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PPC Audience Strategy: Targeting vs. Observation



PPC Audience Strategy: Targeting vs. Observation

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

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

It seems that just when you get used to a setting or feature in these platforms, the interface changes – or worse – options change.

This guide walks through the key differences in Targeting and Observation settings, and where to find them in the Google Ads and Microsoft Ads interfaces.

Targeting vs. Observation: What’s The Difference?

What exactly is the targeting setting and why does it matter?

Using the targeting-only setting means that of the audience you specified, you will only show your ads to those users.

This setting is available for all Search, Display, and YouTube campaigns when utilizing audiences.

On the other hand, what does observation mean and why does it matter?


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

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 PPC campaigns if you use them the right way.

When To Use Targeting Setting

When you want to restrict your targeting to only the audience of your choice.

Examples of Targeting-only Strategies

  • Creating a Remarketing campaign. Using targeting is essential in this example.
  • When you want to message specific audiences differently.
  • Creating a Search campaign with Broad-match keywords. This is common in B2B niche companies where they struggle to find volume. By utilizing a Broad match + targeted audience strategy, you can end up with more qualified visitors.
  • Creating any type of video campaign (you don’t want the whole world seeing your content, do you?).

When To Use Observation Setting

  • 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
  • When you want to monitor new In-Market audiences for a Search campaign. Once you get enough data on performance, then you can start shifting your strategies to pull other levers.

As a general rule of thumb, I typically do not recommend Observation on any Display or YouTube campaign. This is because those campaigns are more awareness-focused, and targeting a proper audience is key.

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

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.

Screenshot from Google Ads, December 2021

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

How To Find Audience Segments in Google AdsScreenshot from Google Ads, December 2021

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

Choosing Between Targeting and ObservationScreenshot from Google Ads, December 2021

In this example, I chose to use Targeting (not the recommended Observation setting) due to the overall low search volume of keywords.

We utilized pure Broad Match targeting and layered on a qualified audience for this B2B company.


Where To Find In Microsoft Ads

Let’s not forget about Microsoft (Bing) ads. Microsoft has the same feature capability as Google.

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

From there, click Create Association.

microsoft ads audience filterScreenshot from Microsoft Ads, December 2021

Once you’re in, you will scroll down to see the options. Microsoft does use different language than Google with these features, but they accomplish the same thing.

Microsoft options are Bid Only (compared to Observation in Google) and Target and Bid (compared to Targeting in Google).

Target and Bid setting in Bing AdsScreenshot from Microsoft Ads, December 2021

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

Performance Examples

Now that you’re familiar with these targeting settings, let’s take a look at real-life examples of how these were implemented.

In the picture below, a client wanted to first understand how certain industries and company sizes performed compared to the general user.

In this case, the audiences were set at Observation Only to begin with. This is typically recommended if you’re testing a new audience, instead of going all-in without data.

The performance after one month was clear: the users in these chosen audience pools were much more qualified than the general user.


The click-through rate was 230x higher than users not in those audiences!

campaign performance after 1 monthScreenshot from Google Ads, December 2021

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

How did this change the strategy of this Search campaign?

The client ended up broadening out their match types to Broad, and set the audiences to Targeting Only. This resulted in:

  • Higher CTR.
  • Lower CPC.
  • Higher Conversion Rate.
  • Lower CPA.

The Audience Expansion Mistake You Don’t Want To Make

If you’re a seasoned PPC marketer, it probably comes as no surprise that Google will sometimes hide automated features they don’t want you to find.

One feature in particular that can be difficult to locate is something called Audience Expansion.

This feature is located in Google Display campaigns (not Search).

Take this Remarketing campaign, for example. Before we were able to find this ‘hidden’ feature from Google, you’ll notice a stark difference in performance.

  • The Remarketing audience only accounted for 45,000 impressions
  • The Display automatic targeting accounted for over 1.8 million impressions!
  • While there were some conversions, they came at a significant cost.
total display audience expansionScreenshot from Google Ads, December 2021

In the case of Remarketing, this setting should almost always be turned off. Why?

The whole point of Remarketing is to re-engage users who are aware of you! If you’ve got specific messaging towards this group of people, you don’t want anyone else to see it.

If you’re building an awareness campaign, you may find this setting more useful. However, always be cautious.


Where To Find And Turn Off The Setting

In a Display campaign, you’ll need to be in the specific ad group. So, if you have multiple ad groups, you’ll need to turn this off for each one.

Navigate to Ad Group > Settings > Edit Ad Group Targeting.

Navigating settings in Google AdsScreenshot from Google Ads, December 2021

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

Targeting settings in Google AdsScreenshot from Google Ads, December 2021


As with any PPC campaign, there is no “one size fits all” strategy, especially when it comes to audience targeting.

By understanding these key differences of Targeting and Observation, you can improve your PPC strategy to a model that makes the most sense for your goals.

Featured Image: Visual Generation/Shutterstock

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Which Is Better For You?



Which Is Better For You?

Content marketers are using video content more than ever.

In 2022, 86% of businesses use video as a marketing tool.

Aside from the rise of TikTok, especially during the pandemic, more marketers are creating videos, and 46% of marketers said it was because videos had become easier to develop in-house.

As a content marketer, should you jump on the bandwagon?

And what about the more “traditional” YouTube?

Worldwide, YouTube is part of the Top 3 social media networks. TikTok isn’t just yet, though it’s steadily climbing the ranks at No. 5.

Just because TikTok is the newest kid on the block doesn’t mean you have to allocate all your video budgets to it.


Choosing between the two requires careful thought and consideration. You must factor in content type, target audience, engagement rates, and influencer marketing spend.

So, which of these two viral video platforms makes more sense for your business?

Let’s dive in.

What Is TikTok?

After Chinese tech company ByteDance acquired in 2017, its technology was ported. Thus, TikTok was born.

TikTok (called Douyin locally) is a user-friendly social media platform that allows users to create short-form videos.

With a free video editor in-app, anyone can add filters, stickers, and text-to-speech for a 15-second video.

TikTok has over a billion monthly users, making it the most downloaded app worldwide in 2021.

What Is YouTube?

With over 2.1 billion monthly active users, the video-sharing platform has been around much longer. Launched in 2005, YouTube has been the mainstay for sharing video content.


Three former PayPal employees founded YouTube as a way for people to have fun sharing their home videos. (Remember the first few viral YouTube videos?)

Compared to TikTok, YouTube videos are a lot longer.

Factors To Consider When Choosing Between TikTok And YouTube

TikTok YouTube
Audience (U.S.) 50% between ages 18 and 24, 17.7% between ages 12 and 17 95% between ages 18 and 29
Average Content Length 15 to 60 seconds 11.7 minutes
Average Time Spent Per Day 45.8 minutes a day 45.6 minutes a day
Traffic (Organic) 318.2 million 646 billion
Traffic (Paid) 643,600 65.1 million
Successful Niches
  • Dance
  • Comedy
  • Smaller/specialized creators
  • Product must-haves
  • Breakdowns of news stories
  • Makeup and fashion hacks with trendy sound clips
  • Storytime (first person POV)
  • Evergreen content
  • Lifehack and DIY videos
  • How-tos
  • Gaming, people, and blogs
  • Music and entertainment
  • Sporting Events
Cost For Business Accounts $o – free account $o – free account

Audience For TikTok vs. YouTube

TikTok Has A Younger U.S. Audience

If you’re marketing to teens, a.k.a., Gen Z (and by extension, Generation Alpha who are becoming teens next year), TikTok is a strong bet.

As of April 2022:

Almost half of TikTok users in the United States were between 18 and 34 years, making up the largest demographic group for the platform.

TikTok users aged between 12 and 17 made up approximately 17.7% of the popular social video app user base in the United States, while 2.5% of TikTok users in the country were 11 years old or younger.”

This means that TikTok is especially popular with Gen Z while more and more adults are steadily becoming app users, too.

Note that younger children ages 12 and above can access TikTok (the app requires a minimum of 12 years of age to get a profile).

Gen Z And Millennials Are More Likely To Trust YouTubers

If you’re trying to reach Millennials (while keeping older Gen Z in mind) and be seen as more authoritative, YouTube could be a safer bet.

According to Pew Research:


“In 2021, 95% of U.S. adults between 18 and 29 years of age said they use YouTube (the age demographic with the highest percentage) while only 49% of U.S. adults who are 65+ years reported using it.”

According to the YouTube Culture And Trends Report 2022, 83% of Gen Z watch soothing content on YouTube to help them relax.

Lastly, in a survey by Ypulse, YouTubers were the most trusted public figures (31%) among those surveyed, beating TikTokers by 12%.

TikTok vs. YouTube: Content Format And Length

Keep It Short And Sweet On TikTok

TikTok has a maximum length of three minutes. TikTok recommends an optimal 21 to 34 seconds to keep viewers interested, but average videos last 15 – 60 seconds.

While it leaves little room for all-out explainer videos, you can still create quality content on the go and turn it into a non-chronological series.

TikTok favors short-form videos with an aspect ratio of 9:16; it is vertically optimized for mobile devices.

The platform also has TikTok LIVE, a feature for creators to connect in real-time with their audience (think Q&As or concert experiences).

Leave The Longer Videos To YouTube

Verified accounts on YouTube can run up to two hours of video, while unverified accounts can only upload 15 minutes. The average length for videos is 11.7 minutes.

While YouTube videos are popular on mobile devices (49.3% are watching on mobile YouTube), the number is expected to decrease as YouTube continues to be available on desktop and TV devices.


Keep a 16:9 aspect ratio in mind since YouTube apps are becoming more popular with smart TVs, gaming consoles, and other gadgets.

YouTube launched its livestream feature for creators back in 2011.

The platform is famous for its gaming livestreams, the Superbowl, the Olympics, and more.

Moreover, YouTubers can curate content playlists, allowing viewers to enjoy music streaming and related content for hours with an autoplay option.

Note: The average time per day for both channels is around 45 minutes, with TikTok winning by a hair at 45.8 minutes compared to YouTube’s 45.6 minutes.

Comparing TikTok vs. YouTube Algorithm

There is content that works well on both platforms (consider product reviews and reaction videos).

Nevertheless, here are the types of content for which each channel is better known.

To dig deeper into TikTok’s powerful search algorithm or how YouTube’s search results recently changed, we recommend further reading up on them in the links provided.


TikTok: Niches That Succeed

Screenshot from TikTok, September 2022

Bite-sized content has never been more digestible, with creators using TikTok to spread straightforward content in memes, educational content, lip sync, and dance videos.

These often include specialized content series, like Random Amazon Finds That Just Slap, Things I Just Found Out In My 30s, or professionals connected to a particular hashtag with content usually dedicated to one specialty. (Note: That could be an opportunity for your business’s industry or niche.)

Small and big brands can work with influencers to create simple, engaging, potentially viral content. See how Clinique’s Black Honey Lipstick sold out because of TikTok videos spreading awareness.

TikTok Creator content tends to be relatable and authentic; you can use the TikTok Insights tool to see what works for each generation in what industry.

Niches That Work On YouTube

Popular content on YouTube includes how-to videos, product reviews, music videos, comedy skits, and much more.

Your brand can benefit from collaborating with YouTubers (the most trusted figures, according to the survey above). For example, NordVPN frequently has sponsorship arrangements with tech gadget reviewers, like Techmoan.

YouTube can be better for products that aren’t as easy to show off in short formats. Additionally, YouTube tutorials tend to have a more serious tone.

TikTok Ad Formats

For TikTok ad formats, you have the following options (see TikTok Ads For Beginners: A Complete Guide & Steps To Success to learn how to use them).

  • TopView: An attention-grabbing, distraction-free, 60-second video format.
  • In-Feed Ads: A native-inspired ad type that will integrate seamlessly into a viewer’s “For You” page.
  • Branded Hashtag Challenge: A UGC (user-generated content) using your brand’s hashtag campaign.
  • Branded Effects: Branded stickers, filters, or special effects.

YouTube Ad Formats

For videos that have ad monetization features, these are the following video ad formats available for YouTube business accounts.

Read The Complete Beginner’s Guide To YouTube Video Advertising for a comprehensive guide on how to use them.

  • Skippable video ads: A video ad with an option for viewers to skip after five seconds.
  • Non-skippable video ads: These ads don’t allow viewers to skip this typically 15-20 second video.
  • Bumper ads: Up to six seconds long, these ads need to be watched before a video is viewed.
  • Overlay ads: Only seen on desktop, these ads take up the lower 20% screen of a video.

YouTube videos can be monetized and can earn shared ad revenue.

Setting up business accounts is free on both platforms. Keep in mind that TikTok has a $50 minimum for an ad spend, while YouTube Ads offers $100 in free credits when you spend $50 on video ads.


Should you favor one over the other?

On the surface, has 318.2 million organic traffic, and has 646 billion.

For paid, TikTok traffic is 643,600, while YouTube reaches 65.1 million.

YouTube and TikTok are here to stay, and while YouTube’s traffic seems bigger, TikTok’s fast rise to the top is one to look out for.

Typically, both are ideal for marketers who invest in video marketing; 87% of marketers say video has helped them increase their traffic, and 82% on dwell time.

The best platform depends on your brand and the type of content you have the resources for, the customer purchase cycle, your social media goals, and your budget.

When used wisely, whichever of the two you choose will help benefit your business in the long run.


More Resources:

Featured Image: Daxiao Productions/Shutterstock

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