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Key takeaways
Prospecting fills the pools that lookalikes and remarketing later convert so cheaply.
One audience per ad group, or cheap remarketing hides a failing lookalike.
Seed lookalikes from paying customers; free-signup seeds just find more free signups.
Your converting Search terms make the best Demand Gen prospecting custom segments.
Three well-funded ad groups per market beat eight starved ones every time.
In a Search campaign, the keyword does most of the targeting. Someone types "AI meeting notes tool," and you know what they want before they click. Demand Gen has no search query. The audiences you pick tell Google who to show your ads to, and the ad group is where Google sets bids and reports results. That makes audience structure the strategy in Demand Gen, not a setting you fill in at the end.
Most B2B SaaS teams come to Demand Gen from Search and set it up the Search way. Fyxer's first two tests did exactly that. Each ran one ad group with mixed signals, and together they spent about £23K for 7 conversions. When we rebuilt the account, we kept the product and channel the same. The audience structure changed. We gave each market three ad groups, one for prospecting, one for lookalikes and one for remarketing, with the same exclusions on all of them.
That is the short answer to how to structure Demand Gen audiences. The harder part is reading the results once it runs, because the three ad groups depend on each other. Prospecting pays to reach people for the first time, and those people fill the pools that remarketing converts later. At Fyxer, GB Prospecting ran at £700 CPA while GB Lookalikes ran at £126. Cut prospecting because it looks expensive and the cheaper ad groups slowly run dry. The full account story is in our Fyxer Demand Gen case study.
The Demand Gen audience structure we use
[table]
Ad group | Audiences inside it | Built from | Its job | Judge it on
Prospecting | Custom segments: competitor URLs, competitor brand terms, non-brand search themes | Your Search terms report and competitor list | Reach new people with intent signals | Sign-up-to-SQL rate, pool growth
Lookalikes | One lookalike segment | Paying or high-LTV customer lists | Find more people like your best customers | CPA and paid conversion rate
Remarketing | 7-, 30-, 90-day site visitors, 180-day YouTube viewers, branded search themes | Your tags and YouTube channel | Convert people already warmed up | CPA, with a cap on frequency
Every ad group | Exclusions: existing customers, zero-LTV signups | CRM and product data | Stop paying for people you already have | Share of new signups
[/table]
Google's own Demand Gen audience guidance recommends this one-audience-per-ad-group setup because bidding and reporting both happen at that level. Mix lookalikes and remarketing in one ad group, and the cheap remarketing conversions hide a lookalike that isn't working.
How many ad groups should a Demand Gen campaign have?
Start with three ad groups per market, one for each pillar. Add more only when an ad group has enough conversions to split without starving either half. Google's Demand Gen best practices say ad groups with 50 or more conversions perform better, and most B2B budgets can't feed more than three ad groups to that level.
Audit calls often find eight ad groups, one per competitor and persona, sharing $300 a day. Each gets four conversions a month, and nothing exits learning. Our breakdown of why Demand Gen campaigns fail covers that failure.
If you can't name the decision you'd make from an ad group's results, it shouldn't be its own ad group.
How do you build prospecting audiences for B2B SaaS?
Build prospecting from custom segments, not broad affinity audiences. A custom segment tells Google to find people who searched certain terms or visited certain sites. For B2B, that gets you far closer to a buyer than "Business Professionals" ever will.
Use three sources, all in one ad group, to start:
- Your converting non-brand search terms. Pull the Search terms report, filter to terms that produced SQLs or paid users, and use those. Not the terms with the most clicks.
- Competitor URLs. Add the homepage and pricing page of each competitor your sales team actually loses deals to.
- Competitor brand terms. People searching for a rival's name are in market right now.
Your Search account is the best source here. At Tavus, two non-brand themes, Human Avatars and AI Video Agents, outperformed the rest and took the largest share of budget (Tavus case study). In an account like that, those proven themes are the first terms we'd put into a Demand Gen prospecting segment. If you haven't built a Search account yet, start with our Google Ads guide for startup founders.
Optimized targeting is opt-in in Demand Gen. It lets Google go beyond your segments to find converters. We’d recommend putting it off during the first learning month so you know which segment drove the results, then test it on prospecting once CPA is stable.
How should you seed Demand Gen lookalikes?
Seed lookalikes from your best customers, not from every signup. Google builds the lookalike from whoever is on the list. Seed it with free signups, and you'll get more free signups.
At Fyxer, we seeded lookalikes from first-party customer lists ranked by predicted lifetime value. GB Lookalikes became the best ad group in the account: 524 conversions at £126 CPA. When creative fatigued, a rebrand video in the same ad group delivered 229 more conversions at £119.
What to know before you build one (Google's lookalike documentation):
- Seed size: the combined seed lists need more than 100 active matched people. You can use up to 10 seed lists per segment.
- Reach tiers: Narrow targets the top 2.5% of users in your location, Balanced 5%, and Broad 10%. For B2B, start Narrow and widen only when the ad group stops spending.
- One lookalike per ad group. Narrow and Broad in the same ad group can't be read apart.
- Targeting default is changing. Google is moving lookalikes toward a suggestion mode, where the lookalike becomes a hint rather than a hard limit. If you want it to stay a strict constraint, opt out using the form on that page.
One B2B catch many paid advertisers miss: customer lists made of work emails often match at lower rates than lists of personal Gmail addresses. If your 2,000 paying customers turn into 300 matched users, add more seed lists (paid users, high-usage accounts, closed-won contacts) to get the volume back.
How to structure Demand Gen remarketing
Keep remarketing in one ad group until it clears 50 conversions a month. Fyxer's remarketing ad group combined 7-, 30-, and 90-day site visitors, 180-day YouTube viewers, and branded search themes. Splitting a small remarketing pool by window gives you three ad groups that can't learn.
Two things to check:
- Exclude converters. Anyone who already signed up should leave the remarketing list, or you'll pay to convert them twice.
- Watch frequency. If CPA climbs while the pool isn't growing, prospecting is usually underfunded.
Which exclusions and demographic limits should every ad group have?
Every ad group should exclude existing customers and low-value signups. Without those, Smart Bidding finds the cheapest conversions in your account, which are often people who already pay you.
At Fyxer, we applied these everywhere:
- Existing paid users and signups with a predicted LTV of zero, through first-party lists
- Ages 25 to 44 only
- The bottom 50% of household income
Remember to treat the demographic limits as tests. Check the age mix of your paying customers in the CRM and only exclude bands that rarely convert to paid. A developer tool with many 22-year-old buyers would lose real customers with Fyxer's age filter.
Should you split Demand Gen audiences by country?
Yes, if CPA or customer value differs by market, which in B2B it usually does. Build the same three pillars per market so each one gets its own budget and bid.
Fyxer launched GB in October 2025 and added the US in November with the identical structure. By January, GB ran at £146 CPA and US at £264. Combined, Google would have pushed budget to the cheaper market, and the US would never have had a fair test.
How do you read results across the pillars?
Judge each pillar on its own job, and judge the system on blended CPA. Prospecting will always look worst on CPA because it's paying to reach people for the first time.
[table]
What you see | What it usually means | What to do
Prospecting CPA 3x to 5x lookalikes | Normal | Keep funding it, watch pool growth
Remarketing CPA rising, pool flat | Prospecting is underfunded | Raise prospecting before touching remarketing
Lookalike spending little | Seed too small or Narrow too tight | Add seed lists or move to Balanced
Cheap CPA, sales rejects the leads | Missing exclusions | Check email domains and company size in CRM
[/table]
Also check branded search. When Demand Gen ran at Fyxer, branded search impressions rose 2.7x. Much of what prospecting creates gets credited to Search. If you're still deciding which campaign type comes first, read Demand Gen vs Search. If you're weighing YouTube on its own, see our Google Ads vs YouTube Ads for B2B comparison.
Want us to review your Demand Gen audience setup?
We'll check your ad group structure, custom segment sources, lookalike seeds, exclusions, and market splits, then tell you which ad groups to merge, reseed, or fund. It's the same audit that came before the Fyxer rebuild.
Still comparing partners? See our list of top Google Ads agencies in the US and what clients say in our ScalixAI review.
