Performance Max Strategies for Net New Customers

There’s a hidden trap in Google Ads that makes DTC brand dashboards look flawless while quietly destroying profitability. The culprit? Recycled traffic from Meta.

Because paid search and paid social audiences overlap so heavily, running Google Ads as a standalone channel becomes nearly impossible without the right setup. Ad platforms refuse to share data, and both will claim credit for the same conversion, even when that sale would have happened organically.

When I talk to DTC brands, they often proudly show off their new customer metrics: month-over-month growth, a steady upward trend, and a beautiful dashboard. But dig deeper, and you’ll find a significant portion of those so-called “new” customers are actually:

• Conversions that would have occurred anyway due to brand awareness or content marketing.You could argue that overlapping sales still count as revenue, and technically they do. But when you examine the contribution margin from those sales, they cost far more than they should and eat into real profit. In short, you lose money running ads on both platforms without proper guardrails.That doesn’t mean you should abandon one channel. Instead, you need a smarter system to measure actual customer acquisition.

Why the new exclusions matter

If you’re spending five figures or more monthly on Meta, TikTok, AppLovin, or any other top-of-funnel channel, minimizing audience overlap is critical for driving true new customer growth.

Here’s how the cycle typically plays out:

1. A user sees your ad on Facebook or Instagram.You might have earned that order anyway, but now both Google and Meta claim credit. You’re essentially paying two platforms to recycle a conversion you could have secured with just one.Since Performance Max launched, there wasn’t much you could do about this. It operated as a black box, automatically targeting the warmest traffic available: branded search, site visitors, email subscribers, and existing customers. You could bid more for new customers, but you couldn’t stop the campaign from defaulting to easy mode.A while ago, Google allowed you to exclude branded searches on Search and Shopping. But Performance Max still targeted warm audiences through YouTube, Gmail, and Display. Now, the latest updates have finally addressed this. You can force Performance Max to focus on net new customer acquisition using brand exclusions, audience exclusions, and Customer Match data.First-party audience exclusions, announced in March, are the final piece that makes this possible, though customer list matching is never perfect.

A four-step framework for net new customer acquisition

Here’s the approach my agency uses to help clients maximize incrementality.

Step 1: Exclude your brand

For smaller brands, brand exclusions aren’t always necessary. But once you’re spending real money and seeing more than 15% to 20% of your cost or revenue from brand searches, it’s time to act.

Two parts to this: First, go into your campaign settings and add a brand exclusion. If your brand isn’t listed, create a new brand list. Google will block branded queries as best it can. Second, go to the Keywords tab and add your brand name as a phrase match negative keyword, plus a few common variations. This catches anything the brand list misses.

If you exclude brand terms from Performance Max, you need a dedicated brand Search campaign and a brand Shopping campaign to capture those searches. Otherwise, you’re leaving money for competitors.

Step 2: Exclude warm audiences

Even with brand exclusions in place, Performance Max would still retarget people who visited your site, opened your emails, or engaged with your brand on YouTube, Gmail, Discover, and Display. A large portion of your spend still went to warm traffic.

Now you can change that. Go to your campaign settings and find the new audience exclusions option. Build a few remarketing lists:

• All website visitors: Capture this through the Google Ads pixel or Google Analytics.Once you exclude these audiences, Performance Max can only target people who haven’t meaningfully interacted with your brand. I recommend choosing an engagement metric that fits your business goal, such as cart adds rather than visitors from the past seven days.Step 3: Exclude existing purchasersThis is the same idea but specifically for past buyers. You can do it two ways: through a pixel-based audience that captures anyone who triggered a purchase event, or by uploading your customer list directly. Shopify now allows Customer Match lists inside the Google Shopping app, and Klaviyo can do this too.Add these audiences to the exclusions section. A caveat: audience matching is never 100%. If you upload a list of 1,000 people, Google might match only 900. But going from targeting all existing customers to maybe 10% of them is still a huge win.Step 4: Use ‘New Customer Bidding’ in campaign settingsThe final step is to tell the campaign explicitly that you want new customers. Under customer acquisition settings, you’ll see two options: bid only for new customers, or bid higher for new customers. Both require a connected customer list.The “only new customers” option is the most aggressive. The campaign simply won’t bid on existing customers. Combined with audience exclusions, this gets as close to pure new customer acquisition as Performance Max allows.The “bid higher for new customers” option is more flexible. You set a dollar value representing the additional value of a new customer, and the system bids more aggressively when it thinks an auction will result in one.Be careful here. If you tell Google a new customer is worth an extra $100, and you get a $200 sale from a new customer, Google reports it as $300 in revenue. That extra $100 is fictional and will inflate your ROAS numbers. Our recommendation is to use a small placeholder value, like a penny or a dollar, to nudge the system without distorting reporting. Or use a number that genuinely reflects the lifetime value premium of a new customer.

What to expect from this approach

It’s still early, so firm conclusions aren’t possible yet. But based on my experience managing PPC for ecommerce brands, here’s what I anticipate.

Many advertisers who abandoned Performance Max did so because it was simply recycling Meta traffic. By splitting it out, you force it to target net new traffic. This will likely benefit brands that don’t have extensive video creative for YouTube, another platform where brands try to drive net new acquisition at the awareness stage.

One key difference between Performance Max and Demand Gen is that PMax is much more conversion-focused. Any brand considering excluding branded Search and Shopping from Performance Max should also consider this tactic, as it tends to over-index on hot traffic.

In terms of outcomes, I expect the reported ROAS attributed to Performance Max to be lower than in the past. But when you examine the breakdown of new versus returning customers, it should align much more closely with new customer acquisition. Without advanced configuration, you might see a 60/40 split, even in the best situations.

Limitations and realistic expectations

Nothing about this is foolproof. Audience exclusions don’t match perfectly. Brand exclusions don’t catch every variation. Customer Match has gaps. So even with all four steps in place, some percentage of your spend will still hit warm audiences.

But for the first time, you have the levers to push Performance Max into upper-funnel territory. You can make it work like a real prospecting channel instead of a retargeting channel that claims credit for demand created elsewhere.

This matters most for brands spending heavily on Meta, TikTok, or other channels and wanting Google to actually grow the customer base rather than recycle traffic. If you’re seeing strong ROAS in Performance Max but flat new customer numbers month over month, this framework is for you.

If you’re a smaller brand still finding product-market fit or building initial momentum, this is probably overkill. Let Performance Max do its thing without too many restrictions.

But once you’re scaling and the question shifts from “Can we be profitable?” to “Can we be profitable while growing the customer base?” these settings become some of the most important levers you have. Every click they win is a customer you lose.

Google’s giving you more control over PMax. Use it.

The conversation around brand versus non-brand is everywhere. You can’t attend a paid media event without hearing strong opinions on it. Yet almost no one seems to be testing this new option.

I just finished auditing an account spending $100,000 a month on Search with no Performance Max or Shopping, so they get purely new customer acquisition. We looked at their numbers and decided now might be the time to try this, exclude all those segments, and let it rip.

So here’s when I recommend implementing this test: if your ad spend is high enough (it doesn’t need to be $100,000 a month), or you’re revisiting Performance Max. Your hypothesis should be that this approach increases the proportion of actual new customer conversions. I think you’ll find the needle moves further than you expect.