Geotargeting can easily increase CTR and ROI. It can increase CTR by you writing your ads slightly different than normal. If you live in the Las Vegas area, and sell designer shoes at XYZ Clothing store, you would want to incorporate something about Las Vegas into your ad copy.
Example normal ad:
Find the best selection of designer shoes at the lowest prices, always at XYZ Clothing.
Ad written for Geotargeted visitors in the Las Vegas area:
Designer shoes in Las Vegas, great prices only at XYZ Clothing.
When visitors from the Las Vegas area see the words "Las Vegas" in your ad, they will be drawn in more than a generic shoe ad that doesn't mention their home city.
This works especially well in a smaller area, but the trade off is obviously the lack of large numbers of searchers.
Try some Geotargeting, what's the worst that can happen?
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