This can be categorized into 3 steps:
Permission User profile import Audience setup
In order to setup Audiences if you are not going to use SharePoint system account, then the foremost thing needed is to have admin rights in SSP. In order to do that follow the below steps:
After the above is done ensure that you add the same account in ‘Process Accounts with access to this SSP’
User profile import
Now we need to do one more important step before we jump into Audience creation, i.e. running a profile import ensuring that all the user accounts those will be there in the Audience are in the User Profile List.
Now you are ready to setup Audience