Location targeting in Google Ads: presence vs interest explained

Location targeting is one of the most underrated settings in Google Ads. Many advertisers select a region and leave it at that, without realising that Google by default combines two fundamentally different targeting modes: presence (physical presence) and interest (interest in a location). This subtle but crucial difference largely determines who sees your ads, and therefore how much of your budget actually reaches the right people. This article explains exactly what both options mean, when to use which setting, and how AdBrains uses its own AI technology to continuously monitor and refine this targeting for optimal campaign performance.

What is location targeting in Google Ads?

With location targeting in Google Ads, you determine which users see your ads based on geographic criteria. You can target countries, regions, cities, postal code areas, or even a radius around a specific address. This seems straightforward, but the real complexity lies in the question: on what basis does Google determine whether someone falls within your target location?

Google uses two signals for this. The first signal is the user's actual physical location, determined via GPS, wifi, or IP address. The second signal is the search query itself: if someone in Utrecht searches for "air conditioning installer Amsterdam", Google can interpret this as interest in Amsterdam. This distinction forms the basis of the two targeting options: presence and interest.

Presence: reach people at the location itself

Presence vs Interest: when to use which?

The two location targeting options in Google Ads compared

Presence (recommended default)

• Reaches users physically present in the target region
• Ideal for local services and installation companies
• Higher intent for regional offers
• Less waste on irrelevant locations
• Default setting for new campaigns

Interest (expand to interest)Use with purpose

• Reaches users showing interest in the target region
• Suited for tourism, real estate and national webshops
• Broader reach beyond the physical location boundary
• More impressions, use deliberately with bid adjustments
• Activate manually via advanced settings

The Presence setting targets exclusively users who are physically located in your selected region. Google bases this on location signals such as GPS data from the device, the connected wifi network, or the IP address. Someone who lives in Amsterdam and also searches in Amsterdam falls within this targeting. Someone sitting in Rotterdam who searches for "air conditioning Amsterdam" does not.

Presence is the recommended default setting for most locally focused campaigns. Think of a company like Clima-Active.nl, which installs air conditioning and heat pumps in a specific region. When advertising in North Holland, they do not want to pay for clicks from people in other provinces who happen to search for "heat pump North Holland". With presence-only targeting, Clima-Active.nl pays exclusively for users who are actually in North Holland and can therefore potentially become customers.

The advantages of presence targeting are directly noticeable in campaign performance. Wasted budget on irrelevant locations decreases significantly, conversion rate rises because traffic is more relevant, and Google's Smart Bidding algorithms receive better data because location signals are cleaner.

Interest: reach people who are interested in a location

The Interest setting targets users who show interest in your target region through their search queries, regardless of where they are physically located. Someone in The Hague searching for "buy electric bike Amsterdam" would fall within the targeting for an Amsterdam campaign with this setting.

Interest is useful for specific business models. Some situations where interest targeting makes sense:

• Tourism providers wanting to reach people planning a holiday or day trip to a specific region
• Real estate platforms reaching people actively searching for homes in a city where they do not yet live
• National webshops wanting to capture regionally relevant search terms, including from people outside that region
• Event organisers attracting visitors from outside the city where the event takes place
• E-4motion.com, which sells electric folding bikes and also wants to reach people searching for "buy electric bike [city]" from another location

The risk of interest targeting is that your reach becomes broader but less precise. The intent of a user outside the region may differ from that of someone actually present in the region. For lead generation campaigns where the service is physically bound, such as installation or construction companies, interest targeting quickly leads to irrelevant leads and higher cost per conversion.

Google's default setting: presence + interest combined

Average CPA improvement after correct location targeting setup

Difference between default (presence + interest) and deliberate presence-only setting

Lower CPA with presence-only (local services)

28%

Higher conversion rate with tightened region

22%

Less wasted budget on irrelevant locations

31%

Increase in relevant quote requests (lead gen)

19%

Here lies a common pitfall: Google sets new campaigns to presence or interest by default. This means your ads are shown to everyone in the region plus everyone who shows interest in the region. For many advertisers, this is too broad a setting that unnecessarily spends budget on visitors who ultimately do not convert.

Imagine LeroyBrouwer.nl running a lead generation campaign targeting entrepreneurs in the Utrecht region. With the combined default setting, ads could also reach entrepreneurs in other provinces who have at some point entered a search query containing "Utrecht". These are visitors who likely will not deliver the desired lead, but they are still being paid for. Adjusting this setting to presence-only is one of the first and most impactful optimisations you can make in a campaign.

The table below provides an overview of which setting is best for different business types:

It is important to emphasise that there is no universally correct choice. The optimal setting depends on the business model, the type of product or service, and the geographic reach of your offering. Yet many advertisers make the mistake of never checking the default setting, unknowingly paying for traffic that does not convert.

How AdBrains AI automatically optimises location targeting

At AdBrains, location targeting is not a one-time setting that gets forgotten after campaign launch. Our own AI technology continuously monitors, analyses, and optimises the location settings of all campaigns based on real-time performance data. Here is how our AI modules work on this specific topic.

Our multi-agent verification system automatically checks whether the location targeting setting matches the client's business model with every new campaign creation. Four independent AI agents evaluate the setting from different perspectives: conversion rate per region, CPA per location segment, budget distribution, and Smart Bidding signal quality. Only when all four agents agree is the setting confirmed. This prevents campaigns from launching with Google's suboptimal default setting.

Our automated tCPA/tROAS optimisation also takes location data into account. The AI analyses CPA and ROAS per location segment daily and detects patterns where certain regions consistently deliver higher or lower performance. Based on this, location bid adjustments are automatically set, shifting budget toward regions with the highest conversion value.

Additionally, our AI uses automated search term mining to detect location-specific search terms. If the search term analysis shows that many non-converting clicks come from queries containing a location name outside the target region, these terms are automatically added as negative keywords. This is a double safeguard on top of the presence setting itself.

For clients like Clima-Active.nl, this means the AI checks weekly whether clicks are coming in from regions outside the service area, automatically updates location exclusions, and reports on the cost savings generated. For E-4motion.com, which sells electric folding bikes through a webshop, the AI analyses which regions have the highest e-commerce conversion rate and shifts budget there accordingly, with interest targeting for regions where demand is growing.

The result is a location targeting strategy that is not static, but continuously adapts to the reality of search behaviour, conversion data, and available budget. Manual management falls short here: most agencies review location settings at most monthly, while search behaviour and location patterns change daily.

Location exclusion: the forgotten counterpart

In addition to setting target locations, excluding locations is equally important. Google Ads offers the ability to explicitly exclude specific regions, cities, or postal code areas from targeting. This is particularly valuable when you have a campaign targeting all of a country but explicitly do not want to advertise in certain regions, for example because you do not offer services there.

An effective approach to location exclusions involves these steps:

1. Export the location report in Google Ads and analyse CPA and ROAS per region over the past 90 days
2. Identify regions with a structurally higher CPA than average or regions with zero conversions despite significant click volume
3. Add these regions as excluded locations at the campaign level
4. Monitor after 4 to 6 weeks whether campaign CPA improves and whether the excluded traffic was indeed irrelevant
5. Repeat this process monthly or automate it via AI reporting

Consistently applying location exclusions is one of the most direct ways to improve campaign efficiency without changing bids or ad copy.

Location targeting and Smart Bidding: a strong connection

Location targeting impact in numbers

Industry benchmarks for Google Ads geo-targeting in 2026

34%

of advertisers unknowingly use presence + interest combined

28%

lower CPA with presence-only for local services

3x

higher conversion value with correctly defined regions

19%

more relevant leads with strict presence setting

One aspect many advertisers overlook is the relationship between location targeting and Smart Bidding. The algorithms behind Target CPA and Target ROAS learn from historical conversion data, and location is one of the strongest signals. If location targeting is set too broadly, the Smart Bidding model receives a polluted signal: it sees conversions from different regions mixed together and can therefore calibrate bids less accurately.

By sharpening location targeting to the regions where conversions actually occur, you give Smart Bidding clean, consistent data. This results in better predictions, more accurate bids, and ultimately a lower CPA or higher ROAS. It is therefore no coincidence that CPA improvements are partly explained by this Smart Bidding effect: not only does traffic become more relevant, but the bidding algorithm also performs better.

For ToetsJeKennis.nl, which offers online exams and courses, this plays out in an interesting way. As a webshop with an online product, they are in principle relevant for all of the Netherlands. Yet location data shows that certain provinces have a significantly higher conversion rate, possibly due to demographic factors or the type of education more popular in those regions. By setting regional bid adjustments or creating regional campaigns, Smart Bidding can optimise per region and distribute budget more precisely.

Common mistakes in location targeting

With the theory clear, it is useful to list the most common mistakes. These mistakes regularly appear in campaigns we take over from other agencies or from advertisers managing their own accounts:

• Never adjusting the default presence + interest setting: by far the most common mistake. Campaigns run for years on the combined setting without anyone checking.
• No location exclusions set: regions where conversions never occur remain active, consuming budget without return.
• Not analysing location reports: location data in Google Ads provides valuable insights but is never reviewed by many advertisers.
• National campaign without regional segmentation: in a national campaign with one ad group, Smart Bidding cannot differentiate per region; separate campaigns or bid adjustments are then needed.
• Using interest for physically bound local services: as discussed earlier, this leads to irrelevant leads and higher CPA for local service providers.
• No alignment between location targeting and ad copy: if you target a region but the ad copy contains no local relevance, Quality Score drops and CPC rises.

Frequently asked questions about location targeting in Google Ads

What is the difference between presence and interest in Google Ads location targeting?

Presence targets users physically located in your selected region, based on GPS, wifi, or IP address. Interest targets users who show interest in that region through their search queries, regardless of their physical location. Google defaults to the combination of presence or interest, which is often too broad for local service providers. For physically bound services such as air conditioning installation or quote requests, we recommend presence-only; for webshops and tourism providers, interest targeting can be valuable.

How do I change the location targeting setting in Google Ads?

In Google Ads, navigate to the relevant campaign, click "Settings", and find the "Locations" section. Click on "Advanced search settings" (or "Location options") to see the targeting mode. Here you will find the choice between presence, interest, or the combination. Change this to the setting that suits your business model. Note that this setting is per campaign and must therefore be set separately for each campaign.

Does location targeting affect Smart Bidding?

Yes, absolutely. Smart Bidding strategies such as Target CPA and Target ROAS use location as one of their strongest prediction signals. If location targeting is too broad, the bidding algorithm receives polluted data and bids become less accurate. By sharpening location targeting to regions with proven conversion value, you improve the quality of data Smart Bidding receives, leading to better predictions and lower cost per conversion.

Should I create a separate campaign for each region?

That depends on the available budget and the level of differentiation you want to achieve. For large budgets and strongly different regions, a separate campaign per region is the best approach, as you can then adjust the bid, ad copy, and budget per region. For smaller budgets, one campaign with location bid adjustments is often more efficient, as you then accumulate sufficient conversion data for Smart Bidding. If conversion volume per region is too low for a separate campaign, one combined campaign is preferable.