Increasing or Decreasing your targeting radius is a common reaction, that comes as a result of metrics that are good or bad. Knowing when to make the decision based on the results you're receiving can help your business reduce its overall cost to acquire a lead or purchase.
Increasing your campaign's targeting radius
There are two primary reasons the decision to increase the targeting radius of your ads should be made:
Your cost per conversion is low and you want to enable other potential customers to see your ad and convert. The best time to make this decision is when your cost per lead is lower than you anticipated or your ROI on product sales is above your accepted rate and you want to grow your business.
Your Google ads are not getting a lot of impressions, which means your budget is not being spent. If you operate within a niche industry your targeting radius will need to be larger so more potential searchers can see your ads.
Possible negative impacts of increasing your radius
If the decision has been made to increase the targeting radius for your business, you need to be aware that there are several potential negative impacts:
Increasing your radius on Facebook means more of your budget will be spent on people who are not interested in what you have to offer. This will already occur with your current radius, but the expansion means an even larger portion of your budget will be spent on showing your ads to people who are not interested. This is because Facebook charges per impression, unlike Google that charges per click.
2. Your service may fall outside of a distance most consumers are willing to travel. For example: a simple service like a haircut may only be a few km or miles, while for something more complex like a niche beauty service it could be 10km or miles depending on availability. Knowing what a reasonable distance to travel for the average consumer is vital
3. Sudden large expansions in radius will lead to a degradation of metrics. This is because Google and Facebook will need to re-learn who it should show ads to that are the most likely to become a lead or purchaser. The best thing to do is increase by 1-2km or miles every week.
Decreasing your campaign's targeting radius
There is one primary reason to ever decrease your targeting radius: Your cost per lead or purchase is high.
If your campaign is running and it is getting clicks, but no one is converting, or the conversion rate is very low (under 10%) a symptom may be that the targeting radius is too large.
In this case, it is best to decrease your radius by 10-25% and then looking at the metrics to see if they improve over the next 7 days. What you'll need to keep an eye on is a downward trend in the cost-per-acquisition.
If you do not have any acquisitions yet, then it is best to look at the keywords and ads you're deploying and see if improvements can be made there to increase the click-through-rate.
Facebook Radius Targeting
Depending on the location of your business, expanding your targeting by 2 times (in this example, from 5km to 10km) may increase the number of people who see your ads by 5 times or more. The best way to combat this is to decrease Facebook's age range and add detail targeting for people who are interested in similar services as your business.
Below is the same business as the images above, but with the inclusion of reduced age targeted and detail targeting added.
The impact of adding this targeting decreases the potential reach by 60% and ensures everyone seeing your ad has interests in something similar to your business.
Detail targeting may or may not be available for your industry depending on the service or product you provide. Example: If you run a physiotherapy clinic, there is no interest for "chronic pain" available. You would need to keep your targeting broad and give Facebook enough time to collect data and make decisions on the best people to show your ads to.