Imagine you have two users. One who likes apples and one who likes bananas. Both like oranges. I sell apples and am willing to pay $1 per conversion. You sell bananas and are willing to spend the same. OP sells oranges and is willing to spend $0.75 per conversion.

If we can't tell which user is which, we know 50% of our views will lead to a conversion, so you and I will both spend $0.50 per view. The orange seller beats us and the price is $0.75 per user (assuming an old fashioned auction).

If we can tell which user's which, I can spend my $1 on the apple eater, and you can spend yours on the banana eater. Both of us will spend more than the orange seller, who is still only willing to spend $0.75 per view. The price rises to $1 per user.

Dollar per conversion is the constant, and the pile of converting users doesn't change. With less targeting, there's just more hay in the haystack. Dollars per viewer goes up as the number of viewers goes down.