The new customer acquisition goal steers Smart Bidding toward first-time buyers: it bids higher for them, or shows ads only to them. There are three modes: New Customer Value, High Value New Customer, and New Customer Only. For a store with a Purchase conversion, Google recommends the first one. New Customer Only fits when the acquisition budget is limited or when your conversion goals are not purchases, such as leads for a plumber or a dentist.
The goal works in Performance Max, Search, Shopping, and Demand Gen campaigns. How Shopping campaigns are run in general is in the guide to Google Shopping campaign management. This article covers this one goal.
How Google knows who is a new customer
The first source is automatic. When you optimize a campaign for new customers and already track purchase conversions, Google builds an audience list from campaign activity and tracked purchases from up to the last 540 days. It treats those people as existing customers. This is the easiest method, but Google recommends adding your own lists to it. Autodetection does not work with offline conversions.
The second source is your own lists. These can be Customer Match email lists, website visitors, app users, Google Analytics lists, and YouTube lists. For any lifecycle goal a list needs at least 100 active members in at least one network. A separate threshold appears in the Performance Max bidding setup: the checkbox that limits bidding to new customers needs an audience segment with at least 1,000 active members in at least one network. The customer type in Audience Manager must match who is really in the list. For more on lists, see the guide to Customer Match lists in Google Ads.
The third source is a parameter in your purchase event. It is new_customer with the value true or false, and for Google Analytics customer_type with the value new or returning. The parameter is recommended but not required, and the reports behind it work only with Purchase conversions. On Shopify with the Google & YouTube app it is set up automatically. The details are in Google’s help page on the new customer parameter.
The three modes: which one to choose
| Mode | What it does and where it hurts | What you need |
|---|---|---|
| New Customer Value | Bids higher for new customers than for existing ones. Reach is not limited. Hurts when: the new customer value adjustment is too low: the report shows a high share of returning conversions | A Purchase conversion and Maximize conversion value or Target ROAS |
| High Value New Customer | Bids higher still for new customers who look like your best ones. Hurts when: lists are incomplete or stale: Google is worse at telling whom to bid up for | The same conditions, only in Performance Max and Search campaigns, your own definition of a high-value customer, and a list of those people |
| New Customer Only | Bids only for new customers, and a separate campaign covers existing ones. Hurts when: narrows reach. Some traffic still comes from returning customers because of Apple’s limits | A Purchase conversion is not required: fits a limited acquisition budget or leads |
For a starting value, Google suggests setting a new customer at twice the value of a regular one, then adjusting by performance. It is a direction, not a rule. My practice is this: a store starts with bidding higher for new customers rather than New Customer Only. A service business that collects leads without a Purchase conversion is left with New Customer Only, and it needs a list of existing customers.
Steps: how to turn it on and what to check
- For the modes that bid higher, set up a Purchase conversion action with Website as the source and make it Primary. If you are not a retailer, purchase conversions must have been recorded in the last 30 days, or you must add an existing customer list.
- In the Goals menu open Summary, and in the Customer acquisition panel select Configure. Add lists to the modes you use (on the panel they may appear as New customers and New customers (high value)) and set the segment values.
- In the campaign, open Campaign settings, expand the Customer acquisition row, and select Adjust your bidding to help acquire new customers.
- Choose Bid higher for new customers (recommended) or Only bid for new customers. The first option is available with Maximize conversion value and Target ROAS. The second is covered in the guide to Target ROAS.
- Give the campaign 1 to 2 weeks. That is how long it needs to adjust to significant changes.
Common mistakes business owners make:
- Turning on New Customer Only in a store and then wondering why impressions dropped. Google suggests trying “bid higher” first, so reach is not limited.
- Skipping your own lists and the purchase parameter. The goal then separates new from existing customers less accurately, and the report can show a high share of returning conversions.
- Reading a report that reaches back before the goal was enabled. That data is labeled Unknown.
When this does not apply
Without a Purchase conversion, New Customer Value and High Value New Customer are not available, and New Customer Only remains. The goal’s reports cover only purchases: other conversions are classified as Additional conversions.
A Performance Max campaign that targets store sales is compatible only with New Customer Only. New customers there are identified from past online purchases and from your lists, and the reports have no data on new customers or store sales.
A list below 100 active members will not work for lifecycle goals, and the checkbox that limits bidding to new customers in a Performance Max campaign needs at least 1,000. To raise the match rate of a Customer Match list, supply several match keys: more than one email address, a phone number, and a zip code.
Questions and answers
Which mode should an online store choose?
Start with bidding higher for new customers. Google recommends it for everyone who has a Purchase conversion set up, and it does not limit reach. The modes are described in Google’s help page on customer lifecycle goals.
Does the goal fit if I collect leads, not purchases?
Only New Customer Only fits, and it needs a list of existing customers. Autodetection relies on purchases and does not work for offline events.
When will I see a result?
A campaign needs one to two weeks to adjust to significant changes. In the report, look at the period after the goal was enabled.
The step-by-step version is in my book on Google Ads for business owners. It shows how to set up this goal together with Shopping campaigns and purchase tracking.
My e-book “19 Google Ads Secrets”: how to get the most out of Google Ads without draining your budget, drawn from real campaigns and tests.
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