Postcode Targeting vs. Radius Targeting
What’s wrong with the way most people are using radius targeting?
Standard radius targeting draws a circle around your store on a map. It completely ignores the real world. It is the default option in Google Ads. It is also the lazy option.
Many agencies use a ten-mile radius around the store location. Then they walk away. They believe everyone inside the radius is a potential customer. They believe everyone outside is not a customer. Both of these assumptions are wrong. This is how people waste about 40% of their local budget on people who would never visit them in real life.
What you need is a strategy that plays by the real-world geography rules. You need to target people based on accessibility. Not proximity. In this guide, we are going to explain how postcode targeting is the secret weapon for all radius targeting alternatives that work.
The geometry of the real world
The real world is not a circle. Radius targeting treats every direction equally. Ten miles north is the same as ten miles south. A mile through a city centre takes the same time as a mile on a motorway.
Now look at your own town. Is the traffic the same in every direction? Of course not. Are the demographics the same? Of course not. Are the physical barriers the same? Of course not. So why would you target them the same way?
The four fatal flaws of radius targeting
We have defined four specific reasons why simple radius targeting circles are bad for retailers.
1. Physical Barriers
Barriers stop your customers. A river may run through your radius. Only two bridges cross the river. A customer lives three miles away on the other side of the river. Traffic at the bridge means it takes 40 minutes to drive there. They will not visit your store.
Google is paying to show ads to them. They click your ad. They check the route. They decide it is too far. You pay for the click but no visit. You have just wasted your money.
2. Transport Infrastructure
Transportation is how people move. People move along fast routes. A motorway will extend your accessibility significantly. A customer fifteen miles away may be able to get to you in 15 minutes if they live near a junction.
Radius targeting often excludes these people. You cut them off because they are “too far” in miles. But they are “close” in minutes. You are missing high-value opportunities from people who find you accessible.
3. Demographic Variations
Neighbourhoods change rapidly. You might be a premium product. Five miles east of your store may be an affluent area. Five miles west of your store is a student area with low disposable income.
A simple radius circle treats them equally. Smart Bidding will try to find customers in both areas. But the Radius constraint forces it to treat the whole circle as one eligible zone. This will dilute the algorithms focus. You waste budget by showing ads in low-intent areas instead of putting 100% focus on the high-intent zones.
4. Natural Patterns
People have habits. They shop near work. They shop on their commute. They do not just shop near home. A radius around your store may well miss the business district where your customers are working all day.
A radius around their home misses the fact that they drive past your store every evening. You have to target the journey, not just the house.
Once you have defined your target areas, you need the right engine to reach them.
See how Performance Max for Retail automates this.
Fix it with data-driven postcode targeting
You must replace radius targeting with postcode targeting. This should be done with drive-time-based rather than crow-flies distance. It should create a map based on accessibility.
We build a custom database for your stores. We list every postcode within 25 miles. Then we use the Google Maps API to calculate the exact driving time from the centre of that postcode to your door.
The map data changes the landscape completely. We often find that a basic amoeba shape works better than a simple circle. It follows the main roads. It extends out along motorways. It shrinks away from areas with heavy congestion. It avoids the rivers.
Guiding smart bidding with postcode tiers
Google Ads is now all about Smart Bidding (AI) that decides how much to pay for a click. This AI is powerful, but it needs clear boundaries. If you give it a giant radius it has to test thousands of people to understand what is and is not efficient.
We organise postcodes into tiers to give it a cleaner playground.
- Tier 1 (The Sweet Spot): Short drive time (e.g., less than 15 minutes) and matches your target demographic. We explicitly target these postcodes. We tell the Smart Bidding algorithm: “Find customers here first.”
- Tier 2 (Standard): Reasonable drive time (e.g., 15–25 minutes). We include these to give the AI scale.
- Tier 3 (Exploration): Farther away but accessible. We include these carefully to see if the AI can find efficient conversions.
- Tier 4 (Excluded): Bad drive time (e.g., longer than 25 minutes) or physical barriers. We exclude these areas completely. This prevents the Smart Bidding AI from ever wasting a penny on testing these zones.
By excluding the bad areas, you stop the AI wasting budget on “learning” that a customer 40 minutes away isn’t a visitor. You force the budget into the areas that actually convert.
This improves your profile ranking in the target areas.
Learn more about Google Business Profile Optimisation.
How to build your map: step by step
You could do this yourself. All you need is a list of postcodes and a spreadsheet.
- Get your postcodes: Download a list of all postcodes in your region.
- Drive times: Check each postcode against Google Maps to see the drive time from the postcode to your store.
- Segment your lists: Make your Tier lists based on time.
- Upload to Google Ads: Go to Locations. Select Enter multiple locations. Paste your lists in.
- Exclude the bad areas: Take your Tier 4 list and add it as a Negative Location. This is the most important step to save budget.
Check out the case study of the results for a client who switched below.
Case Study: The Results of Switching
A client switched from 15-mile radius to our postcode method. They saved money straight away. They stopped advertising to a town across a toll bridge. Nobody from that town would visit the store because of the toll. The client reinvested the saved money into a Tier 1 area next to a motorway. Store visits increased. Cost per Visit decreased. Ad spend stayed the same, but revenue increased.
See the full impact of this strategy on our 215% Increase in Store Visits Case Study.
Conclusion
Do not use radius targeting. It is a tool for lazy marketers. It is a big, expensive circle on a map that completely ignores the reality of your local geography. It completely ignores the reality of traffic.
You need to respect how your customers actually travel. Use data to build your real-world map. Target the accessible, not just the proximate. This is the only way to spend your budget efficiently. This is the only way to win in the local market.
Want to see what your real catchment area looks like?
We can map your postcodes and help you identify your wasted spend.