New Customer Acquisition
Is Stalling - Check These
5 Things Today
When new customer acquisition stalls, check five things: a sale or promotion distorting the year-on-year comparison, changes to the checkout or conversion funnel, extra spend in the wrong channel, a higher target ROAS pushing spend towards warm audiences, and audience saturation. Scaling Google Ads by 40% while sales stay flat simply raises new customer acquisition cost if another channel creates the demand. Check factors outside the ad platform first, then work inwards.
Tip
Start outside the platform & work your way inwards. Starting inside the ad platform without assessing the outside first can lead to misinformed decisions - causing additional damage to performance as you start making tweaks and changes that were actually never the problem to begin with, disrupting campaign stability.
How do sales and promotions affect new customer acquisition?
Sales and promotions pull new customer demand forward, so the period after a sale naturally shows flatter new customer volume, and comparing it with a year that had no sale makes acquisition look worse than it is.
If for example you ran a sale last quarter and didn't last year, and are now comparing last month to the same month last year, you've got an apples to oranges scenario.
Yes, the months are the same, but you've pulled forward demand with a sale - dragging forward those new customer sales that you would've had last month, but instead captured with the discount. As a result, your new customer volume will naturally be more stagnant whilst you start to rebuild demand from scratch and top up your pipeline.
Sales periods and promos will always help entice new customers through the door because of the discount, but be wary that the following period afterwards is when the pipeline needs that topping up and nurturing.
If you're constantly running discounts, flash sales & first-purchase promos multiple times throughout the year, you are effectively conditioning your customer base to only buy when your stock is at a discount. This long term kills your ability to sell full price, hurting your top line and compressing margin. On top of that, you also train your ad platform conversion tracking to find those discount buyers - since they convert the easiest - causing a feedback loop that harms your business.
Something changed in the funnel
Changes to the checkout page, guarantees or payment methods introduce a new variable into the funnel that can reduce new customer acquisition, so rule them out before changing anything inside the ad platforms.
Easy to overlook when the pressure is on and marketing dives straight into their own channels - but taking a step back and assessing if anything has changed to the overall funnel or conversion experience can save a lot of hassle and stress.
If you've changed the checkout page, removed a guarantee, changed payment methods etc. you're inviting a new variable into the mix that can have impacts on new customer acquisition.
Look into these as a quick sense-check before diving into platforms. Once you've ruled these outside factors out, the free account troubleshoot checklist is the next step for diagnosing what's actually broken inside the account.
You've pushed the wrong channel
Only one channel creates demand while the others harvest it, so scaling a harvesting channel such as Google Ads instead of the demand-creating channel raises new customer acquisition cost without adding new customers.
Ad platforms are not siloed. When a user lands on your website, each ad platform you run will start to find this user and users like them, since they are warm traffic. When the sale occurs it's almost certain that Google Ads, Meta, Pinterest, TikTok etc. start claiming credit for the sale - leaving you with 4 platform sales, 1 unique sale.
Truthfully, there is only one engine that actually drives the demand. The rest of the channels' purpose is to harvest that demand. It can be different for each business, but typically you would see Meta create the demand earlier in the funnel, with more conversion-focused in-market channels like Google Ads converting that demand at the end.
Your job as the media buyer is to understand this engine and ensure you push the right channel within profitable limits.
For example, if you scale Google Ads 40% and sales stay flat over the buying cycle, your NCAC will increase as new customer volume doesn't follow suit. However, if you scale your engine channel - i.e. Meta - by that amount instead, you'd anticipate that new customer volume to rise and NCAC to marginally increase.
Knowing which channel is the engine is key. If you're not clear, you should be testing spend uplifts on a channel whilst keeping the rest of the mix flat. This allows you to see new customer volume and NCAC variance.
Once you know scaling Google Ads is the right call but need help diagnosing and optimising the account itself, the Google Ads Campaign Optimisation & Troubleshooting Hub covers exactly that.
Does a higher target ROAS reduce new customer acquisition?
A higher target ROAS reduces new customer acquisition because Google Ads shifts spend towards the warmest users, such as existing customers, checkout starters and add-to-carts, so ROAS rises while new customer volume falls and new customer acquisition cost climbs.
A common misconception around ROAS bidding strategies is that if you increase the target, you get better "performance". If that was the case, every advertiser would just set the maximum ROAS target and log off.
ROAS is nothing more than an efficiency metric. How much revenue do I generate for each pound I spend.
The higher the target, the more "efficient" you are. The reality is, the higher your target, the warmer your audience pool becomes. Google will shift your spend towards users who are most likely to convert - meaning existing customers, checkout starters, add to carts, email subscribers etc. will be where your spend goes. As a result, your ROAS goes up but your new customer volume starts to suffer and NCAC rises.
In reality, the uglier the ROAS performance, the more likely you're reaching cold, new audiences - provided the account is set up properly.
Paid Audit
Get clarity on if ROAS is contributing to actual growth or just making your dashboard look pretty in my full Paid Audit.
Interactive
How do you know if your Google Ads audience is saturated?
A Google Ads audience is likely saturated when the account has been consistently hitting its target ROAS, spend is pushed further and efficiency starts to fall as Google pays more per click for the last remaining conversions.
Lastly, provided the factors above are not in play, it's worth exploring whether you've reached saturation point within the audience pool.
If you've been consistently hitting your tROAS target in platform and pushed spend further but see efficiency wane out, you could be hitting that limit. Working as an e-commerce Google Ads consultant means I've become accustomed to spotting where the audience pool gets exhausted. When you start pushing more spend in, Google starts paying over the odds per click to try and scrape the last possible conversions out the bottom of the barrel.
The reality is you need to:
A) Understand where saturation point is - pulling your campaign data out and using basic logarithmic curves in Sheets is a nice starting point.
B) Start to create more demand earlier in the funnel - think Meta, YouTube Videos, Demand Gen, CTV.
Interactive
The spend multipliers above are illustrative zones, not precise thresholds — every account saturates at a different point depending on audience size, vertical and bid strategy. To find where diminishing returns actually kicks in for your campaigns, export your spend and conversion data and plot a logarithmic curve in Google Sheets.
Read more
Is your retargeting audience cannibalising your prospecting budget?
Without clear separation, you risk diluting your new customer prospecting on existing customer retargeting.
How to optimise towards new customers
The levers that override Google's instinct to re-buy existing customers - and point your budget at genuinely new demand.
How to write irresistible Google Ads copy
The RSA structure broken down headline by headline, plus a free template to build and bulk upload from.