In Google Ads, keywords tell you what a search is; audience layers tell you who’s searching. In-market segments, affinity audiences, and custom segments are different types of that identity layer.
The three layers don’t all serve the same purpose. In-market targets short-term purchase intent, affinity targets long-term interest, and custom segments target a behavior pattern that the advertiser defines themselves.
The affinity segment documentation states that these audiences are predefined based on users’ interests and lifestyle, and that they can be used in Demand Gen, Display, Search, Video, Standard Shopping, and Hotel campaigns. The same documentation also states explicitly that sensitive categories such as health or sexual orientation are never used for personalization. The custom segments documentation states that advertisers can define a custom segment by entering their own keywords, URLs, or apps, but that this segment can’t be applied directly to Performance Max — instead, “audience signals” must be used.
What Are In-Market Segments?
In-market segments target users who are actively researching or comparing a product or service. This audience carries an intent relatively close to purchase.
It holds a specific place in the priority order
In-market audiences rank fourth in Google’s audience attribution hierarchy. This is a technical detail that affects which signal takes priority when a user matches more than one audience criterion.
What Are Affinity Audiences?
Affinity audiences are predefined groups based on a user’s long-term interests and lifestyle. Broad categories like “sports enthusiasts” are an example.
It targets interest, not intent
Unlike in-market, affinity doesn’t assume the user is currently researching a purchase. That’s why it can be a better fit for awareness-focused campaigns like Display and YouTube.
What Are Custom Segments?
Custom segments are a specific audience the advertiser defines by entering their own keywords, URLs, or apps. For example, entering competitor site URLs can be used to try to reach users interested in those sites, or entering keywords that carry a specific search intent — like “enterprise software comparison” — can target users with that intent.
They work differently in Performance Max
Custom segments can be used directly in Display, Gmail, Demand Gen, and Video campaigns. In Performance Max, this segment can’t be applied directly — instead, it’s added as audience signals.
Observation or Targeting?
When adding an audience layer, you choose between two modes, and that choice determines the campaign’s flexibility.
Observation mode tracks without restricting
In observation mode, the ad continues to show to users outside the selected audience as well. Only performance data is tracked separately, and bids can be adjusted as needed. This mode is recommended for Search campaigns.
Targeting mode restricts impressions
In targeting mode, the ad shows only to the selected audience. This can be a better fit for Video and Display campaigns, since these campaign types may call for focusing on a specific audience rather than showing randomly to a broad one.
Observation is recommended to start
When adding a new audience signal, collecting data first with observation mode and then moving to targeting based on performance is the more measured approach.
Pre-Launch Checklist
Before adding an audience layer:
- Does the campaign type support the selected audience type?
- Was the choice between observation and targeting mode made based on the campaign’s objective?
- If custom segments will be used in Performance Max, have they been converted into an audience signal?
- Has it been confirmed that targeting isn’t based on sensitive categories?
Common Mistake
The most common mistake is jumping straight into targeting mode and narrowing impressions without ever observing the audience data. A targeting mode set up with insufficient data can unnecessarily shrink a campaign’s reach.
Summary
In-market, affinity, and custom segments are three distinct audience layers that target different levels of intent. Observation mode tracks data without restricting it, while targeting mode limits impressions to a specific audience. Choosing the right layer and mode should be based on the campaign type and objective.