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October 23, 2013: People are all different, but similar types of people tend to live together in the same geographical areas. By knowing a given geo-region, for example a U.S. Postal Zip Code, or DMA (Designated Marketing Area) you can infer – with great accuracy – the age, income, and psychographic orientation of individuals in that area. Obviously geography doesn’t perfectly predict demographic or psychographic variables for a person within that geography, but that doesn’t matter because marketing is a game of odds.  Any time we can increase the odds that a consumer (customer or prospect) is more likely to be favorably inclined to purchase our product or service or inclined to buy more of it we have a winning formula.

This fact has big implications for search marketers, especially for those engaged in pitched battles over top positions in SERPs. Geo-targeting allows them to zero in on people who are more likely to convert to their offers, and limit exposure of their ads to geographical zones in which conversions are less likely. Doing so results in higher CTR (due to a relevance boost), better Quality Score, more volume, and higher-position listings when compared to non-geotargeted campaigns.

Geotargeting in Google and Bing
Google and Bing offer search marketers the ability to geo-target their campaigns.  Top-level geo-targeting units include country/nation, areas within a country, and radius (also known as “proximity targeting”).  The universal method to geotarget is by cloning existing (parent) campaigns into child campaigns, each of which covers a given geographical area. These child campaigns can then be programmed so that bids on certain keywords are higher, thus generating significant volume increases on keywords that advertisers could otherwise not afford to place in top SERP positions. Conversely, geographical regions where people are not good prospects can be excluded from campaigns.  With Google enhanced campaigns, you can bid boost by geo without having to create an additional campaign.  However, inc some cases it still makes sense to break down your campaigns by geo, because that way you can specify different ad creative personalized by geography and also more easily customize landing pages.

Some caveats
One important caveat before you begin: although geo-targeting is powerful, you should know that search-engine based geo-targeting isn’t an exact science. The reason for this is simple: the search engines use IP reverse lookup to establish the geolocation of users, and although searchers sometimes reside in close proximity to their ISP, they often don’t. I’m sure that geolocation accuracy will improve in the future, given the fact that mobile devices transmit location data. Provided that privacy concerns can be addressed, it will soon be feasible to precisely map where each searcher comes from. Until that day arrives, however, geo-targeting really only improves the odds that a given user comes from a given location.

5 Geo-Targeting Power Tips

1. Do Your Homework
Before you start geo-targeting, ask yourself where most of your orders have historically come from. Your sales data is broken out by geography so that’s a good place to start.  Also look at the psychographics for your product and/or service, leveraging your internal research and customer studies. Applying common sense can rule out a lot of locations; for example, if you’re selling model railroad supplies, you probably want to stay away from advertising in large cities where cramped living spaces make this hobby difficult or impossible.

2. Be Geo-Relevant
Your ads – and your landing pages – will do better if they’re tuned to the native vernacular of the location in which they’ll be served. For example, “hero” sandwiches are known as “grinders” in Philadelphia, and “waterbugs” are known as “Palmetto Bugs” in Florida, and carbonated sugar water is called “pop” or “soda” in different parts of the U.S.  Your ads may also “pop” better and your landing pages convert better if you include a word or two that marks it as a geo-targeted ad.  For example, an ad that that reads “Rapid City Exterminator” may perform better than one that lacks this city-based callout.

3. Opting In vs. Opting Out
Google and Bing provide two ways to let you geo-target ads: by “opting in” to a geo-area, or “opting out” of it. For example, if you want to target Rochester, New York, you can either “opt in” by specifically targeting this city, or – using “opt out” – by targeting New York State, and excluding all areas except for Rochester. Anecdotal evidence using Google suggests that you’ll see lower CPCs by using the “op -out” method, although it’s not clear why exactly this occurs. Given that the differential can be significant, it’s best to test out which method provides the best results before allocating a significant amount of spend.

4. Start Small and Build Out
Because geo-targeting adds another variable to the already complicated mix of targeting parameters available to paid search marketers, it’s important that you and your team not be overwhelmed. Don’t try to break out the entire U.S. into DMAs in one fell swoop unless you’re really prepared to create thousands of custom landing pages and custom ad copy. Iinstead, it’s best to start small – with, say, 5 to 10 geographical markets you want to hypertarget – and then iterate, test, refine, and repeat. Once you’ve got the formula down, you can clone these campaigns for other regions, adding geo-specific parameters at that time.

5. Use Smart Geo-Databases
At Didit, we’ve seen considerable success using our own proprietary geo-database that integrates directly with the geo-targeting system provided by Google and Bing. We call our technology MAPS, and we’ve found that using it materially improves the performance of geo-targeted campaigns. For example, using MAPS in a recent campaign for Corel resulted in a 16 percent increase in ROI, a 144 increase in revenue, and a 204 percent increase in free trial sign-ups.

Geo-targeting, along with day-parting and segmentation by keyword, is one of the most powerful targeting levers provided by the search engines. You may or may not see major performance lifts in your localized campaigns, but don’t be discouraged if your first results aren’t stellar. Remember, in search, it’s the incremental improvements that you’ll make to your campaigns that will ultimately move you ahead of your competitors. So go forth and geo-target!

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