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15 Benefits and Drawbacks of Google AdWords Zip Code Targeting

White Shark Media

12 years ago

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How would you like to be able to target customers based on their precise location? If you have a very good idea as to who your target market is, or even in what geographical areas your customers are located, then this is your lucky day!

In early 2012, Google AdWords launched a new option/feature to include zip codes to best target specific areas. For the moment, this option will only be available for the US market and will allow advertisers to target the nation’s 30,000 various zip codes.

As you can see in the snapshot below, you can add the zip codes in Locations and Languages on the AdWords Settings tab. You can add up to a thousand zip codes at a time.

15 benefits zip code 1

 

This new type of targeting tool is very helpful for many industries, but especially for local businesses trying to reach their neighboring Clients can enjoy the benefits earned from zip code targeting.

Recently, there has been a great increase in smartphone usage as people rely more heavily on such devices to conduct online research, price comparison shopping, and finally make purchasing decision when they’re on the run.

Therefore, having a local presence at that precise moment is key for your campaign’s success.

A couple of interesting statistics according to Google reflect that:

    • More than 20% of all searches on Google are related to a specific geolocation.
    • 88% of smartphone users, who tend to search for local information, take action within 24 hours.

Based on those impressive numbers, we can see the enormous potential that zip code targeting could have for search engine marketing campaigns.

Now let’s look at what could be some of the advantages and disadvantages of implementing this feature within your AdWords marketing campaigns.

The Main Benefits of Zip Code Targeting Include:

    1. Better control over your advertising budget – If you wanted to, you could actually create a new campaign to target just one zip code and assign a specific budget for it.
    2. Segment your customers Based on your customers’ zip codes, you could segment your markets by income level, social class, ethnicity and design ads with products or services that are more relevant to their needs and wants (wealthy neighborhoods vs. poorer neighborhoods).
    3. More locally relevant ads. With zip code targeting, you could create highly specific ads, which can help to better target local and mobile campaigns.
    4. Promotions for zip codes. With this feature you could create specific promotions for each zip code if need be.
    5. Exclude Zip Codes. You can exclude specific zip codes where you don’t want your ads to appear. This can be effective if you know that a certain part of a county is very loyal to a local brick-and-mortar store, and you don’t have the resources to engage in that level of competition.
    6. Stop spending on traditional media! Before zip code targeting was introduced and you wanted to target specific zip codes, you usually needed to implement some sort of traditional media publicity. But with zip code targeting, you can add that budget to PPC advertising, which is laser-targeted and will increase your overall advertising returns.
    7. Dynamic insertion of a location into a text ad. As you can see in the image below, by inserting this code appropriately: {lb.city:Local}, you could dynamically create new text ads to specifically target individual zip codes.

15 benefits zip code 2

Drawbacks of Zip Code Targeting Could Include:

    1. Limiting the reach of your campaigns – Zip code targeting provides laser-precise targeting but will reduce the reach of your campaigns. If you’re not careful when setting up the actual zip codes, you might leave out important geographical areas in marketing your business.
    2. Not available for AdWords Editor yet – Google says the next Editor update will include the zip code targeting feature, but for the moment, it is not yet available.
    3. Might not be too practical for some businesses – If you have multiple national campaigns running with a broad reach, zip code targeting may then not be for you. In these cases, Google recommends supplementing your national or regional campaigns with local zip code-level campaigns. Of course, this would take more work to set up and manage these additional campaigns.
    4. Currently zip code targeting does not work outside the US – For the moment, if you manage international campaigns, zip code targeting is not available.
    5. It’s a time consuming process. First you would need to decide which areas you want to target, then look up the zip codes and finally plug them into AdWords.
    6. You need to have excellent knowledge of where your potential customers reside. Getting so granular can prove to be a double-edged sword. It can help you if you choose the right zip codes, but it can hurt your campaign if you leave out areas where you could gain new customers for your business.
    7. Increased optimizing complexity – If you really take advantage of Zip Code targeting, you might end up with several versions of the same AdWords campaign. This will make optimizing multiple campaigns a more complicated and tedious process.
    8. Might lose sight of the big picture – By focusing on such granular details, such as zip code targeting, you run the risk of losing sight of the big picture and overall goal of your marketing efforts.

It’s time to design new strategies and test it out on your campaigns.

Zip code targeting is still a relatively new feature in Google AdWords and there is not a wealth of data or information on its reported performance, but it looks very promising and could help your local marketing efforts.

If you’re familiar with what Google calls the Zero Moment of Truth, or (ZMOT), which is the exact deciding moment when customers go online to search for information on a product or service and make a purchasing decision. Zip code targeting could improve your chances of reaching your local customers at this Zero Moment of Truth.

Ultimately, it depends on your business industry and marketing strategy to determine if zip code targeting is right for you. If you are targeting a local area, and think you can benefit of targeting selected zip codes more precisely, then I would highly recommend you to try it out.

Just make sure that you have the appropriate search volume to support a new campaign. If your current campaign is getting 100 clicks a month by targeting what equals to 10 zip codes, then you won’t see much return on your time spent by dividing the campaign into 10 smaller more focused campaigns.

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