Google began determining a Quality Score per search for AdWords Ads in September of 2008. Prior to this time, a Quality Score was determined once and used across multiple searches. Determining Quality Score per search gave Google the opportunity to use geo-targeting. Learn what this means and how you can use it to your advantage.

Geo-targeting is when Google boosts an Ads Quality Score, thus giving it higher ad positions, traffic and CTR based on the geographic location of the advertisers. Google determines the geographic region of the consumer by checking his IP Address. Google must check the geographic region of the advertiser by the IP Address of the landing page. If both the consumer and advertiser are in the same geographic region, the advertisers ad will get a Quality Score boost.

Could geo-targeting hurt a nationwide or global campaign?

Potentially, yes. A nationwide or global campaign may face competition in metropolitan areas. If other advertisers in these metropolitan areas are deemed "local" merchants, they could get Quality Score boosts. This lowers the ad position of the nationwide or global advertiser. A lower position results in less clicks and less CTR. This damages the Quality Score further, resulting in lower positions and higher costs per click.

Is it good for the consumer?

One large appeal of the internet is to be able to view goods and service offered by merchants outside of a local area. If the internet offers no more diversification than driving around town, the internet is likely to some of it's appeal.

How can you use this to your advantage?

AdWords experts often recommend using a high cost per click for two or three weeks to get a high CTR. When a CTR becomes established, you can often lower the CPC bid with losing ad position because of the high CTR.

You could use a similar tactic with geo-targeting. You could limit your AdWords ad to run only in the geographic region where your hosting service is located. You would then get a Quality Score boost from the geo-targeting, result in higher ad positions. High ad positions translate to better CTR. Then after two or three weeks at a good CTR, you can allow you ad to running nationwide or globally while still reaping the benefits of a high CTR.

Also, you could have two identical or similar websites, one hosted on the East Coast of the United States and the other hosted on the West Coast. You could target your ads for specific regions, and send visitors to the correct website for their region. Perhaps more granularity is needed than just East Coast versus West Coast, but you get the idea.