Google has modified the way its location targeting controls function on AdWords to give advertisers more control over who sees their ads. Most importantly, advertisers can now distinguish between people that signal a location as part of their search query, and others that search from an IP address or GPS location in the area.
For example, if you were marketing a San Francisco hotel, you might only want to show your ads to people who searched for “San Francisco hotels,” whatever their current geographical location. In that case, you’d choose “Target using search intent.” People currently located in San Francisco who search for “hotels” wouldn’t see your ads.
Alternatively, if you wanted to target only those physically in a given location you could “Target using physical location.”
These options are also available for exclusion, so you could exclude either by physical location or by search intent. For example, a theme park owner in San Antonio might want to advertise special prices to those planning a trip there, but not promote them to locals. They could exclude by physical location in San Antonio, and still show the ad to potential tourists.
These more granular controls come at a time when Google is ramping up its offerings to local businesses, partly in response to the increase in location-based searches coming in from smartphones.