Most advertising is focused on getting the next conversion. But the real question isn’t if someone buys – it’s if they become a customer that keeps buying. That difference between one-time sellers and long term customers is drastic in terms of business profitability.
Google’s Performance Max now offers customer acquisition modes that are aimed at addressing this challenge. Rather than comparing all conversions equally, these features allow you to inform the algorithm which customers are most important to you and make bids accordingly. The result is campaigns optimized not for immediate sales, but for the customers who are most likely to produce value for the longest time.
Here’s how these modes work and how to use them to your strategic advantage.
Performance Max now provides customer lifecycle goals that move optimization from wanting to just count conversions, to thinking in terms of customer value. These goals understand that it’s more valuable to acquire a new customer that makes repeat purchases, than it is to re-convert someone who already made a purchase with you.
The new customer acquisition goal helps you prioritize bidding to get in front of people that have not purchased before. Within this goal, you can select different modes that dictate how aggressively the algorithm will pursue new vs. existing customers.
The goal of retention compliments acquisition by focusing on keeping existing customers engaged, and re-engaging those that have gone quiet. Together, these form a framework for managing customer relationships by using paid advertising instead of chasing down transactions.
This is important because the costs of acquisition only make sense in context. Spending more to obtain a customer from whom you will receive years of profitable revenue makes perfect business sense. Spending the same amount on someone that buys once and disappears doesn’t.
New Customer Value mode is the most versatile approach to customer focused bidding. When they are turned on, you assign an additional value to conversions from new customers. The algorithm then incorporates this premium in bidding decisions, being willing to pay more when the likelihood of the converter not having been bought before.
The practical effect is subtle, but significant. Rather than bidding the same for all possible converters, Performance Max gets more competitive in auctions where it understands that the user is new to your business. This changes budget allocation in favor of acquisition without completely neglecting existing customer conversions for acquisition.
You set the value of the new customer in light of your understanding of lifetime value. If your average new customer earns a lot of money above and beyond her or his first purchase, you can account for that in the premium. The algorithm uses this signal in conjunction with conversion data to predict which of the prospects may be valuable long-term customers.
Campaign reporting now includes dedicated columns indicating new customer acquisition costs so you have visibility to what you are actually paying to grow your customer base as compared to simply holding existing relationships.
Rolled out broadly in early 2025, there is another layer of sophistication in this high value new customer mode. Rather than treating all new customers equally, in this mode you can find out who your best existing customers are and identify your new prospects who are similar to them.
With Customer Match, you upload lists of what “high value” means to your business. These could be customers who buy frequently, buy in different categories, have subscriptions or refer customers. Google’s AI analyzes these lists and figures out patterns that predict high lifetime value.
When placing bids, the algorithm then prioritizes prospects with characteristics that are similar to your high-value customers. You can assign different value premiums to high-value new customers and regular new customers to create a tiered approach by allocating a budget based on predicted long-term worth.
The reporting distinguishes between the total number of new customers acquired and how many qualify as high value based upon your definitions. This visibility aids in assessing whether or not campaigns are actually reaching the right types of customers that grow business.
Some businesses have rigorous separation between acquisition and retention budgets. New Customer Only mode deals with this by excluding existing customers from bidding altogether. The algorithm optimizes only for new customer conversions.
This approach works well if you have dedicated acquisition targets, or if there are existing customers that are managed through separate channels. Lead generation campaigns often benefit from this mode since re-converting existing leads usually isn’t the target.
The tradeoff is obvious; you have to have separate campaigns to target existing customers when using this mode. The budget won’t flow to high intent existing customers even where they’d convert easily. For businesses that want to have unified campaigns, New Customer Value mode is a less restrictive alternative.
Implementation requires both campaign configuration as well as customer data. The campaign settings allow you to choose which customer acquisition mode to use and set the value premiums for the new or high-value customers.
The customer identification side requires more attention. Google can automatically identify new vs. existing customers based on conversion history that goes back to over a year. This works reasonably well but has its limitations with users able to clear cookies or use different devices.
More reliable identification is available by uploading customer lists by Customer Match. Your CRM data, purchase records and email lists give you hard signals of who has already converted. Keeping these lists up to date ensures the algorithm has proper information to make bidding decisions.
For high value new customer mode in particular you also need to define, and upload, your high value customer segments. This involves knowing which customer characteristics are associated with long-term value in your business purchase frequency, order values, product categories or engagement patterns.
The value that you give to new customers has a direct effect on the aggressiveness of bidding. Setting it too low gives insufficient signal for the algorithm to give acquisition any meaningful priority. Setting it too high skews reported performance and can result in overspending.
Start with actual lifetime value data, if you have it. What’s the average total revenue from customers acquired during previous years? What’s the margin on that revenue? How does the cost of acquisition compare with the lifetime profit?
If you don’t have precise figures on lifetime value, reasonable estimates work. Consider average purchase frequency, average customer life, average order value. A customer who regularly makes 4 purchases at similar amounts to their first is worth 4 times their initial conversion.
Remember that adding value to new customer conversions doesn’t necessarily reduce value assigned to existing customer conversions. You may need to adjust ROAS targets in order to keep efficiency expectations as reported values increase.
Customer acquisition modes are most effective as part of a larger lifecycle strategy. Acquiring high-value customers is less important if they don’t actually become high-value due to repeat engagement.
The retention goal and re-engagement mode complements acquisition and helps you win back customers who’ve gone dormant. You define what “lapped” means for your business, maybe customers who haven’t bought anything in six months or a year. Uploading these segments and assigning appropriate bid values indicates to the algorithm to go after re-engagement opportunities.
This creates a cycle in which acquisition leads to bringing in customers likely to create long-term value, while retention work maintains relationships and re-engages those that are drifting away. Both add to overall lifetime value and both benefit from the cross-channel reach of Performance Max.
Many content marketing companies find this lifecycle approach especially relevant as content-based customer relationships can often take a long while to develop.
Standard conversion metrics don’t tell the whole story when it comes to optimizing for lifetime value. Campaign reporting now comes complete with customer acquisition cost columns that illustrate what exactly you’re paying for new customers as opposed to overall conversions.
Beyond campaign metrics, tracking real customer behavior over time gives validity to whether your high-value targeting is working. Do customers acquired through high value new customer mode actually generate more lifetime revenue? Does the premium you paid for them prove to be justified by subsequent purchases?
This longer-term measurement will require the connection of advertising information to customer analytics. The payoff is having some understanding of whether the lifetime value optimization really does translate into business results and not just campaign metrics.
For businesses operating small business social media advertising in conjunction with Performance Max, customer data integration across channels allows for a more complete picture of where acquisition is coming from and customer value.
Performance Max’s customer lifecycle goals turn campaigns from being conversion-focused to customer-focused. New Customer Value mode, high value new customer mode, and retention features work together to optimize for the customers likely to develop long-term business value. Implementation is required both in terms of campaign configuration and customer data with Customer Match, while success relies on both the accuracy of lifetime value calculations as well as the ongoing measurement of true customer behavior.
New customer acquisition mode is a bidding feature that places more importance on reaching out to people who have not made a purchase with your business in the past. You can either choose to bid higher for new customers but still convert existing customers, or only bid for new customers depending on your acquisition strategy.
High value new customer mode uses Customer Match lists of your most valuable existing customers to identify prospects with similar characteristics. The algorithm then prioritizes getting new customers that resemble your high-value segment with adjustable bid premiums for various customer types.
Calculate based on actual/estimated customer lifetime value Consider average purchase frequency, typical customer tenure and profit margins beyond the first transaction. The value should be based on realistic long-term worth, not inflated numbers that misrepresent the reporting of performance.
New Customer Only mode is best used with stand-alone acquisition budgets and separate campaigns for existing customers. New Customer Value mode is suitable for businesses that wish to have unified campaigns with a focus on new customers but don’t want to entirely disregard existing customers from conversion opportunities.
By favoring customers who are likely to generate long-term revenue over others, and not treating conversions equally. The algorithm spends more to acquire high-value prospects while retention modes are helpful in maintaining existing customer relationships that increase overall lifetime value across your customer base.
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