The new customer goal in Google Ads: settings and the calculation

The new customer value is future contribution margin converted into revenue

The new customer goal only pays off if the extra value per new customer is a calculation and not a feeling. According to Google's help page, Google adds this value to the purchase conversion as soon as the buyer counts as a new customer, and Smart Bidding then bids accordingly. A value that is too high buys new customers who cost more than they will ever return. A value that is too low changes nothing.

Google's starting recommendation is to set the value at twice that of regular customers. The amount suggested in the account is based on the average order value of past campaigns. Margin and repeat purchase rate do not feature in it, yet both belong in the derivation.

Because target ROAS calculates in revenue, the extra value must be in revenue too. So you convert the future contribution margin of a new customer into a revenue equivalent via your contribution margin rate:

New customer value = expected contribution margin from repeat purchases in the chosen period, minus retention costs, ÷ contribution margin rate

The contribution margin rate is the same one from which you derived your target ROAS. Only then do target and extra value stay in the same unit, and the break-even calculation continues to hold.

Worked example: €35 instead of the order value

Suppose a shop has a net basket of €80 and a contribution margin rate of 30 percent after returns and before advertising. From its shop history it knows that new customers place on average 0.6 further orders within 24 months.

Anyone who simply enters the order value of €80 sets more than double. Smart Bidding would then value new customers as if they brought €24 of future contribution margin. In the example it is €10.40.

Three adjustments shift the calculation. The period: I would choose it by how long you can wait for the money, not by the theoretical customer lifetime. Repeat purchases that again come through paid clicks contribute only their contribution margin after that ad spend. And if the margin on repeat purchases differs from the first purchase, for example because of loyalty discounts, you calculate with the rate on repeat purchases.

How much a new customer may cost in total is a separate question, covered in How much a new customer may cost. This section covers only the value you hand to Google.

New customer value, new customers only or high revenue potential?

The modes differ in what happens to existing customers. According to Google, the New customer value mode prioritises bids for new customers but still reaches returning customers. Google recommends it for all advertisers with purchase conversions.

Google recommends "New customers only" only for strict acquisition budgets or goals without a purchase, and then with a separate campaign for existing customers. It is not fully watertight: according to Google, such ads may in certain cases also be shown to returning customers for privacy and technical reasons.

I usually consider new customer value the better choice in a shop. It lets the algorithm weigh whether an existing customer with a large basket brings more than a new customer with a small one. "New customers only" shifts revenue from existing customers into other campaigns or loses it, and you cannot see that in the campaign itself.

Check whether Google means the same new customers as your shop

The best extra value achieves nothing if it lands on the wrong buyers. Google has three sources for telling them apart, and they deliver results of varying quality.

According to Google's help page, automatic detection builds a list from campaign activity and tracked purchases of the last 540 days. It captures fewer users, because cookies get deleted or the feature can be disabled. Every existing customer who is not recognised becomes a new customer and receives the extra value.

An uploaded customer list improves this but needs a clean legal basis, see Uploading customer lists to Google. The most accurate option is the new_customer parameter in the conversion tag. With it the shop itself reports whether a new customer is buying. According to Google, the 540-day window is recommended but not mandatory. Guest orders without a clear match stay undetermined.

My check before switching it on: take one month and compare the new customer share of Google's purchases with the new customer share in the shop system for the same orders. If Google is clearly higher, you are paying extra value for existing customers. Only then set up the tag parameter or the list, and set the value afterwards. More on the weaknesses of detection is in New customer or new-customer label.

Watch the counting as well. If the purchase conversion is set to "Every", Google classifies repeat purchases by a new customer within the conversion window as new purchases in the acquisition reports. The number of new customer purchases is then higher than the number of new customers.

How do you judge the result without fooling yourself?

ROAS in Google rises automatically with the new customer goal, even if not a single additional new customer arrives. The extra value lands in the normal Conv. value column. Optmyzr points out that it is added as a flat amount independent of order value, so even a small amount lifts the reported ROAS markedly. In Google, the goal flatters itself.

For the evaluation you need figures that do not contain the extra value:

• Original conv. value: According to Google, the column shows the value before value adjustments. From it you calculate the real revenue ROAS.
• New customers according to the shop: absolute number and share, using the same definition that you give Google by tag or list.
• Cost per real new customer: ad spend divided by new customers according to the shop, compared with the amount a new customer may cost.
• Contribution margin after advertising: from the original value. It may fall, but at most by the future contribution margin of the additional new customers.

A rising new customer share on its own proves little. It also rises when existing customers drop away and the number of new customers stays the same. I would therefore always look at the absolute number.

Google recommends a before-and-after comparison of the new customer share in your own analytics tools and does not support incrementality tests for these settings. As an alternative Google names Conversion Lift by geography or by users. For shops without access to that, your own geo test is the more reliable option than the before-and-after comparison, because season and promotions otherwise distort the comparison.

What changes for target ROAS

With new customer value, target ROAS afterwards measures revenue plus the extra value. If the value is derived from the contribution margin rate as above, your existing target stays right, because both are in the same unit. Anyone who instead sees the ROAS rise and raises the target to follow cancels the extra value out again.

With "New customers only" it is different. Mable describes that the old target ROAS then measures a new customer ROAS, which is harder to reach. The target has to be reset, sensibly from the first-purchase contribution margin plus the new customer value.

When the new customer goal is not worth it

The calculation does not hold if few repeat purchases follow, for example with durable one-off purchases. The future contribution margin is then close to zero, and so is the right new customer value. It holds just as little if detection is so inaccurate that a large part of existing customers passes as new, and you can set up neither the tag parameter nor a customer list. In both cases I would leave the setting out and put the value into a cleanly derived target ROAS instead.

As of November 2026. Google changes the modes and column names regularly, while the derivation of the value stays the same.