PPC Optimization: ZIP Code Targeting

For PPC campaigns that target a specific geographic location, there are a number of ways to optimize conversion rates. You can target different household incomes, business areas and universities, genders, age groups, and ZIP codes. Based on the performance of each individual demographic and location, you can adjust your bids to improve conversion rates to squeeze more leads out of your AdWords spend. This article shows how to add ZIP code targeting to your PPC campaigns to boost conversion rates.

PPC Location Targeting

To target by ZIP code in Google Adwords select a campaign, and select Settings -> Locations. Next to the red “add locations” button select View Location Reports -> What triggered your ad (geographic) (see Figure 1).

Figure 1: Location Reporting by Geography

You can view location reports with 12 different types of locations, including congressional district, postal code, and neighborhoods. Select View -> Postal Code from the drop-down menu (see Figure 2).

Figure 2: Location Reporting by Postal Code

AdWords then lists the postal code performance in your campaign’s geographic area (see Figure 3). Review the different ZIP codes to see which popular ones have higher conversion rates than the campaign’s average. In this campaign, ZIP codes 48104 and 48105 have higher than average conversion rates and many conversions. These ZIP codes and the other high performance ones are candidates for positive bid adjustments.

Figure 3: Location Reporting by Postal Code before Bid Adjustment

Adding ZIP Codes to Locations

Now that you know the high performing ZIP codes, let’s add the ZIP codes to target. Go to Settings -> Locations and click on the + Locations red button. Click on the “Advanced search” link (see Figure 4). In the “enter a location to target or exclude” enter the ZIP codes you want to target. In this case we entered all the ZIP codes in Washtenaw County Michigan (an Ann Arbor campaign for a Taxi service).

Figure 4: Location Targeting Advanced

Now we are ready to set bid adjustments for our high performing ZIP codes (see Figure 5). Click on the bid adjustment for a high performing ZIP code and adjust your bid (in this case we bumped up the bids by 10% for ZIP code 48104).

Figure 5: Setting a Bid Adjustment

View Locations After Bid Adjustments

After our bid adjustments the locations screen looks like Figure 6. We’ve found that positive bid adjustments on higher performing locations tend to increase the overall conversion rate more consistently than negative bid adjustments on lower performing locations. A bid adjustment of 10% is a good place to start (5% is too small to make a large difference in conversion rates).

Figure 6: Locations after Bid Adjustments

Results After Optimizing Bid Adjustments on ZIP Codes

After adjusting the bids on the higher performing ZIP codes over the last few months the overall conversion rate improved. From August to October 2016 the conversion rate improved from 78.9% to 82.4% in October, an improvement of 4.4%.

Figure 7: Growth in PPC Conversion Rate after ZIP Code Optimization

Conclusion

Google continues to add more ways to optimize the performance of AdWords campaigns. Location targeting using ZIP codes is a good way to boost the conversion rate of your geographically based campaigns. By tweaking the bids on high performing ZIP codes we were able to boost the overall conversion rate by 4.4%.