Google AI Max is A TRAP?! New Data on ROAS, Demand Gen & DSA Sunset

Is Google's new AI Max for Search the future, or is it a hidden trap?

In this episode of Growing E-commerce, Mike Ryan and Chris dive into brand-new, independent test data on AI Max for Search and discuss the strategic role of Demand Gen and the future of Dynamic Search Ads (DSA).

The analysis of over 250 e-commerce campaigns reveals significant concerns:

• AI Max delivers an average 35% lower Return on Ad Spend (ROAS) and a higher Cost Per Conversion (CPA) compared to traditional broad match campaigns in retail.
• The conversions AI Max drives are often at a lower Average Order Value (AOV), raising questions about incrementality versus cannibalization.

Mike predicts that Dynamic Search Ads (DSA) is on its way to being fully sunset/upgraded to AI Max by early 2026. The shift signals Google’s move to consolidate broad automation into AI Max and the visual discovery into Demand Gen. The hosts also warn that many advertisers are creating unnecessary data fragmentation and overlap by running AI Max, DSA, and PMAX concurrently.

The key discussion focuses on the Demand Gen Strategy: Demand Gen is best used as a visual discovery engine to compete with Paid Social/Meta and is heavily driven by video ads across YouTube and Shorts. Learn how to use it strategically as a mid-funnel tool to feed Performance Max (PMAX).

What to do now: AI Max is here to stay. Mike and Chris offer advice on how to use AI Max's built-in controls (like negative keywords) to make the feature work smarter for your business.

About Smarter Ecommerce (smec):

Smarter Ecommerce (smec) empowers e-commerce brands with AI-driven PPC automation that optimizes for profit and business outcomes while maintaining strategic control.

The platform activates first-party data - profit margins, customer lifetime value, and key business metrics - to automate campaign optimization toward goals like profitability and efficient growth, while detailed campaign insights provide full transparency and enable PPC teams to focus on strategic oversight rather than manual execution.

As a Google Premier Partner and three-time Microsoft Retail Partner of the Year, smec manages over €500 million in ad spend and drives €5B+ in annual e-commerce revenue for 350+ global retail clients including THG, Snipes, REWE, and Intersport.

Make sure to follow smec - Smarter Ecommerce for more performance marketing insights:

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