It is simple to turn on Google AdWords and never bother with location targeting but you may be throwing money away. If you run a physical business, think about where your customers are coming from. If your company ships products, where can you send them? Even if you sell something digital like music or ebooks, they are probably more interesting to some people and less interesting to others. You are not going to pay to show a commercial on Chinese TV if you have a restaurant in Omaha, so why are you doing that with Google Ads?
Luckily, AdWords includes options for location targeting. You can select countries, states, cities, even individual zip codes. Keep in mind, though, that this location is based on where the person using the computer is, not where they may live. This can be an advantage; if you are a downtown restaurant delivering lunch to office workers, you can just target an ad to the area where you deliver food, not the entire metro area. On the other hand, the reverse can also be true. Home improvement stores in the suburbs might want ads that reach people who work downtown and are searching for drills at work. When running geographical targeting, imagine a person who you want to see your ad. Does “Bob” live in outside your city and commute to work downtown? Then set your ads to reach him in both places.
If you combine geographic targeting and scheduling, this can get incredibly specific. One New Jersey political campaign realized that many people in New Jersey work in New York City. Of course, though, people who live in New York can’t vote in New Jersey, so this campaign setup ads during the workday targeting New York City and turned them off at 6 PM, when many office workers went home to New Jersey. Using locational targeting and setting times for ads allows you to make the most of your spending.
For more tips on running AdWords campaigns, check out AdWords University: The Complete Guide to AdWords.