What is NCA Value in Google Ads and Should I Use It?

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Ever been in Google Ads, feeling great about your ROAS and high conversion value, only to stumble upon something unexpected in your goals section?

‍‘Incremental conversion value,’ you think.  ‘What on earth could that mean?’  Well, it means exactly what you may initially think it means.  It means Google is artificially inflating your ROAS, making your account appear more successful than it truly is.

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How does this happen?

Now, maybe you remember adding this number and perhaps you do not.  There are a few different ways this could’ve happened:

1. If  you’ve had auto applied recommendations enabled, Google may have already added this number on your behalf.
2. If you are in a campaign workflow, Google will ask “would you like to bid higher for new customers?”  If you say that you do, then click a button, Google may prepopulate this new customer acquisition value for you and add it at the account level.
3. If you’ve created an existing customer audience in the conversion summary section of your Ads account, Google will prompt you to add a value to your new customers and most often this is pre-filled with Google’s recommendation.

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Why does Google do this?

Google’s New Customer Acquisition Goal is designed to prioritize bidding to new customers within Performance Max, Search, Shopping and Demand Gen campaigns.  In order to do this, they assign a higher value to the revenue that new customers generate.  This is typically calculated by reviewing AOV over the last 30-90 days and then adding additional value for potential subsequent purchases these new users may make. Google then assigns this value to your tROAS smart bidding model to bid more aggressively for these new customers.

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What should I do about it?

If you’d still like the data between new and existing customers, you can add a small amount, like .01 in order to get segmented data between new and existing customers.

‍If your new customers are worth a substantial lifetime value and you want to decrease your ROAS target to bid higher for new customers, then you can experiment with adding a value, however, you must keep in mind that your conversion value within Google Ads will not be the actual conversion value you are bringing in.

‍A good option here is to keep your new customer conversion value at .01 to see the segmentation, however, consider launching a campaign that only targets new customers.  Google has also recently launched a new column called “original conversion value,” that strips out this additional NCA value.

‍While I can see why Google would create something like New Customer Acquisition Value within Google Ads, unfortunately, most advertisers we see are unaware that it is even running within the account and are measuring their conversion value from a flawed perspective. 

‍If you do find an inflated NCA value that you don’t want, then you have a couple of options.  

1. Remove it quickly and decisively knowing that the bidding algorithm may take a few days to weeks to catch up - depending on your volume. Sidenote: Make sure that you aren’t in a sale period or wanting to capture additional impression share prior to doing this so you don’t miss out on opportunities while the bidding algo is learning.
2. Slowly lower it until you’ve gotten it down to the lower amount you want to bid for (like .01).
3. Evaluate the number and consider revising it to more accurately reflect your company’s LTV.  Measure conversion value outside of Google Ads to get an accurate representation.

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Ultimately, this could be a helpful tool, however, knowing what NCA value is and what it’s doing is the best step towards controlling your data.