The way we market our local businesses online is always evolving. One of the most notable changes recently, is the change to Google’s local “snack pack”, where the number of businesses which appear in local results has reduced from seven to three.

In light of this, many local businesses may focus more on pay-per-click advertising (PPC) if they want to regularly appear in search results.

However, when local businesses approach PPC advertising, they are often faced with the devastating combination of narrow target-audiences and highly competitive keywords. Many find their first experience with AdWords a negative one, with large amounts of wasted spend and a poor ROI.

Because of such experiences, many local businesses conclude that PPC is simply “not for them”.

However, once a more efficient targeting strategy is applied, the vast majority find PPC to be a profitable avenue to advertise their services/products, driving high quality leads/sales and generating a healthy ROI.

Whilst entire books could be written about PPC for local businesses, in this article I’ll be outlining the fundamental strategies to building an efficient local AdWords campaign.


Targeting your customers through local PPC

For any AdWords account, the key to a successful campaign is relevancy. Simply put, the more relevant your product/service is to the user’s search query, the better your ROI (for the AdWords geeks, I’ll leave out any discussion on quality score – for now!).

For local businesses, the immediate priority is to target the most relevant users – those that are looking for your service in your area.

In AdWords, there are two key ways of targeting locations in AdWords:

  1. Geo-Targeting (based on IP Addresses)

  1. Keyword Targeting (using a keyword modifier)

Many businesses will use one of these targeting methods in favour of the other. For example, targeting either US wide searches for “Plumbers in Oakland”, or rather Oakland searches for “Plumbers”.

Smart advertisers know that a combination of both targeting methods will help them to reach the most relevant users and provide the best ROI – after all, it does make sense. If a user is in your location, and searching for your service and location, then they are the most relevant user.

To continue the example, the advertiser’s primary target should be Oakland searches for “Oakland Plumbers”.


Budget application

Whilst this strategy will produce the best ROI, for many local businesses the result of such targeting means you’ll only be able to reach a small number of people – driving only minimal impressions and therefore very little revenue.

Local businesses may therefore be looking to expand their reach even further.

The 2 most common approaches local advertisers take in expanding their reach are:

  • Expanding the geo-targeting to include a broader area

  • Adding more generic keywords without location modifiers

However, taking either of these approaches dilutes the relevancy of the campaign as there is now a much wider target audience. Strategic application of the budget becomes impossible.

To combat this, the table below outlines a simplified account strategy (for a single product/service, in a single area) that will suit the vast majority of local businesses.

Google AdWords for local businesses

Budget can be applied methodically using this set up. This strategy will ensure that those searches with the highest ROI are targeted first, ensuring that your budget is applied effectively.

See below for a real-life comparison between the aforementioned campaigns over 1 month, where, for one of their services, this particular local-trade client enjoys a cost-per-lead that is approximately 80% cheaper using Geo/Keyword Targeting vs Geo Targeting alone.

Keyword tagging for local businesses

Impression share is able to be maximised for the first and second campaign, before applying any excess budget to the others. This delivers the best possible return for the local business’s budget – generating the highest number of leads at the lowest possible cost.


Advanced Location Targeting

The default location targeting option for any AdWords campaign is set to target those users who are not just in your location, but also searching for it. Whilst this works for some advertisers, particularly those in the travel industry, it will not be suitable for the majority of local businesses.

Navigating to Advanced Location Settings and changing it to “in my targeted location”, is the the better option. This will ensure you only show for the most relevant users in your geo-targeting campaigns.

Advanced Location Settings PPC

Once more, if you’re suffering from low impressions and/or want to expand your reach, then you can either create those “searching for” and “showing interest in” their own campaigns, or allow this targeting into one of the lower priority campaigns.

Proximity targeting

For many local businesses, the closer a user is to your service, the more likely they are to convert. For others, proximity has almost no effect within the target area. Local businesses should reflect the nuances of their particular sector in their targeting.

The chart below compares the conversion rates of two local businesses. Client A represents a local private dentist, whereas Client B is a double-glazing firm.

PPC conversion rate

For Client A, there is a direct link between distance and conversion rate. As the account is limited by budget, they can use gradient location bidding in order to bid higher for those users that are closer.

radius targeting ppc

This can be set up by radius targeting around your business address at the incremental distance you choose (note: Google does not sum these bid increases together, it will choose the highest locational bid adjustment to apply).

Granular targeting

If your business operates more like Client B, there is still room for granular location targeting that will improve your ROI. Even within small towns, different areas can convert differently to others.

For businesses that wish to target customers across their region, be sure to follow these steps to optimise your account:

  1. Review user location data in Analytics and find your best performing areas (for example, this might be a high average-income area)

  1. Similarly, review your customer database or offline records. What zip codes are driving the majority of your customers? Where should your ads be targeting as a priority?

  1. Use these insights and add bid adjustments where necessary. Ensure you’re targeting those crucial areas as a priority.

Additionally, if your business actively markets their products/services offline, it can pay dividends to synchronise your online activity with your offline. Sending out mailshots to a neighbouring town next week? Ensure you’re visible online in that area when they search for you by using bid adjustments.

(Note: In many cases, Google’s knowledge of IP locations is patchy at best. For some areas, broader location targets are better used to ensure capture of target traffic. Test the waters through trial and error; starting small and gradually expanding).

Review and improve

I’m sure that I don’t need to say that conversion tracking is essential for all online advertisers, especially local businesses. This means both the forms on your website, and call tracking too.

The advice in this article highlights the importance of a strategy that takes into account the intent of the audience you’re targeting. This likelihood of intent varies depending on the search terms they are using  and the location that they are in.

Larger local businesses that cover a wider area should target different areas in different campaigns, which will further allow a strategic application of budget, and make bid management much more efficient.

It is important to remember that the aforementioned advice applies to the vast majority of local business, though some will benefit from an alternative strategy.  Remember, you know your business best, and your strategy should reflect that.

Above all, pay-per-click advertising is unique in the vast quantity of data it accumulates very quickly. Consistently reviewing account performance, and the use of actionable data is the only route to AdWords success for a local business.


Liam Wade is the Paid Marketing Manager at digital agency Impression. He is knowledgeable about paid marketing methods across a variety of platforms & prides himself on taking an innovative, data-driven approach to PPC. Liam is one of 15 team members at Impression, which delivers digital marketing campaigns to a wide range of clients covering SEO, PPC, digital PR, content marketing and website design and development. Follow Impression on Twitter or here on LinkedIn.


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