How SMBs Can Take Advantage of Location in Paid Search Campaigns

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Paid search should be a perfect fit for local merchants. After all, consumers are frequently looking for local businesses online, and paid search campaigns put merchants at the top of results. But brick-and-mortar stores haven’t been as eager to jump on board, even as self-serve platforms like Google AdWords continue to rise in popularity among national brands and retailers. According to survey by BIA/Kelsey, the average SMB retailer is only spending around $700 on paid search each year, while annual advertising budgets are running at an average of $17,000.

One theory is that brick-and-mortar merchants haven’t been as successful with paid search because they aren’t taking advantage of location targeting capabilities. “Targeting through paid campaigns is much too broad without the use of specific location based targeting,” says Ivy Lustig of Marketing Mojo, a digital agency. “In order for you to reach your audience, you need to ensure that you are only targeting a location where your business can cover the need.”

Here are eight way that local merchants can take better advantage of location targeting in their paid search campaigns.

1. Find zip codes with the highest conversion rates. “The biggest role that location should play in paid search campaigns is targeting specific users in an area. Having a geo-location option helps a business lead traffic to specific pages of its site, or even custom made pages, which should be optimized to have those users convert. Businesses that put in research into their target market can know what zip codes or cities have the highest likelihood for conversion, and then they can specifically target their messages on these pages to apply only to these specific visitors.” (Nenad Cuk, ThoughtLab)

2. Target multiple locations. “Be prepared to target multiple locations when setting up paid search ads. That might mean targeting several towns, neighborhoods, or suburbs that comprise the region you do business in. Unlike in broadcast ads—where ‘Greater Louisville’ or ‘Chicago’s Northside’ offer a broad impression of the area you cover—with search advertising, you’re often targeting a very specific user intent.” (Michael Heiligenstein, Fit Small Business)

3. Consider your industry. “How you use location in your paid search campaigns is completely dependent on the type of business you’re running. For example, a pizza restaurant would want to set location targeting to only their delivery area, while a hardwood flooring installation company might choose to show ads in their city and surrounding areas. Location targeting should help show ads only to those who would be able to use your service instead of wasting spend on those outside your service area.” (Brian Stumbaugh, Barefoot Solutions)

4. Focus on searchers in a 5-mile radius. “The best option a merchant can make use of is radius location targeting. Google Adwords will allow a merchant to set up radius location targeting around their store location. One option that has worked very well for my clients is setting up a variety of radius location targeting around each of their store locations starting at 2 miles, then 5 miles, 10 miles, and so forth until we stopped at a 30 mile radius. Then we ran the paid search campaigns for a few weeks to see how each radius location performed. We found that the 5-mile radius had the most conversions for the lowest cost. Because of this, we were able to bid higher on the better performing radius locations and bid down on the lower performing ones.” (Ivy Lustig, Marketing Mojo)

5. Use geo-bid adjustments on mobile ads. “Brick and mortar stores should also focus on mobile ads with a geo-bid adjustment to get the attention of potential customers that are close by. A geo-bid adjustment is when you identify a specific geographic area where you want to bid a different max CPC bid than the rest of your targeted area. If your max CPC is normally $1, you can set a 10% adjustment that will automatically bid $1.10 when someone is in your specified geo area. Bid adjustments can range from -100% up to +100%. A store can target people on a smartphone who are searching for their products in that store’s neighborhood with a higher bid, or target their competition’s neighborhood more aggressively.” (Mel Cagle, Anvil)

6. Experiment with extensions. “Using location extension in AdWords, you can set up more than one radius around your business so when potential customers either search while they are physically within that radius, or search for a location that is within that radius, your ad can appear. Try not to target a too-small radius because the result may be that your ads appear intermittently or practically not at all. Also, experiment with extensions on your ad. Call extensions allow the searcher to call you directly, review extensions show reviews, and seller ratings will show star reviews.” (Wences Garcia, MarketGoo)

7. Create separate campaigns for generic keywords. “When location is of importance to a business, that business should consider creating separate PPC campaigns for generic keywords, with no location in the keyword, adding negative keywords for targeted locations at the campaign level, and making sure to augment campaign settings so that you only target people in your targeted location. They should also create campaigns for geo-targeted keywords—keywords that include the city, state, zip, in the keyword search. This structure affords more control to the advertiser. This method does require active management of negative keywords since the goal is to funnel all generic search queries into one campaign and all geo-location search queries into another.” (Nathan Pabich, Digital Third Coast)

8. Use KPIs to select account optimizations. “Depending on the amount of data you have on your current customers, local merchants may be forced to launch paid search campaigns with a wide reach within your serviceable area. All account optimizations, like geographic location settings, should be informed by your predefined Key Performance Indicators (KPIs). These are the metrics you decide to measure and base adjustments on within your account. These can include phone calls, form completions, newsletter subscriptions, coupon redemptions, and purchases.” (Brian Chausmer, Iterate Marketing)

Stephanie Miles is a senior editor at Street Fight.

Interviews have been edited for length and clarity.

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.