Stop Wasting Money: Google Ads Location Targeting Guide

One of the most common and expensive mistakes I see people make with Google Ads is thinking that not setting a location target means their ads will be shown cheaply across the globe. You think you're casting a wide net, but what you're actually doing is asking Google to find the fastest way to burn your cash. It’s a complete myth that this approach saves money. In fact, it's probably the quickest way to guarantee a high cost per click with absolutley nothing to show for it.

When you leave location targeting wide open, Google’s algorithm doesn't just sprinkle your ads evenly everywhere. It uses its own signals—IP address, search history, Google account data—to decide where to show your ad. And where does it usually decide? In the most competitive, highest-cost markets on the planet, like the United States, the UK, and Australia. The system is designed to spend your budget where it thinks it'll get clicks with commercial intent, and those places have a massive amount of competition, which drives up the price you pay for every single click.

So if you're looking at your high ad costs and scratching your head, this is almost certainly the reason why. You’ve accidentally entered the most expensive auction rooms without even realising it.

So, Where is My Money Actually Going?

Let's get one thing straight: not all clicks are created equal. A click from someone in London is going to cost you a lot more than a click from someone in Manila. This isn't random; it's a direct reflection of the economic value and advertiser competition within that market. Advertisers are willing to pay more for a user in a country with higher disposable income, so the auction price goes up.

When you don't specify a location, you let Google’s algorithm make the choice for you. It sees your ad, sees your budget, and goes hunting for clicks. It knows that users in developed countries are generally more valuable to advertisers, so it pushes your ads there first. You might be selling a digital product available worldwide, but you'll find a massive chunk of your budget is being spent on traffic from just a handful of very expensive countries.

The difference in cost is staggering. You could be paying £3-£5 per click for a search in the US, while the same search from another country might only cost you £0.30. Without any controls, you're basically telling Google to spend your money in the most expensive way possible. It's no wonder your costs are through the roof. This isnt a theory, it's something we see time and time again in accounts we audit.

It's Not Just Clicks, It's the *Wrong* Clicks, Isn't It?

High click costs are only half the story. The real damage comes from paying a premium for traffic that has absolutely zero chance of ever converting. Let's say you run a service business that primarily serves UK clients. If 70% of your budget is being spent on clicks from the United States because you left your targeting open, you've just wasted 70% of your money. It doesn't matter how compelling your ad is; a user in California isn't going to hire a plumber from Cornwall.

This is what I call "empty traffic." Clicks from users who, for logistical, legal, or cultural reasons, can never become a customer. You're filling the top of your funnel with people who are guaranteed to fall out immediately. This not only wastes your ad spend but also messes up all your other metrics. Your conversion rate will be terrible, your quality score might suffer, and you'll conclude that "Google Ads doesn't work" when the real problem is a fundamental targeting error.

I’m reminded of a campaign we worked on for a medical job matching platform. They came to us with a cost per user acquisition of over £100 from their Google Ads campaigns. A huge part of the problem was exactly this—they were paying for expensive clicks from outside their core service area. Once we fixed their location targeting, among other optimisations, we were able to bring that cost down to just £7 per user. It just shows the massive impact that getting the right traffic can have.

Many businesses find they get good traffic that simply doesn't convert. To solve this, you need to understand how to fix underperforming campaigns that are burning cash. It often starts with looking at who is clicking your ads, not just what they're clicking. Think about how much of your budget could be going down the drain right now on clicks that can never, ever turn into revenue.

Right, How Do I Stop the Bleeding?

Okay, enough doom and gloom. The good news is this is one of the easiest and fastest problems to fix in Google Ads, and you'll see the impact almost immediately. The first step is to play defence. You need to stop the budget leaking out to irrelevant places.

Your first port of call is the Locations report within your Google Ads account. Go to 'Locations' on the left-hand menu, and then click on the 'Geographic report' tab. Set your date range to the last 30 days or so. This is where Google shows you the truth about where your clicks are *actually* coming from, down to the country, region, and sometimes even city. You'll probably see a list dominated by countries you don't serve or don't want to target.

Your job now is to be ruthless. Go through this list and identify every single country that is not your core market. Then, go to the 'Excluded' tab and add them all as negative locations. Don't be shy. If you only sell in the UK, exclude the entire world apart from the UK. This single action will force Google to stop showing your ads in those places, instantly cutting off the flow of expensive, irrelevant traffic. This process of identifying and cutting waste is the first step to fixing a campaign that's burning through your budget.

Should I Just Target the UK and Be Done With It?

This is where most people stop. They cut the waste, target only their home country, and call it a day. And while that's a massive improvement, it's not the smartest way to run your campaigns. You might be leaving a lot of money on the table. The real strategic shift is to move from targeting places to targeting *problems*.

Think about it. Is a potential customer in Berlin who is specifically searching for "software for UK VAT returns" less valuable than someone in Bristol vaguely searching for "accounting software"? I'd argue the person in Berlin is a far more qualified, high-intent lead. Their search query tells you everything you need to know: they have a UK-specific problem that you can solve. Their physical location is almost irrelevant.

This is where you use your keywords to do the heavy lifting of qualification. Instead of relying solely on Google's geographic targeting, you embed the location into your keywords. Create ad groups targeting terms like:

• "[your service] for UK businesses"
• "[your product] with shipping to London"
• "how to comply with [UK regulation]"
• "best [your category] in Scotland"

By doing this, you can open your targeting to a wider geographic area but only show ads to people whose search proves they are relevant to your business. It sounds counterintuitive, but you can run very effective campaigns by rethinking what 'no location targeting' actually means and letting your keywords filter for intent. The real shift in thinking is to focus on the user's problem, which often reveals their location intent far more accurately than just drawing a circle on a map. You'll often find these "international but intent-qualified" leads are cheaper to acquire and just as valuable as your domestic ones.

What About Those Little Toggles in the Campaign Settings?

Here's another critical detail that 90% of DIY advertisers get wrong. Inside your campaign settings, under the 'Locations' section, there's a little dropdown called 'Location options'. It has two choices, and the one Google sets as the default is, frankly, dangerous for most businesses.

The options are:

1. Presence or interest: (People in, regularly in, or who've shown interest in your targeted locations) - This is the default. It's also the reason your ad for a Manchester-based restaurant gets shown to someone in New York who was planning a trip to the UK six months ago and searched for "things to do in Manchester". They have shown 'interest', so Google includes them. For most businesses, especially local ones, this is a terrible setting that leads to massive waste. You end up paying for clicks from people who are physically unable to buy from you. The poor accuracy of this default setting is a common reason for high, unexplained ad spend.
2. Presence: (People in or regularly in your targeted locations) - This is the setting you almost always want. It tells Google to only show your ads to people who are physically located in the areas you're targeting. Simple. Clean. It removes all the ambiguity of 'interest' and gives you back control over who sees your ads.

Go and check this setting in all your campaigns right now. I'd be willing to bet it's on the default. Changing it to "Presence" is a five-second job that can save you a significant portion of your budget every month.

How Should I Structure My Campaigns Around This Idea?

Once you've got your defensive exclusions in place and your settings corrected, you can start building a more intelligent, proactive campaign structure. Instead of just one campaign targeting "the UK," you can create a tiered structure that gives you more control and allows you to bid differently based on the value of each market.

Here's a structure we often use for clients with a UK focus but international potential:

• Campaign 1: UK (Core Market)
  • Targeting: United Kingdom
  • Location Setting: Presence
  • Budget: Highest Allocation (e.g., 60% of total)
  • Bids: Most aggressive. This is your most valuable audience, so you're willing to pay more to capture them.
• Campaign 2: Tier 1 International (High-Value English Speaking)
  • Targeting: USA, Canada, Australia, Ireland, New Zealand
  • Location Setting: Presence
  • Budget: Medium Allocation (e.g., 25% of total)
  • Bids: More conservative than the UK campaign. You want this traffic, but you recognise it might not convert as well, so you pay less for it.
• Campaign 3: Intent-Based (Global Discovery)
  • Targeting: Worldwide
  • Exclusions: Exclude all countries from Campaign 1 & 2, plus your big list of irrelevant/low-value nations.
  • Location Setting: Presence or Interest (This is a rare case where 'Interest' can be useful for discovery)
  • Keywords: ONLY keywords with strong location qualifiers (e.g., "service for UK company," "product delivered to Britain"). No broad terms.
  • Budget: Smallest Allocation (e.g., 15% of total)
  • Bids: Lowest bids. This is an exploratory campaign to find pockets of high-intent users in unexpected places without risking a lot of money.

This approach gives you granular control. If you find your Tier 1 campaign is performing brilliantly, you can increase its budget. If the Intent campaign is just burning money, you can pause it without affecting your core market performance. We've found that structuring campaigns this way for broader audiences provides the perfect balance between focused spending and discovering new opportunities.

So, What's the Plan, Then?

Let's boil this all down into a simple, actionable plan you can implement this afternoon. Stop stressing about the high costs and start taking control of your account. This is the exact process we'd follow.

Following this plan is the core of our UK framework for stopping wasted Google Ads spend. It's not about complex algorithms; it's about common sense and being deliberate with your settings. If your campaigns are still struggling after this, you may need a more advanced troubleshooting guide to look at other factors like keywords and ad copy.

Feeling a Bit Overwhelmed?

Look, I get it. This can seem like a lot to take in, especially when you thought you were doing the right thing by trying to reach a wider audience. The devils in the detail with Google Ads, and these seemingly small settings and structural choices are what separate campaigns that make money from those that just burn it.

The value of getting an expert to look at your account isn't about them knowing some magic secret. It's about experience. It's about having seen hundreds of accounts like yours and knowing exactly where to look for the leaks. It's about quickly diagnosing the problem and implementing a strategy that's built on proven principles, not guesswork.

If you've read through this and you're still not sure where to start, or you want a second pair of expert eyes to confirm you're on the right track, then we offer a completely free, no-obligation consultation. We'll have a proper look through your campaigns with you, point out exactly where we think you can save money and improve perfomance, and give you some actionable advice you can take away and use immediately. There's no hard sell, just straightforward, honest advice.