Can a bad audience list negatively affect optimization in Google Ads display network campaigns?
I understand that Google uses customer match (and tag-based?) lists in the account to optimize ad serving, even if the list is not explicitly used in the campaign.
I’m talking about the setting “Use all Customer Match lists in Smart bidding and Optimized targeting”.
The problem is I have a list (about 700,000 email addresses) loaded up in a customer match segment. This is a list people that have signed up for my service some time in the past and then stopped using it.
I have a re-engagement/winback campaign to try to target them again and get them to return. It works as expected.
But now I’m thinking, when it comes to my prospecting campaigns (for new users), this list is the anti-list of who I want. It’s literally people that have tried my service and didn’t like it.
It’s one thing to use it for a winback campaign, but with prospecting of new users, this might be hurting me instead of helping.
If Google tries to find more new prospects taking into account the attributes of users in my list, wouldn’t it match to people who are likely to sign up but then not stick around and stop using my service?
Any thoughts on this?
The short answer is:
Yes, a large and “bad” customer match list of lapsed customers could potentially negatively affect your prospecting campaign’s optimization, especially when the “Use all Customer Match lists in Smart bidding and Optimized targeting” setting is enabled.
Google uses all available customer data, including your customer match lists, to inform its Smart Bidding and Optimized Targeting algorithms.
If a large segment of this data represents users who ultimately don’t convert or stick around (which is true of your 700,000 lapsed users), the algorithms might inadvertently focus on finding new users with similar characteristics, leading to low-quality sign-ups.
The best solution is to create a dynamic or constantly updated “good” customer list, consisting of users who have recently converted or are highly engaged, and explicitly use only this positive list in a Smart Bidding or Optimized Targeting-focused campaign while excluding your list of lapsed users.
A more permanent and automated solution involves integrating the Google Ads API with server-side tracking via a service like Stape or Google Cloud Platform to dynamically manage your customer match lists based on high-value events.
The long answer is:
Your suspicion is entirely valid.
When you enable the “Use all Customer Match lists in Smart bidding and Optimized targeting” setting, you’re essentially telling Google to use all the data you’ve uploaded to build its understanding of a valuable user.
Google’s machine learning algorithms look for patterns and attributes in your existing audiences – including your large list of 700,000 lapsed users – and apply those learnings to figure out who to target, even in a prospecting campaign.
If the defining characteristic of this massive audience is that they signed up but then canceled, the algorithm could be optimizing for “sign-ups who eventually lapse.”
To fix this, you have a few options, the most direct being to pause or delete the list of lapsed users from your Customer Match audiences if you’re not actively using it for a winback campaign and if the “use all” setting is enabled.
However, since you are using it for a winback campaign, the best approach is to create a separate, “good” Customer Match list containing only your highest-value customers – those who have recently converted, completed a high-value action, or have been long-term users.
You can then ensure your prospecting campaigns that use Smart Bidding or Optimized Targeting only use or reference this positive list, or you can explicitly exclude the list of 700,000 lapsed users from your prospecting campaigns.
A much more robust and automated solution is to use the Google Ads API to manage your lists dynamically, which overcomes the limitation of having to manually upload static lists.
You can integrate the Google Ads API with server-side tracking solutions like Stape or your own implementation on Google Cloud Platform.
Server-side tracking allows you to send data directly from your server to Google Ads.
You can use this setup to fire “good” events, like a user completing a high-value purchase or reaching a specific engagement milestone, and then have the Google Ads API automatically add that user to a “High Value Customers” Customer Match list.
Similarly, you could use the API to automatically remove users from a positive list or add them to an “Inactive Users” exclusion list after they trigger a low-engagement or cancellation event.
This API + GTM + Stape/GCP flow is excellent and cheap because it automates the list management process based on your actual business logic, ensuring your Customer Match lists are constantly fresh and only contain the highest-quality or lowest-quality users, which is the perfect signal for Google’s machine learning.
For example, instead of firing the generic Standard Event purchase, you could fire a custom event like high_value_purchase
This level of dynamic, event-based list management prevents the optimization algorithms from being poisoned by stale data.
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