Google recently released a new feature for Smart Shopping Campaigns (SSC) – ‘new customer acquisition’ goal. It infers this increases the number of new customers those campaigns acquire.
Smart Shopping campaigns optimise conversion value for both online sales and new customer acquisitions. Conversion value for new customers is the sum of the purchase value and the new customer value you set. The combined value is attributed to a purchase made by a new customer.
So the value of any purchase conversion is increased by including the assigned new customer value when ‘new customer acquisition’ is enabled in your conversion goals.
As such, there are a couple of crucial concerns to consider before implementing this option:
1. The distinction between new customer and new visitors can be misunderstood.
This initially appeared to be a way to segment new and return visitors and to more accurately target which of those are new customers. This would be appealing because the data that’s provided within SSCs is limited and doesn’t reveal how many impressions they are sending to remarketing lists (return visitors), and non-remarketing lists (new visitors).
Enabling the ‘new customer acquisition’ option still doesn’t do this though, as crucially these are new purchasers, not necessarily new visitors. (Google uses its own data to define who it sees as a new customer, but recommends the advertiser supplements this with customer matching for Google shopping. This would be critical to do, rather than just faithfully enabling the ‘new customer acquisition’ option).
This is an important difference because it means it’s still not possible to tell within the Google Ads UI how many SSC sales conversions are coming from return visits and new visits, which would then allow the adjustment of the conversion / ROAS targets accordingly.
This just allows that adjustment to be made on whether any visitor has converted within the past 540 days. So this concern is important unless the advertising is for a store with a lot of repeat visits, as enabling the ‘new customer acquisition’ might not be as helpful as initially thought being for new purchasers, not necessarily for new visitors. So having a sizeable list of previous visitors would help towards generating ‘new customers’.
(There is already advertiser concern that SSCs lean too heavily into remarketing visitors on YouTube and GDN for example).
2. The new combined conversion value can be misconstrued.
As the new conversion value is the sum of the purchase value and the new customer value you set (e.g. $50), this would increase a sale for $100 to a reported value of $150. Unless advertisers are aware of this crucial distinction it would be easy to assume the SSCs are performing much better in returning revenue than before implementing the ‘new customer acquisition’ option.
This could project an inflated ROAS and in turn encourage an increase in budget as the improvement is perceived to be worthwhile enough to scale the inferred improved ROAS.
Google has said they are planning to introduce separate columns for online sale and ‘new customer’ values but as this hasn’t been done yet, it’s important to understand that the increased value is due to those being combined, rather than the ‘new customer acquisition’ actually improving SSC sales revenue performance.
Furthermore, unscrupulous agencies could take advantage of this inflated revenue by indicating a significant increase in the conversion value overnight, just by implementing the option and showing exaggerated value of their service through combining the sale and ‘new customer’ values. This could lead to a decrease in the actual ROAS for a client, especially if the ‘new customer’ value assigned by an agency is set to a large amount.
In our opinion, the two points above show that Google’s new ‘new customer acquisition’ goal option is somewhat misleading and could be costly if it results in the budget being increased due to reportedly higher, (combined) conversion values.
Transparency would be achieved by Google allowing ROAS goals to be set separately for sales from returning visitors e.g 500% and for new visitors e.g 200% (to reiterate, rather than ‘new customers’ which aren’t necessarily new visitors). As returning visitors usually tend to convert at a higher rate (and showing those in two distinct columns). That way the advertiser would be more likely to benefit than Google, so we’d be surprised if this change is made anytime soon.
Before implementing any of Google’s SSC features or any ‘Smart’ campaigns as a whole (or automated bidding strategies), we highly recommend that you please get in touch with us first, as the apparent simplicity of such options often isn’t beneficial and they should be meticulously scrutinised prior to proceeding to prevent any real-world detrimental impact to a business.