Targeting vs Observation

There are two key components to setting any audience strategy: Targeting and Observation.

Targeting vs. Observation: What’s The Difference?

Using the targeting-only setting means that only the audience you specified will get to see your ads. This setting is available for all Search, Display, and YouTube campaigns that utilize audiences.

Using the observation setting on the other hand, means that the reach of your campaigns is not affected. When you add audiences to your campaigns, Google simply gathers data on how that audience group performs and you will be able to compare audience performance on key KPIs against users who are not categorized into that audience.

When To Use Each Setting

The targeting and observation settings are vastly different. Each one can provide benefits to your campaigns when used in the right way.

When To Use Targeting 

You will choose targeting when you want to restrict your targeting to just the audience of choice.

Examples of Targeting-only Strategies

• Creating a Remarketing campaign. Using targeting is essential in this example.

• When you want to message specific audiences in different ways.

• Search campaign with Broad-match keywords.

• Creating any type of video campaign

When To Use Observation

Choose observation when you want to monitor the performance of a certain audience without narrowing campaign reach.

Examples Of Observation-only Strategies

• Adding a remarketing list to a Search campaign and increasing the bid on that audience.

• Monitoring new audiences for search campaigns. Once you get enough data on performance, then you can start actually targeting the audience.

Where To Find This Setting

In the Google Ads interface, navigate to the Audiences tab on the left-hand side.

Note – you’ll want to decide if your PPC campaigns will have a campaign-wide audience target, or ad group-wide audience target.

From there, click on Edit Audience Segments to the right:

At the top, this is where you’ll have the option to choose between Targeting and Observation:

Example of using observation before targeting.

In the screenshot below, a client wanted to understand how certain audiences performed compared to their existing audience segments.

In this case, the audiences were set at ‘Observation Only’ to begin with. This was recommended because they wanted to test a new audience, instead of going all-in without data.

The performance after one month was clear: the users in the chosen audience segments were much more qualified than the control group.

Look at that increased CTR!

How did this change the strategy of this Search campaign?

The client ended up broadening out their match type to broad, and set the tested audiences to Targeting. This resulted in:

• Higher CTR.

• Lower CPC.

• Higher Conversion Rate.

• Lower CPA.

An overall win in almost every category.