Audiences, in general, will allow you to try pulling up your ads to different groups of people based on tons of different criteria!
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Figure: Bad Example – No audiences were set up yet
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Figure: Good Example – Add specific audiences and increase the engagement on your campaigns with your target audience
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Figure: Find your excluded audience so you won't waste any money for useless clicks
To be able to choose your audience and even create remarketing campaigns, you will have to use the tool “Audience Manager". Click on: Tools | Shared Library | Audience Manager
You'll find: Audience lists, Audience insights and sources.
On Sources, you can link Google Analytics, YouTube (if you use this social media), Google Play and App Analytics (if you sell apps). All of this will bring information that will help you build your custom audience.
To build your In-Market and Affinity audiences, you can select from some options that Google will give you like below:
Figure: In-Market audiences that might be your right target
Figure: Affinity audiences suggestions from Google
