Google’s default location targeting setting will show your ads to people outside your service area. Most businesses don’t know this. Here’s how to fix it.
This is one of the first things I check in every account audit, and it’s wrong more often than it should be.
What Is Google Ads Location Targeting?
Location targeting tells Google where to show your ads — by country, state, city, zip code, or radius around a point.
For a local service business, you want ads showing to people in your service area. Simple. But Google’s default settings don’t actually do that as cleanly as you’d expect.
What’s Wrong With Google’s Default Location Targeting?
The default location targeting setting is: People in, regularly in, or who’ve shown interest in your targeted locations.
That last part — ‘shown interest in’ — is what creates problems. It means someone in a different city who searched for your location (maybe they’re planning to move there, or they’re visiting) can see your ads.
For most local service businesses, this is waste. You can’t serve someone who lives 200 miles away because they searched for a plumber in your city.
How Do You Fix Google Ads Location Targeting?
Go to your campaign settings → Locations → Location Options.
Change the setting from ‘Presence or interest’ to ‘Presence: People in or regularly in your targeted locations.’
This single change restricts your ads to people who are actually in your service area — not people who’ve shown interest from somewhere else.
Do this for every campaign. It’s not the default for some reason, despite being the correct setting for almost every local business.
Should You Target by City, Zip Code, or Radius?
Depends on your business:
City targeting works well if your service area aligns with city boundaries. Easy to set up and understand.
Zip code targeting gives you more precision, especially useful if you serve some parts of a metro area but not others. More setup work but more control.
Radius targeting is useful for businesses where service area is literally distance-based — you serve anyone within 30 miles of your location. Set radius from your business address or service hub.
How Do You Know If Location Targeting Is Wasting Your Budget?
In your Google Ads account, go to Campaigns → Locations. This shows you how your campaigns are performing by location — including locations you’re not specifically targeting (from the ‘shown interest in’ leak).
Look for spend in geographic areas outside your service area. If you’re a Denver HVAC company and you’re spending $300/month on impressions from people in Colorado Springs — even a small amount — that’s budget that should be serving your actual market.
Advanced: Using Location Bid Adjustments
Once your campaigns are running, you can analyze performance by location and set bid adjustments to spend more in high-converting areas and less in low-converting ones.
If certain zip codes or cities within your service area convert at 2x the rate of others, bid up on those areas. If a portion of your service area consistently produces low-quality leads, bid down or exclude it.
This optimization compounds over time — budget flows increasingly toward your best-performing areas as you gather data.