Quick Answer: If your Google Ads campaign is generating leads or clicks from locations you're not targeting, the most likely cause is the default location targeting setting: "People in, or who've shown interest in, your targeted locations." The "shown interest" clause is the problem -- it lets Google show your ads to people anywhere in the world who have searched for content related to your target location. Fix it by switching to "People in or regularly in your targeted locations" only.
The Setting Most Advertisers Never Change
When you set location targeting in Google Ads, you choose a geographic area -- a city, region, radius, or country. What most advertisers don't realize is that there's a second setting underneath that choice that determines what "targeting" actually means.
Google offers two options:
- Presence or interest: People in, or who've shown interest in, your targeted locations
- Presence only: People in or regularly in your targeted locations
The default is "Presence or interest."
The "interest" clause is the problem. If someone in another state -- or another country -- has recently searched for content related to your target location, Google considers them a valid audience for your campaign. A person in the UK who searched "plumbers in Chicago" last week can see your Chicago plumber ad. They're never going to call you. But they can click your ad, fill out your form, and show up in your leads report with a ZIP code you don't recognize.
This is how you end up with leads from states you've never served and budget spent on traffic from countries that aren't in your target area.
Who This Hurts Most
This setting is especially damaging for:
Local service businesses. If you're a plumber, HVAC company, or roofer serving a specific metro, you need leads from people who are actually there. A lead from someone in another state is completely worthless -- it costs you the click, potentially costs your intake team time, and counts as a conversion if your tracking is set up to fire on form submissions.
Lead gen campaigns with tight geographic requirements. B2B companies targeting a specific region, healthcare providers limited to a licensed service area, financial advisors with state-by-state compliance requirements -- all of these need actual presence, not "interest."
PMax campaigns. Performance Max uses the same location targeting setting, but its distribution across Display, YouTube, and Discover makes the "interest" clause hit harder. More channels means more surfaces where someone who searched for location-related content can see your ad.
The Evidence It's Happening
Check your geographic report in Google Ads. Go to Insights & Reports > Geographic Report, and look at the "User location" column -- not "Location of interest." If you're seeing spend in geographies you didn't intend to target, the presence-or-interest setting is what's letting them in.
Also check your lead records directly. Pull ZIP codes from form submissions and cross-reference against your service area. If you're getting leads with ZIP codes from other states, that's the setting causing it.
In one account running PMax for a Pennsylvania business, the advertiser "got leads with ZIP codes from other states" and spent significant time documenting cases to submit to Google for a refund -- ultimately getting back about $100 for significant wasted spend. The fix would have taken 30 seconds to implement at campaign setup.
How to Fix It
In Google Ads:
- Go to your campaign settings
- Click on "Locations"
- Below your location targeting, click "Location options"
- Under "Target," switch from "Presence or interest" to "Presence: People in or regularly in your targeted locations"
Do this for every campaign in your account. The setting is campaign-level, so you'll need to check each one separately.
For Performance Max campaigns, the setting is in the same campaign settings area. Go to "More settings" if you don't see it immediately.
What "Regularly In" Means
The "presence" option says "People in or regularly in your targeted locations." The "regularly in" clause handles travelers and commuters -- someone who lives in the suburbs but commutes to your target city, or someone currently traveling who will be in your service area soon.
This is a reasonable inclusion. The "interest" clause is the one you want to remove. Someone who is present in or regularly travels through your area is a potential customer. Someone in a different country who once searched for content about your area is not.
After You Fix It, Audit Your Conversion Tracking
If you've been running with the default setting for a while, your conversion data includes out-of-area submissions. That means your smart bidding algorithm has been learning from signals that include these junk leads. After fixing the location setting, give the campaign four to six weeks to retrain on cleaner data.
If you're running offline conversion tracking and only importing qualified leads, this retraining happens naturally -- the algorithm will see that out-of-area form fills don't come back as conversions, and it will deprioritize the signals that led to them. If you're still using on-site form fill events as your primary conversion action, you'll want to combine the location fix with a conversion signal cleanup.
FAQs
I set my location targeting to a specific city. How is Google showing my ads outside that city?
The "presence or interest" default allows Google to serve your ads to anyone who has shown interest in your target location, regardless of where they actually are. The city you chose defines the geographic interest category, not the physical boundary of where your ads show.
Will switching to "presence only" reduce my traffic significantly?
It depends on your category and location. For service businesses in major markets, the impact on volume is usually small -- most of your traffic is coming from people who are actually there. For businesses in tourist destinations or locations that attract a lot of research from out-of-area users, the volume reduction may be more noticeable. Any volume reduction should be accompanied by a corresponding improvement in lead quality.
Does this setting affect Performance Max campaigns?
Yes. The location targeting setting and location options apply to Performance Max in the same way they apply to Search and Display campaigns. Given that PMax runs across more channels, fixing this setting in PMax can have an even larger impact on out-of-area traffic.
I just noticed this on a campaign that's been running for a year. How do I assess the damage?
Pull your geographic report filtered to "User location" (not "location of interest") for the past 12 months. Total the spend on locations outside your service area. That's the budget that went to clicks from people who were never going to become customers. Then check your conversion data from those locations -- if any converted, those events have been training your bidding algorithm on the wrong signals.