One of the fastest ways to lose money in Google Ads? Bad location targeting.
Whether you’re a local service business, a multi-city brand, or even running nationwide, chances are you’re showing ads to people outside your true service area — or worse, to people who will never convert.
Location targeting is often set once and forgotten. But just because your ads are technically showing in the right city doesn’t mean your money is going to the right zip codes, neighborhoods, or device locations.
In this guide, you’ll learn how to audit your location targeting in Google Ads to identify waste, improve lead quality, and stretch your ad budget where it actually matters.
📍 Location Targeting: The Basics (and What Most Get Wrong)
In Google Ads, you can target:
- Countries
- States or provinces
- Cities
- ZIP codes or postal codes
- Custom radius around an address
You can also choose to:
- Target people in or regularly in your locations
- Exclude locations where you don’t want your ads to show
Seems simple — but the default settings often create major blind spots.
🧠 Why Most Advertisers Waste Money on Location Targeting
Let’s look at common mistakes that lead to wasted spend:
❌ 1. Targeting Too Broadly
If you target “New York City,” your ads may show in:
- Brooklyn
- Manhattan
- The Bronx
- Queens
That’s fine — unless you only service Manhattan and can’t handle leads from other boroughs. Suddenly, you’re paying for clicks you can’t even service.
❌ 2. Relying Only on Radius Targeting
Radius targeting seems convenient — but it doesn’t account for:
- Real-world geography (e.g., rivers, highways)
- Zip code boundaries
- Cities with high commuter traffic (people who are near your area but not your target customer)
❌ 3. Not Using Location Exclusions
Even if you target a city, Google may show ads to users who express interest in that location — even if they’re nowhere near it.
If you don’t explicitly exclude surrounding regions, you might be paying for traffic from 30+ miles away.
❌ 4. Overlooking the “Presence or Interest” Setting
By default, Google shows ads to:
“People in, regularly in, or who’ve shown interest in your location”
That includes tourists, researchers, or people planning to move there. While this might work for some campaigns, it’s disastrous for location-sensitive services like:
- Local plumbers
- Real estate agents
- Home service businesses
🧠 Inside my Google Ads Masterclass, I teach how to flip this setting and stop wasting money on ghost leads from outside your service area.
🔍 How to Audit Location Targeting (Step by Step)
✅ 1. Check Geographic Performance in Google Ads
- Go to your campaign
- Click “Locations” > “Geographic report”
- Select “User location” (not “Matched location”)
This shows where the actual user was physically located when they clicked your ad.
What to look for:
- Are you getting clicks from states or regions you don’t serve?
- Is your cost per conversion higher in certain cities?
- Are clicks coming from outside your targeted radius?
Filter by cost, conversions, and CPA to identify high-spend, low-performance areas to cut.
✅ 2. Use Zip Code-Level Data (If Available)
- Download the location performance report
- Look for outlier zip codes: low conversions, high CPCs, or no activity
- Consider excluding zip codes that consistently burn budget without results
If zip code targeting isn’t available in your industry, use radius or city-level exclusions to approximate.
✅ 3. Review “Search Terms” for Geo-Relevance
Sometimes users outside your area will type your city into the query (e.g., “plumber in Scottsdale AZ”), which still triggers your ads.
Look at your search term reports:
- Do you see people searching from other cities or states?
- Are they adding qualifiers like “remote” or “near me” from locations you don’t serve?
Add negative keywords based on geo-irrelevant searches.
✅ 4. Check GA4 Location Reporting
In Google Analytics 4, go to:
Reports → User → Demographics → Location
This helps validate where users are coming from and how engaged they are once they land.
You can compare:
- Bounce rate
- Time on site
- Pages per session
- Conversion behavior
Some zip codes might generate a lot of clicks — but almost zero conversions. That’s wasted budget.
✂️ What to Cut, Keep, and Adjust
CUT:
- Regions with no conversions and high cost
- Zip codes with frequent junk leads
- Areas that you don’t serve or that are out of delivery/service zones
KEEP:
- High-converting zip codes or neighborhoods
- Areas with consistent return users or strong engagement in GA4
ADJUST:
- Use bid modifiers for underperforming but not-quite-excludable locations
- Expand radius or region if data shows good conversion volume just outside your core area
🧰 Pro Tips for Better Geo Targeting
- ✅ Switch to “Presence” Only (People in your target area) for most service-based businesses
- ✅ Use layered exclusions — even inside a city
- ✅ Run split campaigns by region if you serve multiple cities or states — this allows for separate budgets and messaging
- ✅ Refresh geo audits monthly — new regions may emerge as high or low performers over time
🔍 I cover the full method for location auditing and geo bid strategy in my Google Ads Masterclass, including how to build scalable campaigns across multiple service areas.
🚀 Final Thought: Local Spend Should Stay Local
Every dollar you spend should bring you closer to a qualified customer. But if you’re paying for clicks from out-of-area users, low-value zip codes, or people who never convert, you’re not just wasting budget — you’re weakening your entire campaign’s efficiency.
Audit your location targeting often. Use data to guide what stays and what gets cut. And remember: bigger isn’t always better — better is better.
💡 Want help dialing in location strategy without overcomplicating your structure? Learn how to build lean, high-converting campaigns in the Google Ads Masterclass.
