Target Audience is the group of people a campaign, website, or offer is intentionally built to reach.
It matters because strategy keeps channels from competing with each other. When this concept is clearly defined, the team can connect budget, audience, creative, offer, tracking, and reporting to revenue instead of chasing disconnected metrics.
Example
A campaign for commercial maintenance may focus on facilities managers responsible for multi-site operations. That audience choice informs the examples, terminology and offer instead of addressing every homeowner and business owner equally.