The Google Ads Location Targeting Setting Most Businesses Get Wrong
This is one of the least glamorous settings in Google Ads and one of the most expensive to get wrong, because it doesn't show up as an obvious problem — it just shows up as a slightly worse cost-per-lead nobody can quite explain. 💖 Click-through rate looks normal, cost-per-click looks normal, and yet a meaningful chunk of budget goes to people who were never going to walk through the door, because they're not actually in the service area at all.
What most businesses get wrong
For a long time, "Presence or interest" was effectively default behaviour in many accounts, and location-bound businesses have simply never gone looking for the setting to change it. The logic makes sense for some advertisers — a tourism board genuinely wants to reach people researching a destination from anywhere. But for a business that only serves people physically within an area, that same setting means someone searching "[service] + [suburb]" from interstate can trigger and click your ad. You pay for the click either way.
- In Google Ads, open the campaign and go to Settings.
- Click into Locations, then find Location options (sometimes under an expandable "Advanced search" link).
- Look at the Target setting — it'll show either "Presence" or "Presence or interest."
- For a business that only serves people physically in your area, change it to "Presence: People in or regularly in your targeted locations."
- Repeat for every active campaign — it's set per campaign, not account-wide.
- For Performance Max, the same choice lives under its own location settings too — don't assume it inherited the fix from Search.
Mistakes to avoid
- Assuming the default is already the tight one — it varies, so check, don't assume.
- Fixing only your newest campaign and leaving older, still-active campaigns on the loose setting.
- Pairing a wide service radius with the loose setting, compounding the wasted spend.
- Forgetting to recheck Performance Max, which has its own location settings separate from Search.
- Never revisiting this after expanding or shrinking your actual service area.
Frequently asked questions
Will fixing this setting eliminate all wasted ad spend?
No — honest nuance: this fixes one specific leak, not every source of waste. Keyword match types, negatives and audience targeting all affect efficiency too, but this one is commonly overlooked and easy to check.
Is there ever a good reason to use "Presence or interest"?
Yes — for businesses that genuinely want to reach anyone researching a location regardless of where they are, like tourism or national services. It's the wrong default for a business with a physical service radius, not a wrong setting in every context.
Does this apply to all campaign types, or just Search?
Search, Display and Performance Max each have their own location settings, so a fix in one doesn't carry over to another. Shopping and video have their own variations worth checking too.
How do we know if this has actually been costing us money?
Pull the geographic "where ads showed" report for the last few months before changing anything, and look at how much spend came from outside your real service area — that gives you a before number to compare against.
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