Improving ROI by implementing Geo Targeting

There has been a lot of talk about geo-targeting. Google recently announced a Geographic performance report that makes it easier to look at where your traffic is coming from. Efficient Frontier is able to provide reports with Geographic traffic and conversion rates for all pixel clients through its Analytics systems.

While implementing Geo-targeting it is important to understand the reasons for doing so. There are a few major reasons for implementing geo-targeting:

1. If your product or service is only available in certain geographic regions it is better to target those regions only to improve the quality of traffic. For example, if are a local car dealership you might want to only target ads to users in that metropolitan area or city.
2. Some advertisers have variations in conversion rates across different geographic regions. Splitting out traffic by region, helps advertisers bid differently in different regions based on conversion rates. So for example, if an advertiser had a higher conversion rate in California than in Texas for the same keyword, the advertiser could bid higher in California to get a higher average position (given the same cost). The map shown below shows a sample advertiser that has different conversion rates by state. The states in blue have the highest conversion rate while the states in yellow have the lowest. The advertiser could group states with similar conversion rates together to simplify campaign structure.
   
   
3. Geo targeting helps advertisers show localized ad copy. For some advertisers, it might makes sense to use localized ad copy. For example, saying "Find Low Rates in California" might have a higher Click-Through Rate than just saying "Find Low Rates".
   For some advertisers we have seen that implementing Geo-targeting has improved ROI by up to 25% by improving the quality of traffic and improving bidding efficiencies.