It happens to the best of us.

I remember not too long ago, I was running an ad campaign for a client about being in a "New York State of Mind." New York was in the headline and the copy.

Too bad the campaign I was optimizing was for New Jersey. Whoops! I caught it after only a day, but that didn't reverse the wasted ad spend. I learned my lesson: enter once, check twice.

It's no secret that geotargeting has opened many doors for advertisers. Geotargeting helps focus on a specific market, resulting in more relevant messaging and a better return on investment.

But sometimes too much of a good thing can be a curse. And in those instances, geotargeting, well, it isn't so great.

Below we'll review geotargeting ads and discuss how geotargeting can help or hinder your campaigns.

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Geotargeting Ads

For geotargeting ads to be successful, you have to target the right area with the right content at the right time. The easiest way to ensure you're not wasting clicks is to use an accurate location. For instance, if you're based on Maui, Hawaii, and don't offer shipping to any other part of the U.S., then you'd want to only advertise to people on Maui.

Marketers choose to use geotargeting ads for several reasons. Below let's review the advantages of geotargeting:

1. You can hide ads from your competitors.

If you're testing a new strategy or offer, you don't want your competitors to know, right? Hiding your ads from your competitors is possible with a combination of geotargeting and IP exclusion.

With IP exclusion, you prevent people from your competitors' corporate offices from seeing your ads. And with geotargeting, you can still advertise in their so-called backyard. It keeps your strategy safe without removing an entire market from your search strategy.

First, identify your competitor's IP addresses. Once identified, you can exclude them from your AdWords Campaigns. To exclude these IP addresses:

  1. Click on the campaign tab
  2. Click settings
  3. Click advanced settings
  4. Click IP exclusions

Google Adwords IP exclusions.

Here you can enter the IP addresses you want to drop. Once excluded, users searching from those IP addresses will no longer see your ads.

Why It Works

Remember the saying, "out of sight, out of mind"? Your competitors keep an eye on your marketing efforts, but you don't need to make it easy for them. But, excluding IP addresses from specific geotargeted locations isn't foolproof. It won't take into account remote users from other locations. And competitors can still use tools like SEM Rush and SpyFu to see what you're doing.

IP exclusion plus geotargeting is helpful in an aggressive industry such as car insurance. But, if the competition isn't fierce, your time is better spent elsewhere.

2. You'll become locally relevant.

In some industries, it pays to be local and relevant. Local restaurants and small businesses with few locations can benefit from localized advertising. But, big businesses can, too. Politicians and real estate companies can reap the benefits of geotargeting.

Congressional geotargeting example.

For congressional district targeting, use the congressional district code instead of city, state, or zip code.

Real estate geotargeting example.

In real estate, most buyers know what city they want to live in. Real estate companies can target a buyer's simple query with localized relevancy.

Why It Works

Targeting congressional districts makes sure ads are only seen by voters in that area. This also means the competition can target areas where they need more voters.

In real estate, people new to the home buying process identify with a trusted source. Weichert Realtors identified itself as a trusted source with its use of ad extensions. By showing seller ratings and Middletown in the results, users will check this company out first.

Although geotargeting is helpful for local campaigns, it isn't always the route to go. Plus, you might face some problems when you begin with geotargeting. Below, let's review the problems with geotargeting:

3. You might not optimize properly.

Washington D.C. and Washington state have little in common outside of their name. But, they are quick to be mistaken. It's likely these Washington D.C. podiatrists want their ads to appear in searches for the D.C. metro area. Yet the map results are for podiatrist practices in Washington state. It's not very relevant, is it?

Washington DC versus Washington geotargeting example.

Geotargeting allows you to get granular or broad with your options. Did you know the term "Washington" appears in eight search terms in Google AdWords? This increases the likelihood of human error.

How to Avoid Unoptimized Ads

When you've optimized, you've identified the audience most likely to convert. Someone looking for a podiatrist in Washington state isn't going to convert for a podiatrist in Washington D.C.

Take a moment to add the area you want to target (Washington D.C.) and exclude the areas you don't (Washington state). An optimized paid search campaign decreases wasted ad spend and helps increase ROI, too.

Washington exclusion geotargeting.

4. Hyper geotargeting may lead to locations competing against each other.

When segmenting a campaign, you can separate by location or product or service. They both have benefits and drawbacks. But, when you have several locations close together, it can make a big difference in the success of a campaign.

Companies with many locations close together should segment by product or service rather than location.

The image below represents four locations of a popular grocer in the Boston metro market. It's been optimized to target a five-mile radius around each location. But you'll notice there is an overlap of these stores. Each grocery location is competing on the same keyword, increasing the cost-per-click (CPC).

Hyper geotargeting example.

How to Avoid Competing Locations

Segmenting by product or service over location is smart if your locations are all bidding on the same keywords. It will keep the CPC lower, increase returns, and better your performance. If separating by product or service is not an option, consider A/B testing. You can test on certain keywords and locations while being careful not to overlap your targeted area.

Geotargeting in Marketing

Now that we know what geotargeting is and a couple of the advantages and disadvantages, you might be wondering, "How can I use geotargeting in my marketing campaigns?"

Essentially, you'll use geotargeting to deliver the right message at the right time. For example, if I search for "marketing agency," Google (or any search engine) will deliver results based on my location. I might see a local marketing agency ad. This ad is more likely to be successful because I'm actively looking for a marketing agency in my area. See example below:

Local geotargeting example for a marketing agency ad.
However, geotargeting doesn't only need to be based on real-time location. It can also be based on historical location, meaning it can target people who have recently visited a region. On the other hand, it can also target those who actually live in a particular region and aren't just passing through. You can use all of these geotargeting options in your marketing campaigns.

So, how will your ads differ based on location?

Your ads should be location-specific, meaning, depending on the location, they'll use different:

  • Language
  • Currency
  • Offers
  • Visual elements

For example, your ad should take culture into account. It should be in the right language, display the right currency, and include visual elements that make sense for the culture. Is a certain color lucky in one country, but unlucky in another? Take those cultural norms into consideration when designing your ads and landing pages.

Additionally, it's also important to consider how you're going to use geotargeting to your advantage.

You can exclude certain locations, use location-specific keywords, run local awareness campaigns, and create custom target lists for your ads. For instance, you might be running a local awareness campaign for a Seattle coffee shop. Your ad can use a location-specific keyword like "Seattle coffee shop" and only show up in Seattle zip codes.

Geotargeting Software

Google Adwords, or any other search engine pay-per-click software, uses geolocation software to determine the location of a user.

Typically, it works by identifying the IP address to determine the country, city, or zip code. The software can also look at other elements like credit card information.

As a marketer, you won't need to know the nitty-gritty of how it works because the software you use to implement your ads will run behind-the-scenes.

For instance, you can use the ad tools in your marketing software like HubSpot or Marketo to help create ad campaigns based on audience location. On the other hand, you can also create your ads directly in Google Adwords.

Geotargeting can be helpful for businesses when used correctly. It's important to understand not only how it works but why it works to best optimize a campaign and your success.

Editor's note: This post was originally published in March 2015 and has been updated for comprehensiveness.

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Originally published Dec 11, 2019 5:19:17 PM, updated June 09 2020