Using location targeting in pay-per-click advertising is one of the most important ways that you can narrow your targeting and improve your performance. I’ve previously discussed the basics of location targeting and this post will focus on a more intermediate concept: layered location targeting. Layered location targeting is simply having multiple levels of targeting that overlap. Let’s say you’re targeting the United States, New York State, and New York City. The latter two are contained within the US, but you’re layering tighter location targeting on top of that.
Why Use Layered Location Targeting
With layered targeting, you are essentially targeting the same location multiple times, which can seem a little silly. Why do I want to target New York City across three layers? The answer is quite simple: control. By layering your targeting areas, you are better able to control how much you bid for smaller geographic areas based on performance and business need. I’ll give a few examples.
Let’s say you’re a retail store located in New York City. (I use NYC a lot on examples because Taikun is located here in NYC) Your most likely customers are people who live or work very close to your store. You are willing to pay the most to advertise to these people because they’re the ones who are most likely to visit. So you target people who are within a 1 mile radius of your store and you make a bid adjustment of 40%. So if your normal bid is $1 with the adjustment it will be $1.40 New York is a big place and you still want to reach people who aren’t super close to your store, but will still potentially come. So you create a second bid adjustment for a 2 mile radius around your store. And because these are still good potential customers--but not as good as 1 mile--you create a bid adjustment of 20%. Your final, bottom layer, are the total geographic area you want your ads to reach. In this example, we don’t want to go too far since it’s retail, so our bottom layer is a 10 mile radius, and there is no bid adjustment on it. This sort of structure would look like this:
Web Service Company
Another great example is a web service company. Let’s say you offer a consumer web service, and your customers can be found anywhere in the United States. You want to make sure you’re reaching all of them, but you want to know how you perform in greater detail. So you create an additional targeting for each of the 50 states plus Washington DC. And as you get this data coming in, you realize that your conversion performance in one state is not as good as it is in another state. In order to reduce your cost per conversion and improve your ad performance, you can stop your ads from showing in the states where they are performing poorly, or create a negative bid adjustment so you’re spending less. Let’s say California is more expensive 2x more expensive than your average cost per lead. You can choose to exclude California or create a negative bid adjustment to bring that cost down. This sort of structure looks like this:
Taking Location Targeting Further
Having layered location targeting is a great intermediate adwords tactic to apply to almost any PPC account. The added control will allow you to spend more budget more wisely and improve your advertising’s return on investment. In some future blog posts, I’ll write about even more advanced strategies for location targeting. Location targeting is one a key optimization tactic for improving PPC campaign performance and improving ROI and is one of many that we perform for our PPC management services clients.