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“Unknown” in Google Ads demographics refers to people whose age, gender, parental status, or household income Google has not identified. I.e. Unknown audiences are those people who don’t have any data to classify them in any of the groups.
These people may include users who didn’t sign into Google, didn’t fill in their gender or age in Google properties, cleared their cookies recently or browsed incognito.
In my experience, “unknown” demographic users don’t typically convert as well as known demographics who you know are more likely to purchase your offer.
For example, if your offer is typically purchased by women, “unknown” may convert at a lower rate than targeting women, and possibly even lower than targeting men.
If you’re separating your campaign budgets by demographics (this can be a great idea in some industries), it is better to add unknown into the campaign segment with the lower budget.
Your results may be different though, so of course check your own stats!
This tip and many others are found at https://www.petramanos.com/category/tips/