To target specific searchers with a PPC campaign, marketers give geotargeting the nod as their most effective tactic. MarketingSherpa’s 2009 Search Marketing Benchmark Guide says that 89% of marketers believe geotargeting delivers high (49%) or medium (40%) ROI.

Targeting PPC campaigns to a group of searchers within a city, metropolitan area, or state isn’t only useful to marketers with a physical location in that area. Ecommerce sites or other national search advertisers also can use geotargeting to optimize their overall search strategy. They can shift resources to regions that deliver the best performing traffic or highlight brands in search ads based on regional popularity.

The technique helped Adam Hanin, CEO, National Jeans Company, develop a comprehensive search marketing strategy. His strategy included geotargeting to advertise the most popular apparel brands in major metropolitan areas that delivered high traffic and conversions.

“When we saw where the orders were coming from, we made a conscious decision about spending resources where we could recapture them in terms of sales,” says Hanin.

Compared to Hanin’s national search campaigns, those geotargeted ad groups have delivered:
o 83% higher CTRs
o 25.4% lower CPCs
o 30.4% lower cost per conversion

Those results helped Hanin and his search agency win the 2008 DMA International Echo Award for search marketing.

Here are the top five strategies Hanin and his team used for their geotargeting campaigns:

Strategy #1. Analyze search activity and sales results to target high-volume regions

Hanin and his team built their geotargeting campaigns on data from their national search campaigns. They analyzed PPC campaign results, Web analytics reports and back-end sales data to pinpoint specific states or municipal areas that delivered the most traffic and conversions.

In particular, they examined:

- Geographic sources of high search volume

That process identified five regions that accounted for 15% of traffic from national search campaigns, such as:
o New York City metropolitan area
o Washington, D.C. metro area
o Los Angeles
o Michigan (Ann Arbor, Detroit, Southfield, Troy)

- Conversion trends for brand terms and other keywords by region.

After identifying high-volume search regions, the team examined which keywords and brand names resulted in the highest conversion rates for each location. For example, one brand, Hard Tail, was particularly popular with Michigan searchers.

- Regional trends for keywords based on search engines.

The team compared search activity from Google, MSN and Yahoo! to determine which brand names and keywords were most popular with users of those search engines. They also looked for concentrations of users from different regions for each search engine.

Strategy #2. Develop custom keyword lists for geotargeted campaigns

The goal of geotargeting is to optimize conversions from a specific region. That means you must develop customized keyword lists that focus on the most popular and relevant search terms from each region.

Beginning with the keyword list for national search campaigns, Hanin’s team monitored performance of specific brands names and terms from that region. Apparel brand keywords were added or subtracted from the list based on performance.

They tested using geographic terms in their keyword lists, such as the term “Michigan” for search phrases in ads targeting that state. Adding the term, however, did not influence results – most likely because shoppers intended to buy online.

In some instances, they added corporate brand terms, such as “National Jean Company” to keyword lists in regions served by retail stores. For example, when the company opened two new brick-and-mortar locations in Ohio, the team added company-specific keywords in campaigns aimed at that state. They wanted to capitalize on media coverage of those store openings.

Strategy #3. Customize search ad copy for regional relevance

Attracting customers from a specific region requires marketers to do more than filter out search activity based on IP address location. You must also provide them with advertising copy that helps create a local connection.

The team created regional-specific ad copy that could be dynamically served to searchers based on their IP address, such as:
o “Be Boston Chic with Clothes from National Jean Company.”
o “The Streets of NYC demand you look your best. So Low can help.”
o “Show off your New England body the right way with Hard Tail. Buy Today.”

They also changed the URLs displayed with ad results to reflect the user’s location. For example, a searcher from Bethesda would see “www.nationaljeancompany/Bethesda”

If the region also featured a physical store, the team could include a local business ad that displayed the retail spot. It implied to search engine users that they were working with a local company.

Strategy #4. Base bidding strategy on campaign goals

Geotargeted search ads typically offer lower minimum bids and lower costs per click. Those lower costs, however, don’t mean marketers can be less rigorous about setting bids against a potential return on that investment. Here’s how Hanin’s team managed bidding for geotargeted campaigns:

- New, geotargeted ad groups were started at close to minimum bid levels.

- The team tracked metrics, such as impressions, clicks and ad position, to determine whether bids needed to be adjusted to increase traffic.

- They measured the results of that traffic (conversion rate and average sale) to determine whether the bid and CPC for each keyword correlated to their ROI goals.

Strategy #5. Strike balance between geotargeted and national campaigns based on goals/returns

Decide how much of your PPC budget to spend on geotargeted campaigns by determining what role those ad groups will play in your overall strategy, such as:
o Capitalizing on strong existing customer activity
o Standing out from competitors with more relevant ad copy
o Promoting products in specific markets through special offers

Then, measure those campaigns against the same ROI metric by which you rate all of your PCC campaigns.

Hanin’s team set a goal for all of their PPC campaigns to deliver a three-to-one return on advertising spend (ROAS). For campaigns that met their goals, the team could carefully increase spending with an eye on maintaining that ROAS ratio.

Finally, move slowly when implementing geotargeted campaigns as a part of your search strategy. Begin by testing one or two regional campaigns at a time; you don’t want to harm your overall search results. As a geotargeted ad group demonstrates its effectiveness, you can move on to a new region or increase spending in those areas to maximize results.

“Wherever we see success for returns hitting those numbers, we’ll apply more resources from a financial perspective,” says Hanin. “It’s been an important part, but it’s only one part of a big overall program we have in place.”

Useful links related to this article.

Creative Sample from National Jean Company's Geotargeted PPC Campaigns:
http://www.marketingsherpa.com/cs/nationaljean/study.ht
l

SearchAdNetwork manages PPC campaigns for National Jean Company:
http://www.searchadnetwork.com/

Instructions for geotargeting with Google AdWords:
http://adwords.google.com/support/bin/topic.py?topic=21

Instructions for geotargeting with Yahoo! Search Marketing:
http://help.yahoo.com/l/us/yahoo/ysm/sps/screenref/1647
.html

Introduction to geotargeting from Microsoft adCenter:
http://advertising.microsoft.com/GeoTargeting

National Jean Company
http://www.nationaljeancompany.com