Geo-Targeting Isn't Just for Local Businesses Anymore

by Jason Tabeling

Do you use geo-targeting in your paid search ads? The answer is probably "yes" if you only sell products to certain areas. However, the answer is probably "no" if you sell products nationally. That may be a mistake.

Most people think of geo-targeting settings for two reasons: either supporting the geographic areas their business supports, or for local promotions or events. While geo-targeting makes perfect sense in those situations, using geo-targeting in even your regular campaigns can have some significant advantages, even if you already have a successful paid search account.

Why should you geo-target your successful paid search campaigns? Basically, geo-targeting provides another layer of data, deeper than the keyword level. It expands on the knowledge of which keyword is performing, and adds information about which state a keyword is performing in. This allows your bidding decisions to be made with better data based on these regional factors:
  • Competition: The number of advertisers is different for each region. While you may not be geo-targeting, many others are. So your CPCs can, and will, be very different.

  • Product price: What costs $100 in West Virginia may cost $200 in New York. Therefore, your CPA metrics can and should be different for each region, because revenue will vary based on location. This impacts your ROI and, therefore, your allowable CPC.

  • Conversion rates: Some regions are in better economic situations than others, and are more likely to purchase and convert. In other cases, one region may have users that are more Internet savvy, etc. Many factors can affect conversion rates, and these factors will vary by geography.

  • Brand awareness: Your brand may be stronger in some parts of the country. This might be based on the way various media is purchased, or store locations. This difference will impact your CTRs and therefore your quality score.

  • Ad copy: It may be hot in Florida and cold in Maine. There are also regional differences in what things are called, or ways things are talked about. The message in your ad copy could target these differences
Here is some example data that demonstrates the differences we're seeing for our clients. This difference has led to some eye opening conclusions and strategies that are being implemented in search campaigns, as well as throughout other media types.

State Profit Per Click
New York $0.25
California $1.23
New Jersey $0.75
Texas $0.86
Ohio $2.50
Maine $1.32
New Hampshire $0.23
Washington $0.42
Florida $1.01

To technically implement this strategy, duplicate any given campaign exactly as it stands today. For example, if you have a campaign called "Tennis Shoes," copy it and call it "Tennis Shoes -- New York" for targeting New York (or whatever geo-targeted region you like).

You can take two approaches with the original "Tennis Shoes" campaign. You can either remove New York or keep it national. I suggest you keep it national, so that those folks who can't be identified geographically are still able to see your ad. This is especially important if that campaign is already working well, and allows your campaigns to maintain current traffic levels. The only downside to this is the duplication of your keyword list.For example, if you were managing 200 keywords in your "Tennis Shoes" campaign, now you're managing 400 keywords across both campaigns. This can add work to your bid management and reporting duties. However, the impact this can have to your campaign metrics should easily justify the slight workload increase. Start slowly and think about the states or regions that will get you the most "bang for the buck." For this strategy to work, you don't even have to select a single state (although it makes it much easier for reporting and digesting the data). It can be a collection of states, regions, cities, etc. The basic idea is to dive deeper than your keyword level, gain insights into how your campaigns are performing and optimize against that data.

Jason Tabeling is director of search and media at Rosetta. Jason has a deep understanding of paid search marketing, online display advertising, and comparison shopping engines. He has successfully managed dozens paid search campaigns during his career, and has developed evolving strategies for various clients focusing on each clients core competencies in both the online, and offline channels.

Using Geo-Targeting to Boost Your PPC Results

By Melissa Mackey

Everyone knows we're in a recession. When companies cut spending, one of the first things to go is often advertising dollars. According to ZenithOptimedia, overall ad spending is expected to decline 8.5 percent this year.

Internet advertising is defying the trend, though, and is expected to increase by more than 10 percent in 2009. And much of that money is being spent in PPC.

With more advertisers jumping on the PPC bandwagon, it's becoming more difficult to maintain market share online. PPC marketing is perceived as a highly effective use of advertising dollars due to its high ROI trackability, and ease of entry. As a result, more money is moving from traditional channels to PPC.

While that's great for the SEM industry, it means more competition -- and sometimes translates into a tougher market for PPC advertisers. Combine the increased competition with low consumer confidence and spending levels, and it often leads to higher cost-per-conversion for advertisers.

Paradoxically, another outcome of the recession is a reduction in search volume, especially in certain verticals such as travel. Fewer consumers searching for products and services means fewer prospects for advertisers.

With more advertiser competition for fewer prospects, it's critical to get creative in finding new pockets of opportunity for online dollars without blowing the metrics out of the water. One such way is by making extensive use of geo-targeted PPC campaigns.

Geo-targeting is an obvious choice for local or regional advertisers who can't, or don't want to, serve a national audience. However, geo-targeting can also be a great choice for national advertisers who want to expand their reach.

Geo-target PPC Campaigns to Key Feeder Markets

Travel clients, in particular, can find success with this by drawing the most, or best, customers. One of the great things about geo-targeting is the ability to bid on general terms that you can't afford on a national basis.

For instance, buying the term "Las Vegas Hotel" on a national scale is pricey, and the ROI may not be all that great. But buying "Las Vegas Hotel" in a three-state region around Vegas can work very well, because those searchers are more likely than average to convert.

Supplement Offline Advertising Campaigns

This is another effective use of geo-targeted PPC. Syncing up an online message with TV, radio, and outdoor campaigns, which are often regional in nature, and repeating the message as closely as possible online in those broadcast markets, is a great way to build brand awareness and help with message recall.

This method works especially well for e-commerce marketers who want to capture searchers early on in the search funnel. General keywords can be used, as well as phrases from the offline creative -- many of which would be expensive and/or ineffective on a national basis, but are very targeted on a geo-level.

Promote Online Contests and Giveaways through Geo-targeting

As you can imagine, bidding on "free coupons" and "sweepstakes" nationally costs a fortune. However, bidding on these terms in a single designated marketing area is surprisingly affordable.

Better still, geo-targeting provides a great source of leads for the client from individuals looking for freebies who probably weren't initially seeking out the advertiser's product or service. If you're looking to build an e-mail database of prospects in an inexpensive way, running a geo-targeted online contest that requires an e-mail address to enter can be a very effective way to add to your e-mail database.

Geo-targeted ads also tend to get good quality scores, resulting in lower click costs than can be had on national campaigns. Lower CPCs translates to lower cost per conversion and higher ROI.

If you're faced with a limited PPC budget or want to get in on the action earlier in the search funnel by bidding on general phrases without blowing your budget, consider geo-targeting. All three major PPC engines offer it, and it can definitely be a worthwhile source of PPC leads.


Melissa Mackey is online marketing manager at Fluency Media, an Ann Arbor, Mich.-based digital agency serving mid-to-large sized companies and institutions. She also blogs at Searching Beyond the Paid, where she writes on the topics of pay-per-click marketing and other aspects of search engine marketing.

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