How to Set Up Google Ads Audience Targeting

Setting up the right audience targeting is the difference between showing your ad to a random person scrolling their phone at a bus stop in Fortitude Valley and showing it to someone actively looking for exactly what you sell. In the world of Google Ads, your keywords tell Google what people are looking for, but your audiences tell Google who those people actually are.

Without proper audience targeting, you’re essentially shouting into a megaphone in the middle of Queen Street Mall and hoping the right person walks by. With it, you’re having a direct conversation with your ideal customer. Let’s get stuck into how to set this up properly so you stop wasting money on clicks that will never convert.

Prerequisites: What You’ll Need Before We Start

Before we dive into the dashboard, make sure you have the following ready:

• An active Google Ads account: If you haven’t set one up yet, you'll need your ABN and billing details handy.
• Google Tag Manager or the Google Tag installed: To use the really powerful stuff (like Remarketing), Google needs to be able to see who is visiting your website.
• A rough idea of your customer persona: Think about who your best customers are. Are they homeowners in the Brisbane suburbs? Small business owners? People looking for luxury travel? Knowing this makes the process much smoother.

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Step 1: Navigating to the Audience Manager

First things first, we need to find where Google keeps all the "people" data. This is where most beginners get lost because Google loves to hide things in sub-menus.

• Log in to your Google Ads account.
• Look at the top menu bar (or the left-hand sidebar, depending on which version of the interface Google is testing on you today). Click on Tools and Settings (the wrench icon).
• Under the Shared Library column, click on Audience Manager.

Step 2: Setting Up Your Data Sources (The "Must-Do" Step)

Before you can target people who have visited your site, Google needs permission to track them. This is the bedrock of Australian privacy compliance and effective remarketing.

• In the Audience Manager, click on Your Data Sources in the left menu.
• Find the Google Tag card and click Set Up Tag.
• Choose "Only collect general website visit data" (this is usually enough for most local Brisbane businesses like plumbers or accountants).
• Follow the prompts to install the code.

Step 3: Creating Your First Remarketing List

Remarketing is targeting people who have already interacted with you. It’s usually your highest-converting audience because they already know who you are.

• Go back to Audience segments and click the blue plus (+) button.
• Select Website visitors.
• Segment Name: Give it a clear name like "All Visitors - Last 30 Days".
• Visitors of a page: You can leave this as "Match any page" to target everyone, or specify a page (e.g., people who visited your /pricing page).
• Membership duration: Set this to 30 days to start.

Step 4: Building Custom Intent Segments

This is where Google Ads gets really clever. You can target people based on what they are searching for right now, even if they haven't visited your site yet.

• Click the Custom segments tab at the top.
• Click the blue plus (+) button.
• Select People who searched for any of these terms on Google.
• Enter keywords your customers use. For example, if you're a Brisbane-based gym, enter "best gym near me," "HIIT classes Brisbane," and "crossfit northside."
• Google will give you an estimate of the weekly reach on the right side. Don't worry if it looks small; quality over quantity is the goal here.

Step 5: Exploring In-Market and Affinity Audiences

Google already has "buckets" of people they've categorised based on their long-term interests and recent buying intent.

• In-Market Audiences: People who are actively researching a product (e.g., "In-market for Real Estate"). These people are ready to buy.
• Affinity Audiences: People with a long-term interest (e.g., "Golf Enthusiasts"). Great for brand awareness.

To find these, you'll usually apply them at the Campaign or Ad Group level.

• Go to your specific Campaign.
• Click Audiences in the left sidebar.
• Click Add Segments.
• Select Browse to see the In-market and Affinity categories.

Step 6: Using 'Observation' vs 'Targeting' (The Most Important Distinction)

This is where 90% of people make a mistake that kills their campaign. When you add an audience to a search campaign, you have two choices:

• Targeting: This tells Google: "ONLY show my ads to people in this audience." (Use this for Remarketing campaigns).
• Observation (Recommended): This tells Google: "Show my ads to everyone, but tell me how this specific audience performs."

Step 7: Demographic Targeting for the Australian Market

Don't forget the basics. You can filter by Age, Gender, and Household Income.

• In your Campaign, click Audiences > Demographics.
• Household Income: Be careful here. In Australia, this data isn't as precise as it is in the US. I usually suggest leaving all income brackets selected unless you are selling a strictly luxury product (like prestige cars in Ascot or Hamilton).
• Age: If you're a mortgage broker, you can probably untick '18-24' to save some budget, as they are rarely in the market for a home loan.

Step 8: Creating Combined Segments

If you want to get really fancy, you can use "And" logic.

• In Audience Manager, go to Combined segments.
• Click the blue plus (+).
• Add your first segment, then click Narrow your segment (AND) to add the second layer.

This is brilliant for niche Brisbane businesses. For example, a high-end pet groomer might target "Dog Lovers" who also fall into the "Top 10% Household Income" bracket.

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Common Mistakes to Avoid

• Being too specific: If you layer too many audiences (e.g., Men, aged 34, who like golf, live in Paddington, AND visited your site), your audience size becomes zero. Google won't show your ads because the group is too small to protect privacy.
• Forgetting to exclude: If you’re running a lead-gen campaign, exclude the "All Converters" list so you don't keep paying for ads to people who have already signed up!
• Ignoring the 'Unknown' category: In demographics, 'Unknown' is often your biggest group. Don't exclude it, or you'll lose about 50% of your potential traffic.

Troubleshooting

Next Steps

Now that you've set up your audiences, your next move is to monitor their performance. Check back in two weeks to see which groups are clicking and which are converting. You can then apply "Bid Adjustments" (e.g., +20% for high performers) to make your budget work harder.

Setting this up is a bit of a grind, but it’s the secret sauce that makes Google Ads profitable for small businesses. If you've hit a wall or just want a professional to audit your setup, we're here to help.

Check out our other guides on Google Ads conversion tracking or reach out to the team at Local Marketing Group to get your campaign performing at its peak.