Most PPC accounts treat every click as equal. The same bid goes to a first-time visitor from a broad match keyword as to a previous customer who visited your pricing page yesterday. This is an enormously inefficient approach when Google Ads provides the tools to differentiate between these audiences and bid accordingly. Proper audience targeting does not just save budget; it actively improves performance by concentrating spend on the users most likely to convert.
What Are the Main Audience Types Available in Google Ads?
In-Market Audiences
In-market audiences are groups of users that Google has identified as actively researching or comparing products and services in a specific category. Google builds these segments by analysing search behaviour, content consumption, and page visits across its network. When a user searches extensively for "business insurance UK," visits multiple comparison sites, and clicks through to policy pages, Google may classify them as in-market for "Business Insurance."
In-market audiences are available for hundreds of categories spanning financial services, real estate, home services, travel, vehicles, technology, and many others. They are most useful as bid adjustment layers on top of your keyword targeting: apply a 20 to 30% positive bid adjustment for in-market audiences that closely match your customer profile and observe whether their conversion rate justifies a higher bid over several weeks.
Affinity Audiences
Affinity audiences represent broader lifestyle and interest segments: "Outdoor Enthusiasts," "Business Professionals," "Foodies," and similar. They are typically less precise than in-market audiences because they reflect general interests rather than active purchase intent.
Affinity audiences are most useful for brand awareness campaigns and Display network targeting, where you are reaching audiences at the top of the funnel before active intent has developed. They are generally less effective for Search network campaigns where keyword intent already indicates commercial interest.
Custom Intent Audiences
Custom intent audiences let you build your own audience segment based on keywords people have searched for, URLs they have visited, or apps they have used. This is more precise than Google's pre-built in-market segments because you define the intent signals yourself.
For example, a competitor intelligence custom intent audience might include the URLs of your two or three main competitors' pricing pages. Users who have visited those specific pages are actively comparing options and represent a high-value audience for targeted bidding or dedicated campaigns.
Customer Match
Customer Match allows you to upload a list of customer email addresses (or phone numbers, physical addresses) and target those specific users with ads. Google matches your uploaded list to Google account holders and creates a targetable audience.
Customer Match is valuable for:
- Retention campaigns: Target existing customers with upsell or cross-sell messages
- Exclusion from acquisition campaigns: Prevent existing customers from seeing new customer acquisition ads (which may offer promotions you do not want to extend to existing customers)
- High-value lookalike expansion: Use your best customer list as the seed for Similar Audiences
Data must be handled in compliance with UK GDPR when uploading to Customer Match. Ensure you have a lawful basis for processing and that your privacy notice covers this use.
Similar Segments (Similar Audiences)
Similar Segments (formerly called Similar Audiences) use Google's machine learning to find users who share characteristics with people on your existing remarketing lists or Customer Match lists. If your customer list converts well from a particular demographic or behavioural profile, Similar Segments can find new users who match that profile for prospecting campaigns.
Similar Segments work best when the seed list is large (at least 1,000 users) and the seed audience converts reliably. A seed list of all website visitors will produce a broader, less targeted similar segment than a seed list of customers who have spent above £500.
Remarketing Lists
Remarketing lists target users who have previously visited your website. These are covered in detail in our RLSA guide, but from an audience targeting perspective, remarketing is the most reliable source of high-intent traffic in any Google Ads account: previous visitors have demonstrated explicit interest and convert at rates typically two to five times higher than cold traffic.
How Do You Layer Audiences Effectively?
The real power of Google Ads audience targeting comes from layering. Rather than using a single audience in isolation, you apply multiple audience signals together to create targeting combinations that are significantly more precise than any individual signal.
Bid-Only Layering (Observation Mode)
The most flexible approach is to apply all relevant audiences in "Observation" mode to a campaign, then set bid adjustments based on each audience's observed conversion rate. This does not restrict your ad serving; it lets you bid higher for users in multiple audiences simultaneously.
For example:
- In-market for your service category: +25%
- Visited your pricing page in the last 30 days: +50%
- On your Customer Match list: +30%
A user who is in-market AND has visited your pricing page AND is on your customer list would receive a combined bid uplift that appropriately reflects their elevated conversion probability.
Targeting Mode Layering
For specific campaigns, use audiences in "Targeting" mode to restrict your ads to only show to users in defined audience segments. This is effective for:
- High-value remarketing campaigns running very broad match keywords
- Reactivation campaigns targeting lapsed customers with specific messaging
- Campaigns with premium creative that is only relevant to specific segments
Cross-Channel Audience Building
Your PPC audiences should be informed by your CRM data, email marketing lists, and website analytics. A CRM segment of "high-value customers who have not purchased in 12 months" is an excellent seed for a Google Ads reactivation campaign. Connecting your data sources produces more precise audience targeting than relying solely on Google's own data.
What Bid Adjustments Should You Apply to Audiences?
Bid adjustments for audiences should be data-driven rather than guesswork. The process is:
- Apply audiences in Observation mode and collect two to four weeks of conversion data
- Calculate the conversion rate for each audience versus your campaign average
- Apply bid adjustments proportional to the conversion rate differential
If in-market audience users convert at 1.5x the campaign average rate, a bid uplift of 30 to 50% is appropriate. If a segment converts at below the average rate, apply a negative adjustment or consider excluding it.
Review bid adjustments monthly. Audience composition and conversion rates shift over time, particularly for seasonal businesses or those with changing product offerings.
What Are the Most Common Audience Targeting Mistakes in PPC?
Applying audiences without data: Setting a 50% bid uplift for an in-market audience without any conversion data to support that adjustment is speculation. Always let data guide your adjustments.
Not excluding irrelevant audiences: As important as bidding up for high-value audiences is bidding down or excluding low-value ones. If your product is only relevant to businesses (B2B), excluding consumer-oriented affinity categories can meaningfully improve efficiency.
Ignoring audience overlap: A user can be in multiple audiences simultaneously. Check for audience overlap in your reports to understand how your segments interact and avoid accidentally double-counting or over-bidding.
Using only Google's pre-built segments: Custom intent and Customer Match audiences built from your own data typically outperform Google's generic segments because they reflect your specific customer base rather than a broad population average.
Neglecting negative customer match audiences: If you are running new customer promotions, failing to exclude existing customers from those campaigns wastes budget and can damage customer relationships when they see offers they are not entitled to.
If you want PPC campaigns that use audience data intelligently to reduce wasted spend and improve conversion rates, get in touch with Dynamically for a Google Ads account audit.
