When running locally and nationally targeted campaigns you need to strike a balance between your keyword focus and your geo-targeting focus. This means that if your targeting focus is wide, then your keyword focus should be narrow – and vice versa: if you’re targeted distribution area is small, then your keyword focus can expand.
You can have two sets of keywords for the same product when advertising to a national audience as well as to one that’s local. The keywords that belong within your national campaign should have a narrow focus. Broad keywords on a national level may yield poor results. Your national campaign should feature product names, numbers, and other qualifiers so that you are speaking to your core audience. For example, if you sell square plastic widgets, you wouldn’t want to use the keyword “widgets” in your national campaign because it’s too broad; you’d want to use “plastic” and “square” in your keywords. See the graph below:
If your product is extremely specific to a small local audience then you can combine both of these methods and use tightly focused keywords (your “square plastic widget” keywords) within a tightly focused geo-targeted campaign. This is assured to drive the highest qualified traffic to your site. Here is the graph below:
You can geo-target and keyword target in many different ways. The main point is to make sure that your keywords are appropriate for your audience. Remember, you need to cast the right net into the right pond, otherwise you’ll catch the wrong fish.