Google Ads Location Targeting: How to Maximize ROI and Avoid Common Mistakes
Running a successful Google Ads campaign starts with targeting the right audience—and that begins with your location settings. Whether you’re working with a $500 budget or managing a multi-state campaign, how and where your ads show up can be the difference between a profitable month and a drained budget.
In this post, we’ll walk you through the fundamentals of Google Ads location targeting, the common mistakes to avoid, and how to optimize your campaign based on real data—not guesswork
Why Location Targeting Matters (Especially on a Budget)
Every click in Google Ads costs money. And if your budget is tight—say under $1,000/month—you can’t afford to waste it on low-performing areas.
Let’s say you’re targeting a metro area with 5 million people and your daily budget is $30. If your average cost-per-click is $5, that’s only six clicks per day. Now imagine those six clicks are scattered across the entire metro with no clear concentration. You’ll burn through your budget fast, without learning much about which areas actually drive conversions.
Instead, focus on smaller, more strategic zones. Then, as you gather data, you can scale into new territories.
Step-by-Step: How to Set Up Smart Location Targeting in Google Ads
- Open your campaign and go to Settings → Locations
- Click “Enter another location” → Advanced Search
- Start with your core service area (e.g., your city or ZIP codes where most customers come from)
- Use ZIP codes instead of broad city targets
- ZIPs give you finer control and help isolate top-performing pockets.
- Exclude non-relevant areas (like airports, industrial zones, or competitor-heavy regions)
- Use Radius targeting sparingly
- While easier, radius targeting can waste budget on low-interest areas unless you’re in a very dense, high-converting location.
Example: A Common Mistake in Manhattan
One business tried targeting all of Manhattan with a $1,000/month budget. That’s about 1.6 million people—and with high CPCs in New York, the client was getting spread thin fast.
Instead, we advised narrowing down to just 2–3 ZIP codes where they already had strong client volume. Not only did this make their ad spend more effective, but it also saved them time (and gas) by working within a tighter service area.
The Power of the 80/20 Rule in Google Ads
In nearly every campaign we run, 80% of conversions come from 20% of the locations. Once you identify those high-performing ZIP codes, double down.
Here’s what to do:
- Sort your locations by conversions and cost
- Pause locations with high spend and no conversions
- Remove ZIP codes that aren’t producing results
- Let Google reallocate that budget to better-performing areas
Over time, this simple pruning process can boost your conversion rate and lower your cost per lead.
Bonus Tip: Use “Presence” Targeting, Not Google’s Default
In your campaign’s Location Options, change the setting to:
People in or regularly in your targeted locations
Why? Because the default option allows people interested in your area (but not located there) to see your ad. This is how businesses in Minnesota end up paying for clicks from Florida.
How to Bulk Exclude Locations You Don’t Serve
Even with targeting set up correctly, rogue clicks can still slip through.
Here’s how to tighten things up:
- Go to Advanced Search → Add Locations in Bulk
- List the states or cities you don’t serve
- Click Exclude
- Hit Save
This step is especially helpful for local service businesses who never intend to work outside their region.
When to Expand Your Targeting
Once your core ZIP codes are converting well and your budget allows it, begin expanding by:
- Adding adjacent ZIP codes
- Layering in additional keywords
- Testing a slightly broader radius target
But only do this once your base area is performing profitably.
Common Pitfalls to Avoid
❌ Targeting the entire country on a $500–$700/month budget
Result: Dispersed data, high CPA, and no clear insight into what’s working.
✅ Instead: Start with your top 2–3 performing states or metro areas.
❌ Ignoring non-performing areas
Result: Money continues to flow into dead zones.
✅ Instead: Review performance weekly. Remove areas with high spend and low or no conversions.
❌ Forgetting to exclude non-service areas
Result: Paying for clicks in irrelevant or unreachable markets.
✅ Instead: Manually exclude out-of-scope locations—even entire states if necessary.
Location targeting isn’t just a setting—it’s a strategy. When done right, it’s one of the fastest ways to improve your campaign ROI, especially if you’re working with a smaller budget.
By focusing your spend on high-converting areas, cutting out waste, and adjusting your strategy based on data, you’ll stretch your budget further and get more qualified leads.
Don’t assume your ads are going where you think they are. Double-check the zip codes, location options, and exclusions regularly—especially in the first few weeks of a campaign.
PREFER TO LEAVE IT TO A PROFESSIONAL?
Running a home service business is already a full-time job—figuring out Google ads shouldn’t be another one. At Mancini Digital, we specialize in Google Ads that bring in real, high-intent customers, so you can focus on what you do best.