Google Ads location targeting decides who can see your ads based on where people are, where they regularly are, or which places they show interest in. For a local business, the safest setup is Presence targeting around the real service area, sensible exclusions, location assets linked to your Business Profile, and a monthly check of matched locations.
Most local owners set a city or a radius when they launch a campaign and never open their Google Ads location targeting settings again. That is where a surprising share of a small budget leaks. The settings below take an afternoon to fix, and they decide whether your ads reach the neighbor down the street or someone three states away reading about your town.
Google Ads location targeting starts with a default most owners never chose
Every new campaign starts with Presence or Interest switched on, and that default explains many of the out-of-area clicks local owners complain about. Google's help page says location targeting by default "includes both physical locations and locations of interest," reaching people in or regularly in your area plus people who have shown interest in it (Google Ads Help). Google's own example is a Paris bakery whose ads can reach people located in Paris, or anyone who has expressed interest in Paris bakeries, now or in the past.
Interest is a wide net. Google says it can infer a location of interest from terms in a search, past searches, a person's past physical locations, the content of a page where an ad appears, and searches on Google Maps (Google Ads Help). It also calls location targeting a best effort built on device, settings and behavior signals, and states that "100% accuracy is not guaranteed." A national retailer welcomes that reach. For a dental office or a pizza place with a delivery zone, Google Ads location targeting left on the default can spend part of a small budget on people who will never walk through the door. Our local business marketing programs start every paid search review at this one setting.
Presence vs Presence or Interest for local search ads
For most storefronts and service-area businesses, Presence is the better starting point for local search ads, and Google's guidance leaves room for that choice. Google recommends broad targeting as a best practice on Search, yet it also says to consider Presence when you want to reach only users in specific locations and leave out people elsewhere who are merely interested in what you sell (Google Ads Help). Under Google Ads location targeting, Presence reaches people who are likely to be located, or regularly located, in the places you target.
The case for the default rests on a narrow data point. Google reports that advertisers in Travel, Real Estate and Education who switched from Presence to Presence or Interest saw 5% more conversions on Search campaigns, based on its internal data from May 21 to June 1, 2022 (Google). Those are categories where people research a place before they arrive. A plumber, a salon or a neighborhood restaurant sells to people already nearby, so test Presence first and let conversion data argue for widening. Exclusions follow a simpler rule: they default to Presence, and Google no longer allows Presence or Interest exclusions in Search, Display, Performance Max and Shopping campaigns.
Google Ads radius targeting, ZIP codes and location exclusions
Google Ads radius targeting suits a business whose customers come from a rough circle around the shop, and Google sets a floor on how tight that circle can be. A radius must be at least 1 km around any location, and Google warns that a small radius or a very small area can make ads show "intermittently or not at all" because it misses targeting criteria (Google Ads Help). Google pitches radius targeting at businesses that deliver within a set distance, and areas within a country, which can mean regions, cities or postal codes depending on the country, at businesses that serve particular neighborhoods.
Service-area businesses often get cleaner control from postal codes that match the real service map, the same thinking behind the 20 service areas Google allows on a Business Profile (Google Business Profile Help), covered in our guide to service area business setup. Expect some spill at the edges. When you target an area, Google may also show ads in "nearby, closely related areas" that are too small or data-poor to target on their own, such as the suburbs around Portland in its example (Google). Exclusions are the part of Google Ads location targeting that trims those edges. If a place is both targeted and excluded, the exclusion wins, and you can add up to 1,000 exclusions at a time in bulk (Google Ads Help).
Location bid adjustments depend on your bid strategy
Location bid adjustments let a campaign pay more near the shop and less at the edges, and Smart Bidding sets them aside. Google allows location adjustments from -90% to +900% at the campaign level, and when two adjustments cover the same place only the most specific one applies, so +100% on a city overrides +50% on the region around it (Google Ads Help). Among automated strategies, Google's support table shows location adjustments working only with Maximize clicks. Target CPA, Target ROAS, Maximize conversions and Maximize conversion value set their own bids, and Performance Max campaigns take no bid adjustments at all.
Under Smart Bidding, the useful lever is campaign structure. Google suggests running a separate campaign for your best-performing areas so you can give them more budget and higher bids, and another for outlying areas using the same keywords at lower bids (Google Ads Help). For Google Ads location targeting at a local business, that usually means a core-area campaign and a wider campaign that has to earn its keep. Smart Bidding can only learn from the conversions you report, which is why feeding real outcomes back matters, a loop our guide to Google Ads lead quality walks through.
Location assets tie your ads to Google Business Profile
Location assets turn a standard search ad into a local search ad on Google Search and Maps, and they draw their details from your Business Profile. Google says ads with location assets can show your address, a map or the approximate distance to your store, and that location data is sourced from Google Maps and Business Profile; if a location is marked temporarily or permanently closed, its location asset stops showing (Google Ads Help). When people search for nearby businesses on Google or in the Maps app, those ads may feature your location at the top of local results (Google Ads Help).
October added a reason to check what your website says about offers. Google told some advertisers by email that, starting October 12, it would pull promotions such as coupons and deals from their websites into Search and Performance Max campaigns that have linked location assets and no promotion assets of their own, Search Engine Roundtable reported. The feature is on by default, and owners can switch it off under Automated Promotions in the account-level automated asset settings (Search Engine Roundtable). Google describes it as a feature that sources, validates and displays deals from your website and other sources (Google Ads Help), so any offer on the site is now a candidate for ad copy. Keep offers current in one place, the same discipline our guide to Google Business Profile posts recommends. Google is also rolling out a closed Business Home beta, reported October 22, that brings Business Profile, Merchant Center, YouTube and Ads accounts into one place (Search Engine Roundtable).
Checking Google Ads location targeting in the matched locations report
The Locations report shows whether Google Ads location targeting is doing what you set it to do. It has two views: Targeted locations, which shows performance by the places you chose, and Matched locations, which shows where ads appeared, whether that was a person's physical location or a location of interest (Google Ads Help). With location assets, a distance report also groups results by how far the triggering location was from your nearest business. Google's example is a store that sees its best conversion rate within 5 miles and uses radius targeting with location bid adjustments to raise bids for people physically inside that radius.
Read the report monthly and act on patterns. A steady run of clicks from towns you do not serve usually means Presence or Interest is still on, or a radius was drawn too wide. Rows marked "Unspecified" mean Google could not place the IP address, or the search covered several cities on Maps. Tighten, exclude or split campaigns, then give each change a few weeks of data before judging it, and pair it with the network controls in our guide to Google Ads channel prioritization. If you want a second set of eyes on your location settings, assets and automated promotions, talk to our local team.
