Is Geo Modification Worthless?

This week we received the following question from a local business:

Am I wrong in thinking it is worthless to specify your city in a keyword combination?

For example, “plumbers dallas” has a really competitive PPC rate, it is very expensive.  But it seems to me that “plumbers” by itself would be just as effective, because Google is going to present local results to users whether they specify their city or not.  Also, you specify in your campaign what region you want it displayed in.  So, it would seem to me that paying for “plumbers dallas” would be a waste in an AdWords campaign.

Considering the constant evolution in Google’s geo-targeting capabilities, this is an excellent question. The best way to answer it is to look at the result pages for those keywords.

“Plumbers”

Plumbers Search Results Page

“Plumbers” Results – Click to enlarge

The results page for Plumbers (with Dallas, TX set as the geography) has a good set of advertisers that have taken advantage of geo-targeting. The top results all include sitelink extensions and are very relevant to the search intent.  Considering the explicit money-off offers present in two of the ads, these should be highly competitive and convert well. However, let’s see what happens to Ben Franklin Plumbing if we search for “plumbers dallas”.

“Plumbers Dallas”

Plumbers Dallas Search Results Page

“Plumbers Dallas” Results – Click to enlarge

Any user could decide to add their geography to a search. By not having a competitive ad set up for geo-modified terms, Ben Franklin Plumbing has lost their top-three spot to Aramendia Plumbing. This may be driven by the point made by our local business owner. Perhaps these keywords are just too expensive, and this advertiser decided it wasn’t worth paying for higher placement. It may also be driven by the way their ads have performed in this auction. Regardless of their reasoning, all three of the top advertisers chose to compete in both the geo-modified and geo-targeted spaces.

Is it Worth It?

Based on the results we’re seeing from the competition, at the very least they seem to believe it’s worth it to run both geo-targeted and geo-modified keyword campaigns. As for whether or not it’s worth it for your business, only you can make that determination.

It’s best to start out by running both kinds of campaigns and looking at your return on investment. If the cost of running ads in the higher-CPC auction outweighs the additional revenue you bring in, then it’s best to focus your spending in the lower-CPC auction. Otherwise, you’ll want to run both even if the margins are a bit thinner in the more competitive auctions. Quite often, you’ll find that you can’t make up the volume you’ve lost by focusing entirely on one method of targeting users within a geography.

Let us know what you think!