4 Ways to Pinpoint Targeting with Google Ads Custom Audiences (2026 NZ Guide)

Google Ads' targeting toolkit looks very different in 2026 than it did in 2021. Custom Audiences are still here — but the way they fit into modern campaigns has been reshaped by Performance Max, Demand Gen, and the privacy-first restrictions that arrived with the third-party cookie phase-out. For NZ advertisers, the audiences that worked five years ago no longer work the same way, and the ones that work best now did not exist in the original Google Ads UI.

This is the 2026 update of our most-read Google Ads targeting guide. We cover the four Custom Audience signals that still drive results, how they interact with the new campaign types, and the NZ-specific tactics that lift performance in a smaller market with less data volume.

Want help building Custom Audiences for your NZ Google Ads account? Talk to our SEM team — we run audience-led campaigns for NZ businesses on Search, YouTube, and Performance Max.

What Are Custom Audiences in Google Ads in 2026?

Custom Audiences let advertisers build audience segments based on user signals — keywords, browsing behaviour, app usage, and physical locations visited — instead of selecting from Google's preset audience categories. Custom Intent Audiences and Custom Affinity Audiences were merged into a single "Custom Audiences" tool back in 2020 and that unified structure remains in 2026, though the available signals and their use within campaign types have evolved significantly.

The four signal types you can combine to build a Custom Audience in 2026:

• Interest and behaviour (keywords representing intent)
• Types of websites browsed (URLs of sites your customers visit)
• Types of apps used or downloaded
• Categories of physical locations visited

Custom Audiences are now used across Display, YouTube, Demand Gen, Discovery, and as audience signals inside Performance Max — a substantial expansion from the Display + YouTube only scope they had in 2021.

Custom Audiences in 2026 vs 2021: What Changed

Aspect	2021	2026
Where they're used	Display + YouTube	Display, YouTube, Demand Gen, Discovery, PMax audience signals
Privacy context	3rd-party cookies still active	3rd-party cookies phased out, signals modelled by AI
Search retargeting on Google properties	Aggressive, granular	Still available but smoother, more probabilistic
Role in campaign	Hard targeting layer	Audience signal feeding Smart Bidding + AI
Scale required to work	Lower	Higher — small audiences modelled out

The biggest practical shift: Custom Audiences in 2026 are rarely a hard "show ads only to these people" filter. They are an input signal that Google's AI uses to find similar users at scale. This matters for NZ advertisers because the smaller market often produces audiences too small to use as hard filters anyway — using them as signals works around the volume problem.

1. Interest and Behaviour Targeting

The intent here is to use targeting that behaves almost like keywords — finding users who have either been researching specific topics or shown interest in a product, solution, or service while on Google.

For example, if you are targeting NZ users looking to buy a used car, type a seed term like "best used cars NZ". Google will surface phrase variants based on real search behaviour. Add more keywords and the Audience Insights chart on the right adjusts to show the audience composition.

Google properties vs Google Display Network

Custom Audiences behave differently depending on where the campaign runs. Two options at the top of the audience builder reflect this — and the choice still matters in 2026:

• People with these interests or purchase intentions: Targets users based on broader interest patterns. Works across Google Display Network and YouTube.
• People who searched for any of these terms on Google: Effectively search retargeting — your audience consists of users who actually typed those queries on Google. This option only works on Google-owned properties.

Google-owned properties in 2026 include:

• YouTube
• Google Discover
• Gmail
• Google AI Mode and AI Overview ad surfaces (newer in 2026)

The Google Display Network is not a Google-owned property — sites in GDN have opted into Google AdSense for monetisation. Search retargeting therefore does not apply to GDN placements; only the broader interest-based version does.

For NZ advertisers, the practical takeaway is to use the search-based option whenever you are running on YouTube, Discover, or Gmail. Search-intent audiences typically out-convert interest-based ones by 2 to 3x in NZ verticals like SaaS, finance, and high-consideration retail.

2. People Who Browse Types of Websites

Below the keyword section, the "Expand audience by also including" header introduces three additional signal types. The first is "People who browse types of websites".

You provide URLs of sites your target audience would visit. This is not a way to buy placements on those specific sites. It is a way to model the audience profile of those sites and find similar users elsewhere.

If you know where your customers spend time online, this signal is powerful. For best results in 2026:

• Avoid broad sites (news.com, reddit.com). The audience signal becomes too diffuse to be useful.
• Focus on industry-specific and closely related sites. For a NZ used car dealer, a list of NZ used car marketplaces (Trade Me Motors, AutoTrader.co.nz, Need-a-Car) outperforms targeting Ford or Toyota corporate sites.
• Include 5 to 10 URLs minimum. Smaller lists do not give Google's modelling enough signal.
• Audit lists every quarter — sites change audience composition and your competitive set evolves.

3. People Who Use Types of Apps

The next targeting option mirrors the website signal but uses apps instead of URLs. As you type app names, Google auto-suggests adjacent apps based on the themes you are building.

Think about the apps your potential customers would use — both permanently installed apps and more temporary or task-specific ones. App signals work especially well in 2026 for verticals where the buying journey is mobile-led: food delivery, ride-share, fintech, dating, fitness, mobile gaming.

NZ-specific note: New Zealand's app market is smaller than US/UK, so app-based audiences are usually thinner. Combine apps with website signals and keywords in the same Custom Audience to lift the audience size into a usable range.

4. People Who Visited Certain Places

The final signal type targets users based on categories of physical locations they have recently visited. These are categories rather than individual addresses (you cannot directly target "people who visited the Auckland CBD Mitre 10"), but the categories themselves can be highly relevant.

This signal has become more valuable in 2026 as Google has expanded its location category granularity, while privacy-protected modelling has filled in gaps that direct visit data used to fill. Useful patterns in NZ:

• Hardware retailers + home improvement stores for renovation services.
• Car dealerships + auto parts stores for automotive services.
• Gyms + sports retailers for fitness brands.
• Airports + hotels for travel-adjacent businesses.

Custom Audiences Inside Performance Max in 2026

The biggest 2026 use case for Custom Audiences is not Display or YouTube on their own — it is feeding audience signals into Performance Max campaigns.

Performance Max does not let you "target" Custom Audiences directly the way classic Display campaigns did. Instead, you give it audience signals — a Custom Audience, plus first-party customer lists, plus interest categories — and Google's AI uses these as a head-start for finding the right users across all surfaces (Search, Display, YouTube, Discover, Gmail, Maps, Shopping).

Best practice for NZ PMax campaigns:

• Build at least one Custom Audience per asset group, focused on tightly defined intent ("people who searched for [your category] in [NZ city]").
• Layer in your first-party customer match list as an additional signal.
• Do not rely on Google's "auto-generated" audience signals alone. They tend to over-broaden in smaller markets like NZ.
• Refresh signals every 90 days as campaigns mature and conversion data accumulates.

How to Set Up a Custom Audience in 2026

The "Custom Audiences" name suggests you would build them in Audience Manager. That is still not where the entry point lives. To build Custom Audiences in 2026:

1. Go into a Display, Video, Demand Gen, or Performance Max campaign (or asset group).
2. Open the Audiences tab or audience signals section.
3. Click the blue plus button.
4. Toward the bottom of the list, you will see Custom Audiences. If you have any built already, they appear at the top of the panel. To create a new one, choose "+ Custom Audience" at the bottom.
5. Name the audience descriptively (include the campaign type and date — "Used Car Buyers NZ — PMax — 2026Q2") so you can track and reuse them.
6. Add your signal types: keywords, URLs, apps, locations.
7. Save and apply to the campaign or asset group.

NZ-Specific Custom Audience Tips

• Combine signals. NZ market sizes mean single-signal audiences are often too thin. Stack 2 to 3 signal types in the same Custom Audience to lift effective volume.
• Use NZ-specific URLs. Targeting trademe.co.nz, neighbourly.co.nz, or stuff.co.nz lookalike audiences works better than targeting global sites with NZ traffic.
• Include NZ city names in keyword signals. "Plumber Auckland", "accountant Wellington" — Google's modelling uses these as geographic relevance signals even on national campaigns.
• Layer with first-party data. Customer Match lists from your CRM, sliced by purchase recency or value, are the highest-quality audience signal available in 2026 — and Custom Audiences amplify their reach when used together.
• Test against in-market and affinity. Custom Audiences are not always the winner. Run controlled tests against Google's pre-built in-market and affinity audiences in your first 30 days to identify the best signal for your offer.

Common 2026 Mistakes With Custom Audiences

• Treating them as hard targeting. In Performance Max and most modern campaigns, Custom Audiences are signals — Google's AI may show your ads to similar users outside your defined audience.
• Building one massive Custom Audience. Multiple smaller, intent-specific audiences usually outperform one giant one because they let Smart Bidding optimise each segment differently.
• Forgetting to refresh. Audiences degrade over 6 to 12 months. Without a quarterly refresh cadence, performance drifts.
• Ignoring exclusions. Custom Audiences for inclusion are useful; equally important is excluding low-converting segments (existing customers, low-value past visitors) from prospecting campaigns.

Frequently Asked Questions

Are Custom Audiences still relevant in 2026 with Performance Max running on autopilot?

Yes — and arguably more important. Performance Max relies on audience signals to bootstrap performance, especially in smaller markets like NZ. Without Custom Audience signals, PMax often spends inefficiently on broad audiences for the first 30 to 60 days. Well-constructed Custom Audience signals shorten that learning phase substantially.

How big does a Custom Audience need to be to work in NZ?

In 2026, Google requires no specific minimum size for Custom Audiences as signals (though some hard-targeting use cases need 1,000+ users). For practical performance in NZ, aim for 50,000+ modelled users — combine keyword signals with website and app signals to reach this scale in smaller niches.

Do Custom Audiences still work on Display Network without third-party cookies?

Yes. Google's Privacy Sandbox APIs (Topics, Protected Audience) and AI-based audience modelling have replaced most cookie-dependent functionality. Custom Audiences continue to work on GDN, though attribution and audience size reporting are now modelled rather than precise.

What is the difference between Custom Audiences and Customer Match?

Customer Match uses your first-party data — emails, phone numbers, addresses from your CRM — to target your existing customers and create lookalikes. Custom Audiences use Google's signal types (keywords, URLs, apps, locations) to model audiences from Google's data. The two are complementary and best used together as audience signals in PMax and Demand Gen.

Should I use Custom Audiences on Search campaigns?

Yes, but as an "Observation" rather than "Targeting" setting. On Search, applying Custom Audiences as observation lets you bid up for users who match the audience without restricting impressions to only those users. This typically improves ROAS without costing volume.

Go Beyond the Keyword With Custom Audiences in 2026

Google's targeting options keep evolving, but Custom Audiences remain one of the most flexible and high-leverage tools available in 2026. They let you go beyond broad interests, leverage search retargeting on Google-owned properties, and feed precise audience signals into Performance Max and Demand Gen campaigns. In a smaller market like NZ, where audience volume is the constant constraint, Custom Audiences are how you make AI-driven campaigns work efficiently.

Next time you are tuning your Google Ads targeting, do not skip Custom Audiences. Build at least one per campaign, layer them with first-party data, and refresh every quarter.

Want help building a 2026-ready Custom Audience strategy for your NZ Google Ads account? Get in touch — we run audience-led SEM campaigns for NZ businesses across Search, YouTube, Demand Gen, and Performance Max. Or read our SEM services overview to see how we structure paid media for NZ clients.