PPC Audience Strategy: Targeting vs. Observation (With Examples)

There are two main components to setting up any PPC audience strategy: targeting and monitoring.

For any PPC practitioner, these two settings can either make or break performance.

It seems that it’s only when you get used to a setting or feature in these platforms that the interface changes — or worse — the options change.

This guide reviews the main differences in targeting and observation settings, and where to find them in the Google Ads and Microsoft Ads interfaces.

Targeting vs Observing: What’s the Difference?

What exactly is targeting setting and why is it important?

Using the targeting only setting means that for the audience you select, your ads will only be shown to those users.

This setting is available for all Search Network, Display Network, and YouTube campaigns when using Audiences.

On the other hand, what does he do? Observation I mean, why does it matter?

Using the observation setting means that the reach of your campaigns will not be affected. If you add audiences to your PPC campaigns, Google simply collects data on how that audience group is performing.

You’ll be able to compare audience performance on key KPIs against users who aren’t ranked in that audience.

When to use each setting

Targeting and monitoring settings are very different. Each one can provide benefits to your PPC campaigns if you use them in the right way.

When to use the targeting setting

when you want Restrict your targeting Only for the audience you choose.

Examples of targeting strategies only

  • Create a remarketing campaign. The use of targeting is essential in this example.
  • When you want to message specific audiences differently.
  • Create a search campaign using broad match keywords. This is common in niche B2B companies where they struggle to find volume. By using the broad + target audience matching strategy, you can get more qualified visitors.
  • Create any type of video campaign (you don’t want the whole world to see your content, right?).

When to use the monitoring setting

  • when you want to monitor specific audience performancewithout narrowing the campaign’s reach.

Examples of monitoring strategies only

  • Add a remarketing list to a search campaign and increase your bid for that audience
  • When you want to monitor new audiences in the market for a search campaign. Once you have enough performance data, you can then start changing your strategies for pulling in other tools.

As a general rule, I usually don’t recommend Observation In any Display Network or YouTube campaign. This is because these campaigns are more focused on awareness, and targeting the right audience is key.

There are many other use cases for using one setup or another, but this gives a good starting point if you’re just starting out.

Where do you find this setting

In the Google Ads interface, go to masses tab on the left side.

Note – You’ll want to decide whether your PPC campaigns will have a campaign-level audience target, or an ad group-level audience target.

Screenshot from Google Ads, December 2021

From there, click Edit audience segments to the right:

How to search for audience segments in Google AdsScreenshot from Google Ads, December 2021

At the top, this is where you will have the option to choose between targeting And the Observation:

Choosing between targeting and observingScreenshot from Google Ads, December 2021

In this example, I chose to use targeting (Not recommended Observation setting) due to low total search volume for keywords.

We’ve used pure broad match targeting and layered on a qualified audience for this B2B company.

Where to find Microsoft Ads

Let’s not forget Microsoft (Bing) ads. Microsoft has the same capacity of features as Google.

In the Microsoft Ads interface, go to File masses tab on the left side. (similar to Google).

From there, click Create association.

Microsoft ad audience filterScreenshot from Microsoft Ads, Dec 2021

Once you are in, you will scroll down to see the options. Microsoft uses a different language than Google with these features, but it accomplishes the same thing.

Microsoft options are bid only (Compared to Observation at Google) and Aim and bid (Compared to targeting in Google).

Target and bid setting in Bing AdsScreenshot from Microsoft Ads, Dec 2021

Once you select the desired target, there is an option to increase or decrease bids on your chosen audience(s).

Performance examples

Now that you are familiar with these targeting settings, let’s look at real-life examples of how these settings can be implemented.

In the image below, the client first wanted to understand how certain industries and company sizes perform compared to the general user.

In this case, the masses are set at observation only Let’s start with. This is usually recommended if you’re testing a new audience, rather than going all-in with no data.

The performance after one month was clear: users in selected audience groups were more qualified than the general user.

The CTR was 230x higher than users not in these audiences!

Campaign performance after one monthScreenshot from Google Ads, December 2021

It is important to note that the general reach was much lower than the general user, which is to be expected.

How did this change this search campaign strategy?

The client ended up expanding their match types to Broad, and setting audiences Targeting only. This resulted in:

  • Higher CTR.
  • Lower CPC.
  • Higher conversion rate.
  • Low cost of acquisition.

The mistake of expanding the audience that you don’t want to make

If you’re a seasoned PPC marketer, it probably comes as no surprise that Google sometimes hides automatic features that it doesn’t want you to find.

One feature in particular that’s hard to locate is something called Expanding the audience.

This feature is available for Google Display campaigns (not the Search Network).

Take this remarketing campaign, for example. Before we can find this “hidden” Google feature, you’ll notice a stark difference in performance.

  • the Remarketing audienceIt represents only 45,000 impressions
  • the Show automatic targeting Representing over 1.8 million impressions!
  • While there were some conversions, they came in at a level big cost.
Total view audience expansionScreenshot from Google Ads, December 2021

In case if Remarketing, this setting should always be turned off. Why?

The whole point of Remarketing Is to re-engage the users who know you! If you have specific messages towards this group of people, you don’t want anyone else to see them.

If you are creating an awareness campaign, you may find this setting more useful. However, always be careful.

Where to find and stop setting

In a display campaign, you will need to be in the specified ad group. So, if you have multiple ad groups, you will need to turn this off for each group.

Go to Ad group > Settings > Edit ad group targeting.

Navigate to settings in Google AdsScreenshot from Google Ads, December 2021

From there, you will see this box with an option to move the lever. By default, it is moved to the first point on the right.

Google Ads targeting settingsScreenshot from Google Ads, December 2021


As with any PPC campaign, there is no ‘one size fits all’ strategy, particularly when it comes to audience targeting.

By understanding these key differences in targeting and monitoring, you can improve your PPC strategy into a model that is more relevant to your goals.

More resources:

  • Microsoft Ads announces plans to move to the new feedback system
  • Is your use of Google Ads an organic search ranking factor?
  • Top 10 Pay Per Click Trends To Know In 2022

Featured image: Visual Generation / Shutterstock

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