How to audit the new customer acquisition goal in Google Ads

Published at Jan 4, 2024

How to audit the new customer acquisition goal in Google Ads

The new customer acquisition goal in Google Ads allows you to efficiently acquire new customers through Performance Max or Search campaigns.

You can optimize your campaign to bid higher for new customers or exclusively bid for new customers, which offers several benefits such as

  • a higher share of new customer conversions
  • efficient budget utilisation
  • reporting on new versus returning customer conversions

Before setting up the new customer acquisition goal, ensure that you have set up specific bidding strategies to maximize the value of your conversions, such as Target ROAS.

You can also adjust how much you value a new customer by adding a fraction of the average order value.

Before optimisation

Google determines new customer values in Google Ads by using signals that help identify new customers for your business.

There are a few ways to provide these signals, including using Customer Match lists (first-party data), Google tag, and auto-detection signals.

The new customer acquisition goal offers two bidding modes to support your customer acquisition goals: New Customer Value mode and New Customer Only mode.

Google Ads also allows you to monitor the number of new customers you’re bringing in and calculate key metrics such as customer acquisition cost.

You can also adjust how much you value a new customer by adding a fraction of the average order value.

Customer lifetime value is calculated using the average conversion value for Shopping campaigns, and you can choose a fraction to determine the new customer value that you feel comfortable with.

Tech requirements

To set up the new customer acquisition goal in Google Ads, there are a few technical requirements that need to be met.

First, you need to install the Google tag conversion tracking code on your website or you can also use Google Tag Manager to install the tag.

Second, you need to add the “new_customer” parameter to your tag event snippet. This parameter is used to determine whether the customer who is converting is a new customer or not.

Third, you need to add the “customer_lifetime_value” parameter to your tag event snippet. This parameter is used to determine the lifetime value of said customer.

Do note that “new customer” refers to anyone that hadn’t purchased in 540 days.

Data layer script sample


`dataLayer.push({`

`"event": 'purchase',`

`"transaction_id": "1545c34e-691e-4726-aeda-b798df255e9c",`

`"affiliation": "Google online store",`

`"value": 23.07,`

`"currency": "USD",`

`"new_customer": true,`

`});`

Gtag script sample


`<script type="text/javascript">`

`gtag('event', 'purchase', {`

`"send_to": "AW-CONVERSION_ID/CONVERSION_LABEL", /* YOUR VALUE */`

`...`

`"new_customer": true, /* calculate dynamically, populate with true/false */`

`...`

`]`

`});`

`/* ]]> */`

Configure new customer acquisition goal

To configure the new customer acquisition goal in Google Ads, you need to have a “Purchase” conversion action set up.

You can set up a new “Purchase” conversion action or ensure that the goal type is set to “Purchase” with Website as the conversion source and the conversion action set to Primary.

To set up the new customer acquisition goal, follow these steps:

  1. In your Google Ads account, click the Goals icon and select Conversions from the drop-down menu.
  2. Click Summary and then click Set Up under the “Customer acquisition” panel.
  3. Choose one or more audience lists to define existing customers and verify all of your existing customer lists to ensure accurate new customer detection.
  4. Set the value assigned to customer acquisition, which is used only in the New customer value mode. This value will be used by default in all campaigns that optimize to new customer acquisition. You can set the customer acquisition value to be equal to the expected future organic revenue of a new customer.
  5. Activate new customer acquisition in your campaign by selecting the campaign you want to enable new customer conversions for and clicking the gear icon.

Visual example

For example, if a customer’s purchase conversion is valued €42.07, you can allot €1.00 more for new customers. This makes the value of a new customer’s purchase €43.07. The trick here is to notice how the bars differ (top to bottom) when it comes to the new costs. This should give you an indication on future customer acquisitions and costs.


visual example of the new customer acquisition goal in Google Ads

Activate new customer acquisition goal

To activate the new customer acquisition goal in your Google Ads campaign, follow these steps:

  1. In your Google Ads account, click the Campaigns icon and select Campaigns from the drop-down menu.
  2. Go to the specific campaign you want to enable for new customer conversions (currently available for Performance Max and Search campaigns).
  3. Click the gear icon next to the campaign name to open the “Settings” panel and expand the “Customer acquisition” row.
  4. Select “Optimize campaign for acquiring new customers” and choose whether you want to bid higher for new customers or only bid for new customers.

These steps will enable your campaign to focus on acquiring new customers, helping you drive overall sales while targeting new customers. The values from your customer acquisition goal at the account level will be used, and you can make adjustments to this value if needed.

Optimisation

The new customer acquisition goal in Google Ads allows you to efficiently acquire new customers through your campaigns. You have the option to optimize the campaign to bid higher for new customers or to bid for new customers exclusively. This goal is designed to support your customer acquisition objectives by providing a higher share of new customer conversions, efficient budget utilization, and reporting on new versus returning customer conversions.

Before you begin, it’s important to note that the New Customer Value mode is not available for campaigns with only store goals. When you bid for the new customer acquisition goal, you are instructing Google Ads to focus on gaining new customers.

Google Ads uses various factors to determine how much to bid for each ad, including the cost of your product or service, the value of a new customer to your business, the competition for your keywords, and the likelihood that a user will click on your ad.

Google AI will optimize your bids over time to ensure that you get the most out of your budget.

New Customer Value mode (only available with purchase conversion goals)

The New Customer Value mode, available only with purchase conversion goals, is designed to help you maximize your total conversion value, including the additional value you specify for new customers.

By predicting future conversions, Smart Bidding considers the value of new customers and bids accordingly. If you’re unsure what your new customer value should be, you can use the recommended value that’s set as default.

You can use the New Customer Value Mode to bid higher for new customers than existing customers. To support this goal, use value-based bidding like:

  • Target ROAS / Max conversion value

This mode allows you to prioritize new customers in your bidding strategy, ensuring that your campaigns focus on acquiring new customers while still hitting your conversion goals[1].

New Customer Only mode

You can use the New Customer Only mode to bid only for new customers. To support this goal, use value-based bidding like:

Target ROAS / Max conversion value Target CPA / Max conversions

Customer acquisition value

Customer acquisition value is an additional value adjustment that is added to a new customer’s first purchase conversion. Google recommends setting the Customer acquisition value such that it represents the revenue that a typical new customer would bring over their lifetime, which includes the new customer’s typical first purchase value.

When you choose a value-based bid strategy, you can use this total value as the basis to set your ROAS targets. Customer acquisition value is only used by campaigns that use value-based bidding strategies.

It is important to note that the Customer acquisition value is different from the Customer acquisition cost, which is the amount spent on acquiring new customers and can be calculated using the cost for the campaign divided by the number of new customers.

The new customer acquisition goal in Google Ads uses Performance Max or Search campaigns to help you gain new customers. You can choose to optimize the campaign to bid higher for new customers or to bid exclusively for new customers.

This goal is designed to help grow revenue and market share by optimizing for conversions from new customers, using a dedicated budget for customer acquisition. Google AI will help maximize new customer conversions with a Customer Acquisition Cost or revenue from new customers to meet ROAS goals.

impact & pitfalls

If your Google Ads campaign is not optimizing to acquire new customers, you may encounter the following scenarios which you will have to troubleshoot:

Lower than Expected Performance

Performance Max or Search campaigns using the new customer acquisition goal may serve fewer ads than expected, which could be due to incorrect campaign setup.

High Proportion of Returning Customers

Even if your campaign is specifically bidding for new customers, you may still notice some returning customers. This can occur due to various reasons, such as new and existing customers being reported on for campaigns with customer acquisition enabled, or if Google Ads is unable to identify an existing customer, for example, if they are using a new or unrecognized device or browser.

High Proportion of Unknown Customers

You may notice a high proportion of “unknown” classified customers for your campaign optimizing for new customer acquisition due to several scenarios, such as non-purchase conversions not being classified into new and existing customers, or users turning off ads personalization or no cookies being available.

To optimize for new customer acquisition, you can set up specific bidding strategies such as Target ROAS and goal conversions for high-value actions on your website or landing page. You can also adjust how much you value a new customer by adding a fraction of the average order value.

In addition, you can prioritize new customers in your Google Ads Performance MAX (PMAX) campaigns by using the Maximize Conversion Value bidding strategy and adjusting your conversion goal to increase your average cart value.

Audit new customer acquisition value

There are pros and cons to both new and returning customers, depending on the type of business and its goals.

Returning customers/loyal customers may be more beneficial as they are more likely to make purchases and spend more money.

On the other hand, new visitors can help increase brand recognition and growth.

If the website is more informative or a one-time purchase type company, new visitors may be more beneficial as an increase in website traffic can lead to more leads

It is important to set achievable goals based on your business objectives when determining whether to prioritise new or returning customers. For example, if lead generation is the goal, new visitors may be more important. If the goal is to build up a loyal following, returning customers may be more important.

Returning customers are easier to sell to and cost less to retain than to acquire new customers. Repeat customers spend more money and are more likely to purchase expensive products or services. However, new customers can bring a sense of urgency and may be more willing to make purchases.

That said, in order to audit the new customer acquisition conversion value, you will have to identify

  • what type of customers are best for the business
  • if the values for the new customers are something the business can “shoulder”
  • the performance of the new values
  • the effect of the new values on the Google Ads account

Additional resources

Activate the new customer acquisition goal

How the new customer acquisition goal determines new and existing customers

Set up new customer acquisition reporting

About bidding for your new customer acquisition goal

Troubleshooting for the new customer acquisition goal

Top posts in Google Ads

How to audit Google Ads campaigns

How to audit Performance Max campaigns

How to audit Search campaigns

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