Don’t Trust ‘Performance’ Algorithms 100%

Performance algorithms will do exactly what you tell them: drive conversions at a set CPA.
That’s fine for the bottom of the funnel. But if you use the same approach for prospecting, you’re setting yourself up for disappointment.

When you tell the algo to chase the lowest CPA possible, it will:

• Serve ads to people who were going to convert anyway

• Or target your current customers who didn’t need a push in the first place — even if you “suppressed” them from targeting

That’s not prospecting.
Prospecting should be about finding net-new, cold audiences. Introducing them to your brand. Warming them up before asking for the sale.

Why it’s a problem

The main goal of programmatic — and especially prospecting — is to acquire net-new users and grow revenue, not spend budget on people who would have converted anyway.
If half your conversions are from your existing customer base, you’re not growing — you’re just paying for outcomes that were going to happen regardless.

The easiest deterministic way to check incrementality is to match transaction or order IDs from your DSP with your CRM, and break it down by tactic. This tells you exactly how each tactic performs for new users.

In my experience, lookalike audiences — and any tactic heavily reliant on finding “similar” users to past converters — score the lowest on incrementality.
On paper, platform ROAS looks great. The “common wisdom” would say, “Pour all your budget into these.”
But from a business growth perspective, it makes no sense: more than half the conversions are from existing customers.

Why it happens

Most algorithms are fed post-view, last-touch conversions without any sense of incrementality. They’re brilliant at hitting a cost target, but terrible at knowing if those conversions were truly incremental.
That’s why so many “prospecting” campaigns end up delivering the same incremental lift as retargeting.

Next steps for you

If you’re running prospecting on “LAL + CPA” autopilot, pause and ask:

• Are these users really new?

• Am I measuring incrementality, or just conversions?

• Is my inventory helping build brand credibility, or just chasing cheap impressions?

• Do I have a clear mid-funnel path before the algo takes over?

Algorithms have their place. Use them where they shine — retargeting, retention, and other bottom-funnel work. But don’t hand them your entire funnel and expect true growth.

If you want to dig into how to build a prospecting-to-conversion flow without wasting budget, Book a session with me or reply to this email and I’ll send you the outline.