Geo-Targeting and Your PPC Budget

- February 12, 2010

Sometimes it seems as if your Google Adwords budget can never be large enough to reach your target market or customer. There are ever changing factors involved in the bidding process such as, new competitors entering the market, a surge in demand for a product, seasonality of a product, etc. One important concern is how to maximize your online ad spend to reach its potential. Geo-targeting is extremely important and often overlooked.

If there is tracking software on your website, such as Google Analytics, you will be able to determine where the good quality and poor quality traffic is originating.

Geo-Targeting Campaigns at a Smaller Level

When looking at your analytics program it is important to notice where your sales or your set “goals” are performing in reference to geographic areas. This data will either show you where you need to cut back, increase, exclude, or consolidate ad spend.

Below is a 30-day snapshot of paid search traffic on Google Analytics’ Map Overlay feature at the city level, sorted by the number of visitors, for a sample client.

Google Analytics’ Map Overlay

Looking at this table you can notice right away that New York City does not have any transactions from this particular account. This may or may not be a cause of concern depending on your business location, structure, etc. If it is a concern, consider excluding the New York metro area from your paid search campaigns to avoid spending your budget on a location that is not converting.

On the other hand, if you are receiving many orders and customers purchasing from your store located in New York, you may want to consider excluding New York City from your other campaigns and create a New York geo-targeted campaign and allocate a separate budget to this campaign.  This will enable you to better control how much you are willing to spend in this particular area and possibly pull back on other, lower converting areas.

Below is the same snapshot of paid search traffics on Google Analytics’ Map Overlay feature at the city level, sorted by the total amount of revenue.

Google Analytics’ Map Overlay

In this situation if we had more data over a larger period of time, we could use this information to increase ad spend in areas where the average visitor is making larger purchases than the average sale on the website.

Below is the same snapshot of paid search traffic on Google Analytics’ Map Overlay feature at the city level, sorted by the total amount of transactions.

Google Analytics’ Map Overlay

In this scenario you may want to give Syracuse, New York its own campaign. This would enable you to perform a test with a separate budget. Even though the average values of the transactions are low, you may be able to receive a high volume of transactions.

These are only a few examples of how to geo-target your ad spends to use your budget efficiently. Always remember, each aspect of a campaign, especially the ad copy to the geo-targeted location, is extremely important to kick off any successful paid search campaign.

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