Audience Targeting

Custom Segments vs Optimized Targeting: Who You Pick or Who Google Finds

In short: Both shape who sees a Display, Video, or Demand Gen ad, but they sit at different points in the targeting stack. Custom segments are an audience you actively define and apply. Optimized targeting is a setting that takes whatever audiences you've selected as a seed, then lets Google bid on additional people outside those lists who look likely to convert based on live conversion data. Custom segments are the input; optimized targeting is the expansion layer sitting on top of it. Build the custom segment first to define your core audience, then decide whether to let optimized targeting expand beyond it.

By the AdFlint research team · Fact-checked against current Google and Meta platform behavior · Last reviewed July 2026

Custom Segments

Lets you define your own Google audience from keywords people search, websites they browse, or apps they use, instead of picking a prebuilt segment.

You supply search terms, URLs, or app IDs, and Google assembles an audience of people whose behavior matches those signals across Display, Video, and Demand Gen. It is the closest thing to keyword targeting outside Search, and it replaced the older custom affinity and custom intent segments. Most accounts overload one segment with unrelated inputs, which blurs the signal Google builds against.

Full definition

Optimized Targeting

Lets Google find additional converting users beyond the audiences you selected in a Display, Demand Gen, or Video campaign, treating your segments as a starting signal.

Enabled at the ad group level, it uses your chosen audiences and live conversion data as seeds, then bids on people outside those lists who look likely to convert. It is the intended successor to similar segments. It only behaves well when conversion tracking is reliable, and advertisers routinely confuse it with audience expansion, which widens reach without optimizing toward a conversion goal.

Full definition

Side by side.

The differences that actually change what happens in your account.

	Custom Segments	Optimized Targeting
What you're managing	An audience you build and apply directly.	An ad-group-level setting that expands beyond the audiences you've applied.
Where it lives	The audience targeting or observation section.	A toggle at the ad group level, separate from any single audience.
What it needs to work	Your keywords, URLs, or app inputs.	Reliable, live conversion tracking so Google knows who's converting and expands toward more like them.
Relationship to other audiences	Can be one of several targeting layers.	Treats your selected audiences as a seed, then reaches beyond them.
Common confusion	Mistaken for a prebuilt in-market or affinity segment.	Mistaken for audience expansion, which broadens reach without optimizing toward a conversion goal.
What breaks it	Overloading the segment with unrelated inputs blurs the signal.	Unreliable or absent conversion data, which leaves it nothing to optimize toward.
Successor role	Not a successor to anything, an original tool.	Intended successor to the expansion job similar segments used to do.

What actually separates them.

Custom segments define who you want to reach directly, while optimized targeting doesn't define an audience at all, it decides whether to serve beyond the audiences you've already selected.

Optimized targeting needs your selected audiences, which can include a custom segment, as a starting seed, since it has nothing to expand from without one.

A custom segment's quality depends on how well your keywords, URLs, or apps describe the behavior you want, while optimized targeting's quality depends entirely on whether conversion tracking is firing reliably, since it expands toward whoever is converting.

You can turn optimized targeting on or off at the ad group level without touching the custom segment underneath it, since the two are independently editable.

Optimized targeting is commonly confused with audience expansion, which widens reach without regard to conversions, while optimized targeting only expands toward people who look likely to convert based on live data.

Which one should you use?

Use Custom Segments when

You want to define the audience yourself using specific keywords, URLs, or apps.
You need a stable, explicit targeting layer you can reason about and reuse across campaigns.
You're building the seed audience that optimized targeting, or any expansion, will start from.
Conversion tracking isn't reliable enough yet to trust an automated expansion layer.

Use Optimized Targeting when

You have solid, reliable conversion tracking and want Google to find more converters beyond your selected audiences.
You've already set a custom segment or other audience and want to see if reach beyond it still converts well.
You're comfortable trading some control over exactly who's targeted for a potentially lower cost per conversion.
You're replacing an old similar-segments-based workflow with the tool Google intends as its successor.

Common questions.

Does optimized targeting replace my audience targeting or add to it?

It adds to it. Your selected audiences, which can include a custom segment, remain in place as the seed, and optimized targeting expands delivery beyond them toward people who look likely to convert based on live conversion data.

Is optimized targeting the same as audience expansion?

No, and this is a common mix-up. Audience expansion broadens reach without weighing conversions, while optimized targeting specifically looks for people likely to convert based on your actual conversion data, so it only performs as well as your conversion tracking does.

Why is optimized targeting spending outside my custom segment and hurting relevance?

If it's expanding into low-quality traffic, the most common cause is thin or unreliable conversion data giving it a poor signal to expand toward. Check that your conversion actions are tracking accurately before assuming the setting itself is the problem.

Can I turn optimized targeting off and just use my custom segment alone?

Yes, it's a toggle at the ad group level independent of the audience itself. You can disable it and run strictly within your selected custom segment or other chosen audiences whenever you want tighter control.

Or stop choosing between them.

AdFlint picks the setting, writes the ads, and keeps optimizing inside the Google and Meta accounts you already own.

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