September 18, 2015
Many advertisers utilize geographic targeting in their campaigns. This strategy is for both business and optimization reasons. While this tactic is certainly beneficial, the default settings might not be exactly what many advertisers think they are.
The default targeting setting in AdWords and Bing is for users in or interested in a location. The AdWords option reads, “people in, searching for, or who show interest in my targeted location (recommended).” The “recommended” at the end should let you know Google strongly suggests you opt-in. In many cases, they would be right, but you need to ensure it is the right choice for your account.
Location targeting applies to both interests and physical location by default. What does this mean? The “people in” part is clear enough and refers to users located in a specific area, which is what many advertisers are looking for.
The issue is murkier when dealing with “searching for, or who show interest in my targeted location.” The effects could be as minor as a few searches outside your target area, to more extreme examples where large portions of your allotted budget are spent outside of the target location.
The “searching for, or who show interest” can trigger based on recent location, search terms, or viewed content. This could mean someone from a suburb triggers ads targeted at the nearest city. It could also mean international users are viewing content related to a city such as New York City and are now eligible to trigger ads targeted to New York City.
Evaluating The Data
The most obvious method to evaluate the data is through the dimensions and reporting tab of your platform of choice. When using this method, it is important to select the correct report.
In AdWords, you are given both a “Geographic Report” and a “Users Location Report.” The Geographic report is similar to the “users in or interested in” targeting setting. User location refers to the physical location of the user.
This should help clear up the discrepancies you have as the geographic report may show 100 conversions from Los Angeles, but the user location report only shows 75 conversions for Los Angeles. Because it is such a large city with a lot of user interest, it will have a lot of traffic associated with it from surrounding communities and beyond.
Who Should Opt-In?
There isn’t a hard line for who opts in or out. If you rely on strict locations such as moving services, medical care, or don’t serve surrounding areas, you should exclude the “users interested in” segment and focus on users who are physically located in your target location.
On the opposite end of the spectrum are retailers and those for whom tourism and visitors drive sales. Both of these groups feature users outside of the geographic location but represent a potential value. There is definitely value in advertising to users who you can serve via mail or who will soon be in your location.
One additional facet to examine is if out of country searches are driving significant traffic and costs. We’ve used New York and Los Angeles as examples. Both are prominent American cities existing on the coast, boasting large populations of visitor’s travelers and representing the “United States” to foreigners.
If someone outside of the United States is going to trigger an interest in a location in the states, it’ll probably be one of these rather than a small city in Indiana. Even if you opt into broader targeting, make sure you periodically check your user location report.
I recently audited an account in the travel industry. The account currently used, and had always used “people in, searching for, or who show interest in my targeted location.” The settings targeted users in the United States and Canada. While using similar targeting methods, targeting specific regions, each country performed differently when it came to user segments.
Both the United States and Canada had about 20% of their total cost driven by out of region traffic. This makes sense as sometimes people are willing to travel to a destination and search for that area, even if they aren’t located in the area. Depending on your situation, this may drive an appreciable number of leads that you don’t want to ignore.
The real decision comes into play when evaluating just how many conversions this user segment contributes. These out of region searchers may be composed of users who are “interested in the region” but have no intent of actually going there or purchasing the service.
On a tangential example, I once audited the display efforts of an education account. Their New York targeting generated a lot of traffic and according to the user locations report, a lot of traffic from users in Southeast Asia, which were not the client’s target demographic. This created a noticeable amount of spend with no conversions, making it an easy exclusion.
Back to our specific example. Both regions generated about 20% of spend on out of region clicks. Was it worth it?
As seen above, the United States campaigns performed similarly when it came to in region and out of region. While Cost/Conv was higher on Non-Regional searches, it wasn’t nearly as dramatic as Canada. Canada wasn’t just a slight increase but provided new avenues for investigation such as “which campaigns are driving theses costs” and “why is the non-region conversion rate so much lower?”
If you find yourself in a similar situation the next step is to look into your user locations report. If reach is important to you, you may be able to keep the “users interested in” by excluding specific areas and regions. If that isn’t an option or you don’t want to show out of region, the next step is to swap settings to only target users in a geographic area. Of course, as a campaign level setting you can take a more nuanced approach, rather than relying on an either/or decision at the account level.