools for in-depth diagnosis, creating detailed SEO problem reports and providing optimization suggestions, including page content detection and structural adjustments, to ensure that the website content not only meets the search engine specifications but also provides valuable user experience, thereby effectively improving search rankings and conversion rates. On the technical level, the TTO tool developed by Topkee can centrally manage multiple advertising accounts, realize one-stop operation of account application, budget association and permission configuration, and realize refined data tracking through tag ID association. Its unique TM setting function goes beyond traditional UTM parameters, allowing customized tracking rules based on factors such as advertising source, media type, and campaign name, generating exclusive tracking links with TMID, making advertising effect analysis more targeted.

In the strategic planning stage, Topkee's marketing team will customize the theme plan based on the customer's business needs, from the perspectives of market trends and competitive product analysis, and expand the core keyword library through a rigorous keyword research process, combined with competitive product analysis and intelligent tools, and integrate broad matching and intelligent bidding strategies to improve Google Ads advertising coverage and conversion accuracy. In terms of creative production, the team uses AI technology to generate preliminary copywriting and visual concepts., which are then deepened and implemented by professional designers to ensure that the content is both creative and marketing effective. For the remarketing link, Topkee analyzes user behavior data through the TTO system, establishes a multi-dimensional customer segmentation model, designs personalized remarketing content and optimizes the timing of delivery. Actual measurements show that this strategy can increase the conversion rate of target users by more than 70%. Finally, through regularly produced advertising reports (including delivery results, conversion data and ROI analysis), optimization suggestions are provided from the aspects of budget allocation, click-through rate, conversion cost, etc., and subsequent keyword strategies and content adjustment directions are assisted to form a complete data-driven optimization closed loop. This solution places special emphasis on the deep integration of technical tools and marketing strategies. For example, the TTO system not only automates advertising account management, but also forms data synergy with remarketing strategies. The TM tracking mechanism provides more granular data support for effect analysis, enabling companies to systematically improve the return on investment of Google Ads.

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Conclusion

The transformation of Google Ads solutions and the transformation of marketing thinking in 2025 are both challenges and opportunities. From the shift from call-to-action videos to Demand Gen, from the short-term ROI myth to the balance of long-term brand value, from data silos to CDP integration, these changes together point to a more integrated, intelligent and customer-centric marketing future. With limited resources, small and medium-sized enterprises should grasp the essence of these changes and avoid passive responses. Remember, successful digital marketing is not about chasing every new tool or platform, but about establishing a robust strategic framework that can flexibly adapt to changes and continue to learn. If you need professional guidance in the process of strategic transformation, or want to learn more about how to apply these insights to your business, you can always contact a digital marketing consultant to provide professional support for your growth journey.