If you operate at a local level, and all of your customers are within your local market, then it makes no sense to advertise nationally. You will just waste your money. In this instance, it makes much more sense to concentrate your budget on your home market. The major search engines each have a way for you to specify that your ads should only be shown on Web browsers that are located within specific markets.

If you operate on a regional basis, then you should specify only geographic markets that are within the region you service. One decision is if you should combine all of your markets into the same campaign or run a separate campaign for each one. The single campaign option is quicker, but you have more control and will generate better data with separate campaigns.

For instance, it might turn out that there are certain geographic markets that are much more profitable than others. In this case, you would generate a higher ROI by focusing your budget on the more profitable markets. The only way to do that is to have separate campaigns running for each market.

The same holds true for those marketing on a nationwide basis. The problem here is that maintaining a separate campaign for each market could result in an unrealistically high number of campaigns. A better option here might be to set up larger geographic markets that encompass several cities or even states. This will still allow you to generate geographic performance data. You just might have to work harder to extrapolate that data.

In Google, there is another advantage to geographic targeting, and that is that Google paid search listings display the market name if an ad has been specifically targeted for that market. For instance, if I run ads in a campaign targeted to Tennessee, Google users in Tennessee who see my ad will see the word "Tennessee" beneath the ad copy. This points out that I am an advertiser specifically advertising to people in Tennessee, rather than a nationwide advertiser. This could help with clicks and conversions.

Another way to target your campaigns is by day of week or time of day. If you are in an industry with abundant keyword inventory, then this might be an excellent targeting strategy for you. It may be the case that during business hours you are competing against many other advertisers, which is driving click costs up past the point of profitability. In this instance, it might be a good move to try only running your ads during non-peak hours. You may find that you can still buy plenty of traffic, but that traffic may cost much less on a per-click basis.

Or maybe there are certain days of the week that are more profitable. If you can generate reports showing your account performance at different times and on different days, then this might give you the data you need to make these kinds of decisions. Otherwise, you will have to test your ads at different times to compare performance.

Targeting can help make your pay per click campaigns much more effective. Although it takes some time generate and analyze the data you need, it is an important part of the process of maximizing your paid search return on investment.