Location targeting in Google Ads specifies where your ads can show. In AI Max campaigns, location targeting functions as a constraint (the AI respects it as a hard boundary) while location-based bid optimization shifts to the AI's model.
Location Targeting Still Functions as a Directive
If you target a campaign to the United States, the AI will not serve ads in Germany. Location exclusions (excluding specific states, cities, or zip codes) are also respected as hard stops. This is one of the advertiser controls that operates as a directive rather than a signal under the July 2026 ToS (https://yositeup.com/blog/google-ads-tos-july-2026-ai-automation-what-changed).
Location targeting types in AI Max:
- Presence (people in the targeted location): the default, most common for local and regional businesses
- Presence or Interest (people in or interested in the location): useful for travel, relocation, and remote-eligible services where someone in New York might be interested in services in Florida
What Changes: Location Bid Adjustments
In traditional campaigns, you could set bid adjustments by location (+20% for California, -10% for rural areas). In AI Max, manual location bid adjustments are de-emphasized — the AI optimizes location-based bidding based on its conversion probability model.
The AI may implicitly "bid more" for users in high-converting locations without you specifying bid adjustments, because its model learns that users from these locations convert at higher rates.
If historical data showed specific locations converting at significantly different rates, the AI may not replicate the same location bid differentiation immediately after the June 2026 data deletion (https://yositeup.com/blog/google-ads-reporting-data-deleted-june-2026). The AI needs to re-learn location performance patterns from current data.
Radius Targeting in AI Max
For local businesses, radius targeting (targeting within X miles of a location) continues to work in AI Max as a constraint. Serve ads only to people within 25 miles of your store? Set radius targeting; the AI won't enter auctions outside that radius.
For AI Max for Shopping (https://yositeup.com/blog/google-ai-max-shopping-replacing-performance-max-2026) with local inventory: radius targeting around store locations is particularly relevant for local product availability (Shopping ads that show "In Stock Nearby"). Radius targeting ensures the AI only enters auctions for users who could realistically visit the store.
Location Performance Analysis After Data Deletion
The deleted Q4 2025 location performance data means you can't benchmark Q4 2026 location performance against last year from Google Ads. For location performance analysis:
- Use GA4 geographic reports (Users > User attributes > Geographic: country/region) filtered by cpc medium
- Compare Q4 2024 Google Ads location data (surviving) vs Q4 2026 performance
- Check for significant location performance changes week-over-week within Q4 2026
DSA Migration and Location Targeting
DSA campaigns used the same location targeting framework as other campaign types. When migrating DSA to AI Max for Search (https://yositeup.com/blog/google-ads-dsa-ai-max-migration-february-2027), location targeting settings carry over. No specific location targeting reconfiguration is required at migration time.
If your DSA campaigns targeted specific regions, verify the AI Max for Search campaigns target the same regions. This is especially important if you're using location targeting to differentiate campaigns by market (one campaign for the Northeast, one for the South, for example).
AI Max and Local Business Targeting
For local businesses running AI Max for Search with a local service area:
- Use radius targeting or city/zip targeting to constrain the AI to your service area
- Use location-specific RSA assets (headlines mentioning the city or region) to improve relevance for local queries
- Use call assets with business hours scheduling to capture local intent at the right time
The AI's query matching in AI Max for Search will naturally pick up locally-oriented queries ("near me," city name queries) when you're targeting the relevant location. You don't need to add "near me" as a keyword; the AI handles local intent matching.
Advanced Location Features: Location Extensions
Location assets (formerly location extensions) show your business address alongside ads. In AI Max, the AI selects when to show location assets based on predicted performance. The AI may prefer to show location assets for queries with local intent (users searching for nearby services) and omit them for queries with non-local intent.
Enable Google Business Profile linking to populate location assets automatically. This feeds the AI with your address, hours, and location data to use in location asset optimization. For AI Max for Shopping with local inventory, this data also informs Local Inventory Ads serving.
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