There is a default setting in Google Ads that causes many local businesses to show their ads outside their intended target area, sometimes nationally, sometimes internationally. It's been there for years, it's easy to miss during campaign setup, and it quietly wastes budget on people who will never buy from you.
The setting is called "Location options," and the default value is "Presence or interest." Understanding what that means, and why it matters, is one of the quickest wins you can get from a Google Ads audit.
I check this in every audit I do, and I find it misconfigured in the majority of local business accounts. The most striking recent example was a driving instructor in Bangor spending £350 a month, with 22% of that going to clicks from outside Wales entirely. One setting change and a handful of location exclusions redirected that £77 a month to people who could actually book lessons.
People assume Google will do the sensible thing and target their local area when they type it in. It won't, not by default. Google's default prioritises reach over precision, which suits Google's revenue model a lot more than it suits your budget.
What "Presence or Interest" actually means
When you set a target location in Google Ads, you might assume your ads only show to people physically in that location. That's not what the default setting does.
"Presence or interest" means Google shows your ad to anyone it believes is interested in your target location, even if they're nowhere near it. Google determines "interest" based on signals like recent searches, browsing history, and location data. Someone in London searching "things to do in Llandudno" might trigger ads from a Llandudno restaurant. Someone in Germany researching a holiday in North Wales might see ads from local businesses that only serve that area.
For a national e-commerce business, this can sometimes be useful. People researching a destination might genuinely purchase online before travelling. For the vast majority of local service businesses, a plumber, a solicitor, a dentist, a letting agent, it's just waste. The person is not in your area and cannot become a customer.
How to fix it: switching to "Presence Only"
The fix is straightforward. In your Google Ads campaign settings, look for the Locations section and expand "Location options." Change the setting from "Presence or interest" to "Presence: People in or regularly in your targeted locations."
This restricts your ads to people Google believes are physically in your target area, based on their IP address and device location. It's not perfect, no targeting is, but it is significantly more precise than the default.
Do this for every campaign where you're targeting a specific geographic area. It takes about 30 seconds per campaign and the impact on budget efficiency can be immediate.
Checking where your ads are actually showing
Even with the correct location setting, it's worth verifying where your spend is actually going. The geographic report in Google Ads (Campaigns > Insights & reports > Geographic report) shows the actual locations of people who saw and clicked your ads.
Run this report with a 90-day date range. Look for any spend in locations outside your target area. You'll often find some. Google's location detection isn't perfect, and some out-of-area impressions will slip through regardless of your settings.
For any location you find spending without converting that sits outside your service area, add it as a location exclusion. Go to the Locations tab in your campaign, click the exclude option, and search for the location to exclude. You can exclude at country, region, city, or postcode level.
The "Regularly In" clause and when it matters
The "Presence" setting includes people who are "regularly in" your targeted location, not just physically there at the time of the search. This covers people who commute to the area, have a second home there, or frequently visit for business.
For most local businesses, this is a useful inclusion. Someone who commutes into Wrexham five days a week is a plausible customer for a Wrexham-based business even if they're searching from home. But it does mean a small amount of out-of-area impressions will still occur.
If you find this is causing meaningful waste, common in rural areas where "regularly in" pulls in a wider net, you can test radius targeting instead of region targeting. Setting a radius around your business location rather than targeting a named area gives more precise geographic control.
What this looks like in practice
A local business running ads with the default "Presence or interest" setting will often find, when they check the geographic report, that 10–25% of their spend is going on searches from outside their target area. For a campaign spending £1,000 per month, that's potentially £100–250 per month reaching people who cannot become customers.
The fix, changing the location setting and adding exclusions for out-of-area locations, costs nothing and takes under an hour. It's one of the first things I check in any account audit because the payoff-to-effort ratio is as good as anything in Google Ads management. Most of the North Wales businesses I work with have this set incorrectly when I first look at their accounts, and the geographic report usually tells an immediate story about where the budget has been going.
Google Ads management in North Wales. If you'd like a free audit, I'll check your location settings and show you exactly where your budget is going.
