Utilizing Customer Acquisition Goals In Google Ads

According to Wordstream, 2024 has brought about increased cost per click and cost per lead numbers year over year. This is why every ad dollar matters; acquiring new customers is more important than ever. Google Ads' new customer acquisition feature can be a great add-on for businesses looking to reach and convert customers who have not yet engaged with their brand before.

However, using new customer acquisition effectively requires a strategic approach. Just turning the feature on won’t automatically deliver new customers. To maximize this new addition, you need to set the right campaign parameters, monitor performance data closely, and follow certain steps. This guide will explore how to leverage new customer acquisition in the right way to elevate your new customer acquisition efforts.

Understanding Google's Identification of New vs. Existing Customers

At the core of the new customer acquisition goal is Google's ability to distinguish between users who have already converted for your business and completely new prospects. Google utilizes three main methods to classify customers as new or existing:

Conversion Tracking Tags

  • This method provides the highest level of control. It uses a custom conversion tracking tag to explicitly label each conversion as “new customer,” “existing customer,” or “unknown.” You’ll need to work with your developer to insert this specialized tag on your conversion pages and pass through the appropriate parameters. This option is the most preferred as it is the most accurate as well as does not require a manual upload. 

Customer List Uploads

  • Similar to audience-based targeting you can upload your own first-party data through customer match lists. Google will designate any user not found on your uploaded list as a new customer. You can include up to five customer lists to cast a wider net around your existing audiences. Ensure your lists contain at least 1,000 entries each for optimal matching. This method ensures accuracy but relies on consistent uploads to make sure that the data is in fact accurate. 

Google’s Automatic Detection

  • This default method is enabled when you select the “new customer” acquisition goal. Google analyzes your account’s conversion data from the last 540 days to create an audience list of existing customers. Those not on that audience list will be designated as new customers. This option is the least preferred in terms of accuracy as well as performance

Potential Issues With New vs. Existing Classification

There is the potential, with anything in regards to digital marketing, where there could be some inconsistencies in the data. In this case, there may be a couple of situations where a current customer may be grouped into the new customer classification. This includes:

  • Identification Limitations: Instances where Google may not be able to definitively identify an existing customer, such as browsing on a new device, clearing cookies, or converting through a different channel.
  • Multi-Conversion Scenarios: If a single ad click results in multiple conversions, Google will count all those conversions towards your campaign goals.

Initial Issues of Usage

In order to use the new customer acquisition feature correctly, see below for some of the typical issues that newcomers to the optimization process are seeing:

  • Sharing Customer List Data: Ensure customer lists are shared with the same Google Ads account running your new customer acquisition campaigns for accurate matching.
  • Conversions Classified as ‘Unknown': Minimize instances of conversions labeled as “unknown” to improve audience segmentation.
  • Bid Strategy Alignment: Align your campaign’s bid strategy with the specific new vs. existing customer signals provided to Google.
  • Overstated Conversion Values: This new feature could have some potential issues blending with current Google conversion values. For example, if you list new customers with a value of $100, Google will then add in that $100 into the overall conversion value for the account, which could skew overall metrics.

Best Practices for New Customer Acquisition

When first utilizing new customer acquisition campaigns, start slowly by assigning a very low “new customer” value, such as $0.01. This allows you to monitor performance and isolate new customer data without inflating conversion values. Creating an “active customer” audience segment as a negative exclusion list will help you clearly define what constitutes a new customer for your business.

Add the “New Customers” and “New Customer Lifetime Value” columns to your reports to assess actual new customer conversions and the total assigned premium value. Calculate the real-world impact on overall ROAS and revenue before ramping up your new customer valuation and bid strategies.

By precisely assigning your new customer definitions, slowly testing with minimal inflation, and closely monitoring segmented data, you can accurately measure the impacts of your new customer acquisition efforts from the start. Leveraging Google Ads’ new customer acquisition feature effectively can significantly enhance your marketing efforts. By following these best practices, you can strategically reach and convert new prospects, driving growth for your business.