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An Executive’s View: Geo-Targeted vs National AdWords Campaigns

My goal with this post is to help beginners see the difference between geo-targeted and national campaigns in Google AdWords.  I also want to give you some ideas on how to increase you ROI and protect yourself from waste.

If you are experienced using Adwords you will understand the direction of this blog post, but for those that are not, I will take a couple of sentences to initially explain the difference. Google’s pay-per-click (PPC) system AdWords allows you to segment the audience who views your ad in a number of ways. One such way is to set a geographic filter on those you want to view your ads. These geo-targeted ads (geographic location based advertisements) are based on the origination of the IP address of the viewer. It is a pretty powerful filtering tool, but it adds another level of debate about how best to utilize your PPC budget.

We started using PPC marketing through the Yahoo/Overture system in 2005. We moved into the Google PPC space in 2006. In both instances we set up national campaigns. We set up these national campaigns out of ignorance and the limited capability of geo-targeting in the system at that time. We started really testing geo-targeted ads in 2008, and have been testing ever since.

From a strategic prospective here is how I see it…Geo-targeting is a filter or like SCF rings if you are an old direct mailer. This filter allows you to geographically control who gets your messaging. The difference from a direct mail prospective is you only pay when someone clicks, whereas with mail you pay for all of your potential impressions upfront. So filtering in direct mail is critical to get a strong return. Geo-targeted campaigns become as much about relevance as maximizing return, and relevance is critical in internet marketing.

National campaigns are somewhat like the spray-and-pray model, or carpet mailing, that happened frequently in the 1990s (I was once with a company that mailed over 60 million pieces of mail in both 1999 and 2000, and it was not a credit card company!).   Even though this post is on geo-targeting your ads, I have to admit I really like national campaigns. National campaigns work on products that someone will travel for or can access from anywhere. Filtering by keyword, instead of geography, can have fruitful results under the right circumstances. If you go national, than you want to switch your focus to long-tail keywords (keywords of four or more words). This allows you a much larger pool to work through to find your best potential customer.

One of the worst things you can do though, is to use generic keywords in a national campaign. This is just as bad as going national with a local product. Going national with generic keywords means you lack relevance. You will get lots of ad impressions, but very little click-through, or if you get clicks, you get no return and you frustrate a potential future customer. Most people (me included) hate clicking on an ad to find the content not relevant to what I was looking for, and being pitched something else. Also with generic keywords you will be competing with a ton of other companies for position. This will significantly raise the cost for an impression or click. So if you go national with a keyword like “computer training” you can expect three things; a very expensive click through, very poor positioning, and some upset folks who click through because you didn’t have what they wanted.

Geo-targeted ads are a easy choice for a localized product, but you will still need to expect competition. In the face of that competition you can go with generic keywords, but you will pay more per impression/click. Also you will have to be aggressive in setting both budget and your keyword bid to gain a good position for your ad. My suggestion here is to test both generic and long-tail keywords and measure your return.

For a product that can be used by anyone anywhere or a product that is location-based but people will travel for, it becomes much harder to set up a geo-targeted campaigns. The first question you have to ask yourself is: ‘what is the value of an impression.’  If you go national with a product you feel fits the travel for or anywhere use criteria, you are going to get more impressions. I personally don’t value impressions at all. People go through ads too fast and have no memory of what they saw. So if you are measuring success on impressions you may want to rethink your strategy.

What you want to look at initially is your click-through percentage. In general geo-targeted ads should get a higher click-through percentage if you are focused on the right keywords. You should get fewer impressions, but more clicks. Also, you will pay less because you are not slugging it out with a ton of other vendors so your ad will get better placement because of the reduction in competition. National campaigns are best optimized with long-tail keywords. These keywords, as discussed above, should be very specific to your product or service. You will significantly reduce the competition for the keyword, which will reduce your click-through rate and should increase your ad’s position. You may want to test some slightly more generic keywords on a national campaign to see if there are any “openings.” You might find a generic keyword with less competition, and because of the increase in impressions, you will get more click-through and drive eyeballs to your site.

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