How to Use Targeting Settings in Google AdWords

Jill Goldstein - June 27, 2018

The Google Display Network (GDN) has a growing list of ways to reach potential customers. To do so, we can target audiences (in-market audiences, affinity audiences, demographics, etc.) or content (topics, keywords, etc.). To take that a step further, we can layer different types of targeting to truly pinpoint a subset of users or we can simply observe how different types of people interact with our ads. This is where the very important distinction between targeting settings come into play.

Targeting (Formally Target and Bid)

When choosing the “Targeting” setting, you are telling AdWords to restrict your ads to only show to the users you are targeting using your various targeting criteria. Alongside targeting, the option to modify bids is also available. Keep in mind, that you can run ads on the Google Display Network without any targeting. Your ads will simply show based on account-level settings and exclusions. However, as a best practice, it’s always recommended that you include targeting when using the GDN.


Susie runs a website that sells gardening supplies called She knows that females generally purchase her products and she wants to her ads to show to women only when they are reading content online about gardening. By excluding “males” and “unknown” under demographics and selecting “Gardening & Landscaping” under Topics using the “Targeting” setting, Susie will narrow the reach to only women as they browse content around gardening and landscaping.

To sum it up: Targeting = Restricted reach

Observations (Formally Bid Only)

Alternatively, when choosing the “Observation” setting, you’re not restricting where ads can show across the GDN, rather you are monitoring how targeting criteria interacts/performs with your ads. Alongside the monitoring of performance, the option to modify bids is also available.

As a best practice, it’s always recommended to utilize remarketing lists for search ads (RLSA) in all search campaigns. By simply adding an audience (for example, All Website Visitors) to a search campaign using the Observations setting at a 0% modifier, we can monitor how past website visitors interact with our ads compared to new users, and in time use that data to modify bids (either positive or negative).


Susie wants to know how many of her customers are also in the market for home & garden services. By adding the in-market audience of Home & Garden Services using the “Observations” setting, Susie can monitor how these users interact with her ads and determine whether these users are more or less likely to purchase compared to users simply reading about gardening. From there, she can adjust her bids appropriately.

To sum it up: Observations = Not restricted reach. Use to monitor performance.

If you have any questions on targeting settings and how to use them, please contact us!

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