29 August 2025

Premium Video vs. UGC: Why Demand Gen is Google’s answer to Paid Social

In summary

• Demand Gen is Google’s play to grab budgets from Meta and TikTok.
• The pitch: premium video, logged-in signals, and higher purchase intent.
• The reality: brands need independent testing to separate proof from pitch.

Google’s play for social budgets

User generated content (UGC) has fuelled social’s rise: messy, raw, and endlessly scrollable. But Google’s Demand Gen wants to flip the script. It’s not here to blend in, it’s here to compete directly for social budgets, backed by premium inventory and data that suggests it can out-perform Meta and TikTok at driving purchase intent.

The question isn’t whether Google is shouting loud enough, it’s whether marketers can validate those claims in their own media mix.

UGC vs. Premium Video: A different ballgame

UGC is social’s engine. It’s authentic, scrappy, sometimes brilliant, but also unpredictable and brand-risky. TikTok and Meta thrive because sheer volume equals attention.

Google’s counterpunch? Demand Gen. Sitting inside YouTube, Discover, and Gmail, it places ads in curated environments where attention, not distraction, dominates, powered by Google’s logged-in identity graph that also fuels Search.

Spend on TikTok, and you’re in the UGC slipstream. Spend on Demand Gen, and you’re buying curated access to premium surfaces.

The sales pitch

Google’s research claims that Demand Gen is:

• 1.3× more effective than Meta at driving purchase intent
• 1.6× more effective than TikTok on the same metric

Source: Google

Promising signals, but important to note these are Google’s own internal studies, controlled conditions that don’t always mirror the messy, multi-channel reality of real-world campaigns.

That doesn’t diminish their value. It sets a clear benchmark. But the real question for marketers is how these results hold up when tested independently, across the full mix.

Under the hood: where it really matters

This is more than a content debate. The real battleground is technical and operational:

• Signals: Demand Gen blends AI-powered intent from Search, YouTube, and Gmail. That’s a strong advantage over the inferred signals social platforms rely on.
• Creative investment: Demand Gen thrives on asset variety, video, carousels, images. Without enough inputs, optimisation falters. By contrast, UGC platforms reward lo-fi, low-cost content.
• Privacy and trust: Google positions Demand Gen as a logged-in, consent-driven ecosystem. Cleaner than many social environments, though brands still need to weigh if “safer” automatically translates to “better outcomes.”
• Audience overlap: Without clean-room testing, it’s hard to know if Demand Gen reaches net-new audiences, or simply double-counts ones you’re already hitting elsewhere.
• Measurement: Every platform presents results in its own best light. The real test is neutral incrementality analysis, MMM, geo-splits, or clean-room studies.

Beyond the walled gardens

Here’s what doesn’t always make it into the pitch deck:

• Budget cannibalisation: Demand Gen doesn’t just compete with TikTok and Meta. For many brands, it’s also replacing spend in Display, Discovery, or even Performance Max. It’s a broader media-mix reshuffle.
• Creative economics: UGC is cheap and fast. Premium creative for Demand Gen demands more time, cost, and production resourcing. The return must justify the lift.
• Consumer behaviour: Audiences are still spending growing amounts of time in lo-fi UGC environments. Even if Demand Gen offers stronger signals, discovery often happens in the chaos of social feeds.
• Ops reality: Advanced testing tools like MMM or clean rooms are more accessible to enterprise brands. Many mid-tier advertisers will need to rely on Google’s reporting, making context and caution all the more important.

Verified proof (with context)

Google’s data points to meaningful opportunities:

• Reach & Engagement: 3B+ monthly active users across Google feeds and 50B daily Shorts views. The scale is undeniable, though reach alone doesn’t equal relevance.
  Discovery & Action: 63% of consumers discover new brands on YouTube, Discover, or Gmail, and 91% take action afterward. Valuable signals, but “action” can range from a click to a conversion, brands should connect this back to real business outcomes.
• Performance Lift: Adding display assets drove a 16% lift in conversions. A solid result, but as with all walled-garden data, the key is testing whether it’s incremental.
• Creative Impact: Campaigns using both video and image assets saw 6% more conversions per dollar than image-only. A useful insight, but only if your team can supply the creative volume to unlock it.

These figures are a helpful starting point. But, as with any platform’s internal studies, the true measure of success comes from neutral validation in your own campaigns.

Louder’s recommendations

Demand Gen is no silver bullet. It’s bold, it’s timely, and it’s worth exploring, but with discipline.

• Test incrementality through neutral methods, MMM, geo-splits, creative testing etc.
• Balance your creative: use premium assets to feed Demand Gen, while keeping UGC-native content alive on social media.
• Treat platform stats as signals, not certainties: they’re a valuable guide, but not a guarantee.
• Use what you need only, run YouTube only or all inventory sources that include the Google Display network, either way you still benefit from CPA bidding.
• When running Demand Gen it’s recommended to set appropriate bid and budget and leverage value based bidding where applicable for maximum impact.

Paid social isn’t going anywhere. But Google has made its move. The question isn’t whether Demand Gen works, it’s whether it works better enough to justify shifting budget. And the only way to know? Test it with diligence, outside the grading curve.

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