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Location targeting search ads efficiently

There’s quite a bit of confusion about how to use location targeting efficiently in Google Search Ads, if the accounts we take over have anything to teach us. It’s great that we can target ads to people down to postcode level, but the key is to select the areas where the conversions are good, not the sales or the clicks.

What do I mean by this? Remember, search advertising works on a pay per click basis. So if there’s not much interest (i.e. customer numbers) in a location, there won’t be much cost either. But that doesn’t mean it’s not good value for money.

For example, let’s say a company sees a market of 100 blue widget sales a year to India, and 1 to New Zealand. I’ve seen plenty of accounts which take the attitude: “Let’s spend our money in India, because there’s much more business there”.

However, to get those 100 blue widget sales, advertising widely in India, might take 100,000 advert clicks (a 0.1% conversion rate). To get that 1 sale from New Zealand might take 100 clicks (a 1% conversion rate). Where’s the value play? Why spend 1000 times as much to get 100 times the sales?

In reality, we’re not going to be talking about these sort of extremes, but we often see those trying to restrict their spending focus on the wrong geographical areas. Sure, that spending in the West Country could be cut in favour of the M25 area, as the company sees more potential customers there. But in doing so, would that be losing what happened to be the best value advertising?