*EDITOR NOTE: Hey it's me, Kirk. I originally wrote this article about Smart Shopping and because it's been such a popular post, I wanted to rewrite it to reflect how New Customer goals work in PMax now that SSC is deprecated. That being said, there may be things I missed when I transitioned the post (a lot is the same, but things about NCA goals have changed over time), so if you catch that please don't hesitate to let me know (Open DMs on Twitter or LinkedIn) so I can correct it. Yay for accuracy!
Let's talk Performance Max New Customer Acquisition conversion goals. I can hear your heart beating faster already from the anticipation of that first sentence. What joys and excitement must lie ahead of us with such an opening! Self-teasing aside, as I have written previously, it is alarming that Smart Shopping campaigns (SSC) do not reveal how much traffic they are sending to remarketing lists (return visitors), and non-remarketing lists (colder, more upper funnel visitors... though not necessarily upper funnel. They're just not remarketing visitors.). It's worth noting that PMax (Performance Max campaigns) now have that same reporting issue.
There has long been an advertiser concern of whether SSC, and now PMax, actually does raise incremental value for a business, or whether it simply leans too heavily into remarketing visitors on say, YouTube and GDN. If the latter were true, this of course would be a completely unfair analysis when comparing Performance Max to Standard Shopping campaigns... especially since Standard excels at targeting more upper funnel searches not always visibly evident with tracked sales, and thus will always lose a lower funnel tracked sales match with PMax... which has been found guilty by more than one marketer at going hard after Brand terms, for instance.
"Don't strangle the funnel", one might caution.
This has been on Google's radar for quite awhile based on conversations I've had with Googlers since the beginning of the SSC campaign type so when they first introduced their New Customer Acquisition conversion options I was excited. This appeared to be a way to segment new and return people, and to target new customers more aggressively than those who would simply re-purchase through a brand search, or email program anyway... i.e., no incremental value allowed.
As with everything Smart Shopping and now Performance Max, it seems, the more I have researched these, the more it seems prudent to discuss the cautions not immediately visible in this new addition to an already controversial program type. The program itself isn't necessarily a failure, but there are some crucial concerns to consider if you are interested in implementing New Customer Acquisition goals (which we have found value in testing, by the way).
1) New Purchasers, Not Visitors.
Wow, it would be great to now identify what spend levels are going towards remarketing and not cold audience growth within Performance Max, right?! Hold up, screeching brake noise.
This doesn't show you that.
This is new purchasers, not visitors.
That difference is important to understand. This means you can adjust your conversion targets in your PMax campaigns based solely on whether a person (tracked, of course) has converted within the past 540 days.
Do you want to know how many of your PMax conversions are coming from return visits and new visits? You still can't know that through the Google Ads UI (there are ways to hack together insights with Google Analytics to do this, but not in Google Ads).
I think this is an important point to be aware of, and unless you are advertising for a store with a lot of repeat visits, this might not be as helpful for you as initially you thought.
2) Inflated (made-up) Conversion Values Reported
This is really my primary concern, and is one that shouldn't be taken lightly.
Here is how the system works. You sell a product for $100. You tell Google that a new customer is worth $50 more to you than a return customer. You have done lots of math and cool equations, and know your customer well. Nice work!
Here is what Google does with that, now that you have told them you value a new customer $50 more. THEY ADD $50 TO YOUR REPORTED "CONVERSION VALUE" COLUMN.
Note, this will impact your reported ROAS (conv value. / cost) as well.
"Wait! Just a second! I think a new customer is $50 more valuable than a return customer, but that doesn't mean I want to add $50 of fake money to my reported revenue! My revenue is what it is, where did that $50 come from? It's simply the value I place over the return customer!" You exclaim to Google. *crickets* is the reply.
This means if your company actually makes $100 from that new customer sale, Google Ads is now reporting your conversion value tracked to PMax as $150. It's literally a made-up $50 that gives PMax more credit than it should receive, and to be honest, that angers me a little. Sure, conversion value doesn't necessarily equate to revenue, but I would argue that's the primary way conversion value is understood by most users... which means it's messing with our reported revenue numbers.
Now, admittedly, you can get an idea of conversion value attributed from the NCA goal by checking out the columns now available in the UI:
Watch Out for Bad Actors
I'm going to tell on my agency neighbors who may have bad intentions here. This also means, your PPC agency could be doubling their reported conversions for PMax whenever it is a new customer. What is to stop an agency (or employee!) from taking over an account, adding $500 fake revenue to every new customer purchase from PMax, and then reporting their overwhelming success while you are stuck scratching your head wondering why their numbers aren't adding up to your internal numbers."Attribution" they tell you."Riiiiiggggghhhhhttttt....." is my response. As always, hiring someone you trust is essential for things like this, that you may not even realize are happening. Character counts.
3) Unnecessarily Over-complicated. Bonus: My Recommendation
While adding fake money to an account is always a bad idea, calculating various estimates of revenue you want to over-value your new customers at is also quite complicated. And, in my opinion, it is also quite unnecessary.
I would suggest what I believe to be a better route:
Most Ecommerce accounts we manage already have a basic view of the value between their return and new customers (heck, even visitors!), and this is nearly always (in my experience) reflected in ROAS goals.Whereas we may have a 2x (200%) ROAS goal for new customers, we might have a 5x (500%) ROAS goal for repeat customers.
So my suggestion to Google, is to ditch the crazy math addition scheme of adding fake money into the reported sales of the account, and simply allow us to tell you the two separate ROAS goals we want your system to aim at. Then we could see reported ROAS and revenue values, using the actual revenue tracked to those goals (no fake money required) segmented between new/returning. Just a thought!
Finally, I have two suggestions. If you're not sure what you think about this, test it in one of your accounts by adding targeting your PMax campaign to only New Customers at $0.01 value and then monitoring performance. You can also add in multiple Customer lists (including remarketing lists if you really want to aim at new people!):
Then you can see what sort of insights you uncover from your own testing without tanking your reporting with (too much) made-up revenue. Second, add in the conversion columns for "New Customers" into your Google Ads reporting so you can begin seeing how many Google is reporting as coming through your Pmax campaigns. It's not new visitors, but at least it's more information than we used to get!
With the data black hole that is Performance Max, we'll take all the insights we can get.