In Google Ads, audience settings can be applied in two ways:
- Observation
- Targeting
Observation audiences allow you to monitor how different audience segments perform within your existing campaigns without restricting who sees your ads.
The difference between the two are that observation collects audience data, doesn’t restrict traffic and ideal for testing and learning.
Whereas targeting restricts ads to selected audiences only and narrows reach. This is best used when audience performance has already been proven.
Audience observation allows advertisers to gather valuable behavioural insights without limiting campaign reach. It helps you understand who is interacting with your ads, which audiences convert best, and where your budget should be allocated for stronger performance.
For example, if you run a campaign targeting “composite bonding London,” you can add audiences such as:
- In-market for cosmetic dentistry
- Affinity audiences for beauty and wellness
- Website visitors
- Customer match lists
Google will continue showing ads to everyone searching for your keywords, but you’ll gain data on how these audiences behave compared to the general market.
This creates an opportunity to make smarter optimisation decisions based on real user behaviour.
Why does audience observation matter?
Audience observation helps reveal who is most likely to convert.
You may discover that:
- Certain age demographics produce lower CPA
- High-income household segments generate more qualified leads
- Specific affinity audiences engage more with your ads
Without observation mode enabled, these insights are often hidden.
Understanding audience behaviour helps businesses refine messaging, landing pages, and overall targeting strategies.
In Google Ads, this can help improve bid optimisation.
Once sufficient data has been collected, advertisers can apply bid adjustments based on audience performance.
For example:
- Reduce bids for low-performing demographics
- Allocate more budget toward audiences with stronger ROAS
This allows campaigns to become progressively more efficient over time.
Instead of relying solely on keyword intent, advertisers can layer audience intent on top of search intent.
Get in touch if you want to find out how you can better use your audiences in google ads!
