Many paid search programs offer a way to geotarget your search ads. Google, Yahoo and Microsoft allow you to specify a radius in X miles, for how wide or small you want to target a specific location.
I question many advertisers ask, when using such a feature, is... How small of a radius is too small? That question was posed in a Google Groups thread, where AdWordsPro.Steph suggested you want to make your radius no less than "20 or 30 miles around."
Why not less than 20-30 miles? Steph explains that if your radius is defined to such a small area, then you might miss targeting "people that are actually in your target area." She also recommends you expand the targeting feature to not just the radius option, but select specific metro areas.
For me, it all depends on which area you are targeting. If you are a bike courier service in Manhattan, you likely do not want people in Westchester County to see your ads. So, setting your radius to a smaller number might make sense. But in this case, you likely want to target the NYC metro area.
Forum discussion at Google Groups.
