National vs. Local Geo-Targeting: Which SEM Strategy is Best?
Effectively geo-targeting SEM campaigns is one of those arcane questions with an answer that never satisfies. There may be a precedent to go off of, or a thousand of them, but it feels like a leap of faith anyway. That’s because, of the thousands of people who have tried to answer this question before you, not one of them were wrestling with circumstances exactly identical to yours.
Best practices are notoriously unclear when confounded by a swarm of variables that ensure that no two cases are alike. So, even though it’s all been done before, there’s no one best approach. The ever-unsatisfying answer to the question of how best to geo-target your SEM campaigns? It depends.
It depends on your business model and your audience, on the size of your program and its level of automation. It depends on your resource constraints, on your budget constraints, and countless other things.
The goal of this article is to demystify all of those dependencies, to show you that others have indeed tried this before, and ultimately, help you toward a reliably satisfying answer to the question of how best to geo-target your SEM campaigns.
Types of Geo-Targeting
There are two primary schools of thought for geo-targeting SEM campaigns:
National Geo-Targeting (One Extreme):
Campaigns are only grouped by segments other than location (i.e. product line, device type, network, brand, match type, etc). All campaigns target the entire coverage area in which ads are served.
Local Geo-Targeting (The Other Extreme):
Location is one of the segments by which campaigns are grouped. Each campaign only targets a subset of the total coverage area of your business. For this reason, multiple identical campaigns are required to cover that total area, which means lots of duplicative keywords. Campaigns may still be further subdivided by additional segments (i.e. product line, device type, network, brand, etc).
Little Bit o’ Both (Not Extreme):
As with most everything, not only is there always a middle ground, but that middle ground is almost always where the answer lies. Perhaps you want to have separate campaigns for each metro area in the US, but nationally-targeted campaigns abroad? Or perhaps you want to have metro-segmented campaigns everywhere in addition to national campaigns as catch-alls for what Google can’t attribute to a metro? Perhaps you even want special campaigns only for certain critical categories in certain critical business hubs, like raincoats in Seattle or tailors in DC? Blending national and local targeting allows you to form-fit your program to the diverse reality of your business.
The combinations are endless — which makes the choice between them all the more complicated.
Simple. It’s one of those words that means one thing and could mean the opposite, depending on the context in which it’s used. In that sense, national targeting is simple. Here are some of the ways in which it’s beneficial to your program:
- Easy: Take your time-savings and go someplace else because this one’s the easiest, both to set up and to maintain. Minimize (often read “optimize”) the number of campaigns you have to manage.
- Exclusive: No risk of pesky cannibalization due to overlapping geographies. (Note: in most other usages, the word “pesky” sells short the act of cannibalization.)
- Exhaustive: You don’t have to concern yourself much with learning the tedious idiosyncrasies of Google & Bing location attribution, nor suffer by their limitations. Your ads are served everywhere you want them, not just where Google or Bing can pinpoint traffic.
So far, the benefits of national targeting have appealed mostly to the lazy or, as we call ourselves, the opportunity cost-conscious. These last couple benefits are fun for the chronic fiddlers, too:
- Bid Optimization: Despite the summary targeting, bidding can still be optimized at the lowest level you have patience for. The only requirement is that your campaigns also target that level. For instance, you might have a national campaign that targets the entire US by way of targeting each and every one of its 50 states (perhaps in addition to a catch-all US target). Then, you can set bid adjustments to modify for the performance divergence between New Hampshire and Vermont, for example. Put simply, if optimized correctly, a nationally targeted campaign structure poses no downside to bid optimization. In fact, if you have a bid management platform that automates location bidding, this type of optimization can be very successful.
And lastly, but importantly…
- Data Abundance: Because they’re not sliced-and-diced across a hundred different locations, each campaign and every keyword within it rack up a hundred times more data. Regarding bid management platforms, the prerequisite to good automation is always significant data volume. For those without bid management platforms, the same is true for old fashioned human decision-making — the more inputs and outputs you have to go off of, the better you can set the right inputs for the best output.
The disadvantages of national geo-targeting – the ways in which its simplicity is a drawback – are best shown by an examination of its alternative.
Local targeting is more complicated. And that complexity has its own pros and cons, that represents an inverse to the simplicity of national targeting. Here are the pros:
- Targeted Ad Copy: Trying to get people to come to your lemonade stand in Alaska is made all the easier when people don’t need jet engines to get there. The same is true of your SEM campaigns. If you know your audience is in one place, you can target your campaigns to that one place. And then you can tell them about it in your ad copy, ensuring that only aching Bostonians will see your ad for “Massage Therapists in Boston,” and making them more likely to click when they do. This works especially well for anything in the “near me” category, but not so well for certain business types that aren’t as geographically-dependent. There does exist a (rather elegant) workaround to this within a national targeting schema, but local targeting is expressly built for specialized ad copy.
- Targeted Landing Pages: Pairing excellently with targeted ad copy are targeted landing pages, in two important ways. First, they make for a unified journey along a customized funnel, which translates to higher conversion rates. The only reason the aching Bostonian is more likely to click on an ad relevant to her location is because she expects that the landing page she subsequently visits will be similarly relevant. And if she lands on a menu of Massachusettsan masseuses, she’s more likely to convert too. Second, relevance is a key determinant of your ads’ Quality Scores. The more thematically consistent your ads are with your landing pages, the better your Quality Scores. The better your Quality Scores, the lower your CPCs. Compounded with the higher conversion rates, this means you pay less for more.
- Budget Control: On top of the stack of increased controls is the ability to manage your budget by location. In the case of national targeting, you can decide how your total spend is apportioned using location bid adjustments, but not how much spend should be allocated to each place. Because national campaigns share budgets across areas, it’s a zero sum game: any budget increase in one area is balanced by an equal net decrease to the other areas. If instead you want to increase budgets in some areas without influencing budgets everywhere else, you need market-level campaigns.
Those increased levers, however, must be weighed against these familiar complications of any highly-segmented program:
- Difficulty: With control comes labor. There’s a lot of upfront work and a lot of upkeep after that, which is a far cry from the margarita sippin’ stroll of national targeting. Local targeting is most advisable if you have an SEM team, a dedicated SEM manager or too many friends.
- Data Scarcity: Just as national targeting means a glut of data for every campaign, local targeting risks the opposite. If I have 100 clicks and five conversions for a single national keyword, you can probably feel pretty confident that its conversion rate is 5%, and optimize it accordingly. If instead, you have that same keyword broken out across ten different geographies, each of those keywords might now only have a total of 10 clicks. Half of those ten keywords have no conversions on their 10 clicks. Does that mean their conversion rates are 0.0%? More likely, it just means that you now need 10 times more information in order to achieve the same level of bidding confidence.
National vs. Local Geo-Targeting – In Summary
National and local targeting both are viable strategies, but paramount to which one you choose is understanding why you’re choosing it. If you know your business model and your goals, your constraints and your markets, then you’re 90% of the way to your version of success. Perhaps your business is inextricable from the places in which it operates, and added complexity could lead to richer relationships with your users. Or perhaps a simpler approach is warranted, giving you the high-ground vantage point to better acclimate to those users’ behaviors. In either case, successful geo-targeting is the scaffolding from which you lay these patterns of interaction with your diverse users, and the foundation to a thriving, pumping SEM program.