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Showing content from https://support.google.com/google-ads/answer/9606827 below:

Disable the collection of personalized advertising data

To provide a comprehensive and consolidated view of your Audiences and make audience management and optimization simpler, you’ll find the following improvements in Google Ads:

New audience reporting
Detailed reporting about audience demographics, segments, and exclusions is now consolidated in one place. Click the Campaigns icon and open the “Audiences, keywords and content” tab and click Audiences. You can also easily manage your Audiences from this report page. Learn more About Audience reporting.
New terms
We’re using new terms on your audience report and throughout Google Ads. For example, “audience types” (these include custom, in-market, and affinity) are now referred to as audience segments and “remarketing” is now referred to as “your data”. Learn more about the Updates to Audience terms and phrases.

Personalized advertising

Remarketing is one of the targeting features of personalized advertising that helps you reach people who have previously visited your website or used your mobile app. You can choose to disable the collection of remarketing data for the users who don't wish to view personalized ads. You can do so by using this parameter: allow_ad_personalization_signals.

The default of this parameter is set to true. When you set the parameter’s value to false, it will disable the usage of the data for personalized ads.

Note: This parameter doesn't disable conversion tracking.

Edit your Google tag to disable ad personalization signals

Note:

You don't need to add a new tag to your website if you already implemented the Google tag. Simply edit your existing tag as per the example below.
Setting the allow_ad_personalization_signals parameter will apply it to all products configured through the Google tag.

In your Google Ads account, click the Tools icon .
Click the Shared library drop down in the section menu.
Click Audience manager.
Click Your data sources tab at the top of the page. This opens a group of sources from which you can edit your data segments.
In the “Google Ads tag” card, click the 3-dot icon in the upper right, then select "Edit source".
Click Save and continue.
When the installation screen appears, your Google tag and event snippet will be ready for use. You can modify the Google tag to disable ad personalization signals by following the example below. To integrate the code into your site, copy the code and paste it between the <head></head> tags of the website.
The code below should not be copied and pasted as-is for use on your website. It contains placeholder values that your web developer must dynamically populate when they integrate the snippet code into their web server.

< ! -- Google tag (gtag.js) - Google Ads -->

<script async src="https://www.googletagmanager.com/gtag/js?id=TAG_ID"></script>

<script>

window.dataLayer = window.dataLayer | | [ ] ;

function gtag ( ) { dataLayer.push ( arguments ) } ;

gtag ('set', 'allow_ad_personalization_signals', false ) ;

gtag ( 'js', new Date ( ) ) ;

gtag ( 'config' , 'TAG_ID' ) ;

</script>
Click Done.

Note: If you’re using the old AdWords tag, you can set var google_allow_ad_personalization_signals = "false" ; where you set other AdWords tag parameters. See the example below for more detail.

<script type="text/javascript">

/* <![CDATA[ */

var google_conversion_id = 1234567890;

var google_conversion_label = "xxx-XXx1xXXX123X1xX";

var google_remarketing_only = false

var google_conversion_value = 10.0;

var google_conversion_currency = "USD";

var google_allow_ad_personalization_signals = false;

/* ] ] > */

</script>

<script type="text/javascript" src="//www.googleadservices.com/pagead/conversion.js">

</script>

U.S. state privacy laws

To help advertisers comply with various U.S. state privacy laws, a dedicated parameter can be added to the Google tag to indicate whether Google should enable restricted data processing (RDP): restricted_data_processing. The default of this parameter is set to false. When you set the parameter’s value to true, Google will limit how it uses certain data.

Note:

There are 2 options to enable restricted data processing in Google Ads.

A “restricted_data_processing” parameter which can be set in your Google tag in Google Ads or Tag Manager, to enable restricted data processing for particular users on your site.
A checkbox in Audience Manager where you configure your Google tag to enable restricted data processing for all users located in applicable U.S. states.

You only need to select one of these options when you're enabling restricted data processing.

Note: This parameter doesn't disable conversion tracking.

Edit your Google tag to enable restricted data processing Note

You don't need to add a new tag to your website if you already implemented the Google tag. Simply edit your existing tag as per the example below.
You can find your Google tag in the Audience Manager (see instructions below) or in the Details page of your Google Ads website conversion or conversions.
The instructions below will only set the restricted data processing parameter for Google Ads. Read how to help advertisers comply with U.S. states privacy laws in Google Ads for other Google products.

In your Google Ads account, click the Tools icon .
Click the Shared library drop down in the section menu.
Click Audience manager.
Click Your data sources tab at the top of the page. This opens a group of sources from which you can edit your data segments.
In the “Google Ads tag” card, click the 3-dot icon on the upper right, then select "Edit source".
Click Save and continue.
Note: You’ll notice a checkbox to manage data for all users located in U.S. states with regulations impacting ad targeting. You don’t need to select this since you're editing your Google tag to enable restricted data processing.
When the installation screen appears, your Google tag and event snippet will be ready for use. You can modify the Google tag to disable ad personalization signals by following the example below. To integrate the code into your site, copy the code and paste it between the <head></head> tags of the website.
The code below should not be copied and pasted as-is for use on your website. It contains placeholder values that your web developer must dynamically populate when they integrate the snippet code into their web server.

< ! -- Google tag (gtag.js) - Google Ads -->

<script async src="https://www.googletagmanager.com/gtag/js?id=TAG_ID"></script>

<script>

window.dataLayer = window.dataLayer | | [ ] ;

function gtag ( ) { dataLayer.push ( arguments ) } ;

gtag ( 'js', new Date ( ) ) ;

gtag ( 'config' , 'TAG_ID', { 'restricted_data_processing': true } ) ;

</script>
Click Done.

Note: If you’re using the old AdWords tag, you can set var restricted_data_processing = "true"; where you set other AdWords tag parameters. See the example below for more detail.

<script type="text/javascript">

/* <![CDATA[ */

var google_conversion_id = 1234567890;

var google_conversion_label = "xxx-XXx1xXXX123X1xX";

var google_remarketing_only = false

var google_conversion_value = 10.0;

var google_conversion_currency = "USD";

var google_restricted_data_processing = true;

/* ] ] > */

</script>

<script type="text/javascript" src="//www.googleadservices.com/pagead/conversion.js">

</script>

If you're using the AdWords API to send remarketing pings via server to server (for example, app dynamic remarketing), make sure to include the parameter rdp=1 to mark the request as restricted data processing.

Edit your Google tag in Google Tag Manager to enable restricted data processing

Sign in to Google Tag Manager.
Click Tags in the left column to access your tags.
Create or edit your Google Ads Remarketing tag or Google Ads Conversion tag.
In the tag configuration section, select "True" for the field “Enable Restricted Data Processing”.
Alternatively, this field can be set dynamically via a data layer variable.
Click Save.

Enable restricted data processing in Audience Manager

Restricted data processing instructs Google to limit how certain data is used. If you select this option, users located in California won’t be added to your data segments.

In your Google Ads account, click the Tools icon .
Click the Shared library drop down in the section menu.
Click Audience manager.
Click Your data sources tab at the top of the page. This opens a group of sources from which you can edit your data segments.
In the “Google Ads tag” card, click the 3-dot icon in the upper right, then select "Edit source".
Under the “Restricted data processing” section, select the "Manage data..." checkbox to turn on Restricted Data Processing (RDP) for all users located in U.S. states with regulations impacting ad targeting.
Click Save and Continue.
This will take you to a page that says "Reinstall the tag on your website". You don’t need to take any action on this page since you’ve already enabled restricted data processing in Audience Manager. Click Cancel.

You can choose to enable restricted data processing on a per-user basis using the restricted_data_processing parameter in your Google tag.

Read more about enabling restricted data processing in other tracking systems in Google Ads.

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