Although the advancement of technology and the rise of a more globalized world have made physical constraints less binding, there still tends to be some shared traits, interests, and needs among those that congregate in the same geographic area. Thus, while many other facets of digital advertising focus on who your customer is, location targeting highlights the importance of also understanding where they are.
Within the realm of paid search, location targeting entails setting the physical boundaries of where you do and do not want to target searchers. In the sections below, we’ll provide an introduction to paid search location targeting, covering its settings and limitations, location options, and methods to optimize once location targeting is in place.
Settings and Limitations
The first concept to understand about location targeting is that locations are set at the campaign level. This means that whatever location or set of locations you attach to a campaign, you cannot alter those settings at the ad group, ad, or keyword level below. As such, it is important to consider the set of ads and keywords within your campaign.
For instance, if you are running ad copy that contains a phrase such as “#1 in Virginia,” you likely would not want to set your campaign to target primarily on the west coast. Notably, the default setting for most search platforms is to target all of the United States, or the entire United States as well as Canada. Ergo, if you want to target more granularly than that, you’ll want to be sure to remove this targeting before adding in your own locations.
In addition, you’ll want to check the actual targeting method employed by your campaign. There are three targeting methods, each with varying levels of reach and control.
- Presence or Interest: This targeting method will serve your ads to people who are currently in your targeted location, regularly in your targeted location, or who have shown an interest in your targeted location. This method is the default option when creating new campaigns, so if this is not the targeting method that will work best for your business or product, you’ll want to change it to one of the others.
- Presence: This targeting method will serve your ads to people who are currently or regularly in your targeted location. In most cases, this is likely the method that you’ll want to employ as it gives you the most control over where your ads are showing.
- Search Interest: This targeting method serves your ads to people who have shown an interest in your targeted location. With this method, there is no guarantee that your ad will be shown to people in your targeted location nor even those who plan to visit, just that they’ve shown an interest. Cases where this is the best targeting option are rare, but they can be useful in the tourism industry where people are expected to research and then travel to the location.
Lastly, we’ve covered location targeting in a positive sense (target in this location) thus far. With location targeting though, you’re also able to employ exclusions that prevent your ads from serving in a specific area. It’s important to note that exclusions outweigh positive targeting. For example, if you’re positively targeting all of the United States, but you can only guarantee service to the 48 contiguous states, then you can exclude Alaska and Hawaii in the same campaign to prevent your ads from serving in those states.
Once you’ve worked out your targeting settings, the next consideration is what level of granularity is best to employ when setting up your location targeting. The primary types of locations to target are postal codes, cities, Nielsen DMAs (Designated Metropolitan Areas), states, and countries. A full list of location types can be found here. Also available is radius targeting, which entails pinpointing a specific location and including a radius of your desired length around that point.
In trying to determine which location type makes the most sense for your campaign(s), the two biggest factors to consider are homogeneity and data sufficiency.
Homogeneity refers to the idea that people in the same location should be fairly similar, and thus possess similar interests, to each other. Typically, the smaller a geographic area, the more homogeneous it is. Consider it this way—you are likely more similar to the other people in your zip code than you are to all of the people in your state. However, you’re likely more similar to the rest of the people in your state than you are to everyone else in your country. As such, the tighter the geographic area, the more homogeneous it is, and the more consistent you would expect performance to be.
Inverse to location homogeneity is location data sufficiency. In other words, the tighter a geographic area, the fewer people are in it, and therefore it becomes more difficult to collect sufficient data and make a confident evaluation of the area. In the same example from above, while you may be more similar to people in your immediate zip code, there may just not be enough people in your zip code to whom you need to serve your ad to be successful. Therefore, a wider location type, like your state, may make more sense.
Balancing These Factors
Overall, sound location targeting boils down to balancing these two factors. To find that balance, you’ll want to consider when it makes sense to “break out” your locations into new campaigns.
Suppose that you’re advertising sunscreen in the United States, and you’re able to deliver your product nationwide. Chances are that you will witness a greater volume of sunscreen-related searches in the hotter, sunnier states. In that case, it may even be worth your effort to break up your campaigns by each state so that you can run very targeted ads with the best chance of conversion in each state. However, there is still a chance that you could see success in the colder states given that people may travel to sunnier areas or observe some very sunny days themselves. In that case, while it may not be worth your effort to create ads targeted to each state, you could group all of those states together in one or a few campaigns. While volume may be lower, you can likely still generate some solid conversion in those areas.
Optimizing Location Targeting
While the above sections focus on setting up your location targeting for success, you always want to be guided by the performance that you witness in the account. Although you might have expected one location to do very well, it may just not live up to your expectations. When this happens, there are a few ways you can adjust your strategy to optimize performance.
Perhaps the most simple way is to pause your campaign, ad groups, ads, or keywords. If you were able to group your locations homogeneously, chances are that if you are seeing very poor performance in some campaigns, it may just mean that the locations targeted are not a viable option for expansion given the revenue and ROI goals you need to hit. In this case, not serving your ads in that location(s) may be the best option.
Another option would be to regroup your locations. You may find that, although you’re targeting entirely different locations in two campaigns, some locations in each campaign are performing very well while others are struggling. Here, the goal would be to homogenize your locations on performance and move those doing well into one campaign and those doing poorly into another. This will allow you to better control your bids and valuation in each campaign since you would expect a greater consistency of performance among the locations targeted in each.
Lastly, bid adjustments can be a useful tool in adjusting your valuation. Bid adjustments are most impactful when you’re targeting multiple locations in one campaign but notice that one or some of those locations are performing notably better than or worse than the others. In other words, bid adjustments can be a useful way to standardize performance among locations in a single campaign so that you can expect consistent performance throughout.
Ultimately, there is no one way to approach location targeting in paid search, nor is there one best way. Sound location targeting requires strategic planning upfront followed by continued monitoring of performance to put and keep yourself and your clients in the best position to succeed.