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I'm new to Moz and am trying to determine whether to create multiple campaigns broken out into product categories or a single campaign and label keywords by product category.

I figure the majority of the folks in the Moz Community are in agency space, so most probably prefer a single campaign per client. We're an in-house marketing team so we have the ability to track up to 10 campaigns but only need to track a single website.

I like the idea of having the different campaigns for different product categories, but I don't want to make things overly complex either. Just because you can do something doesn't necessarily mean you should.

I've seen some funky discrepancies with geo, but never in the 48% range.

It looks like you've already double checked to ensure your AdWords campaigns are only targeting people who are inside your targeted area and not people who are also interested in your targeted area.

If the traffic was all mobile, I'd say it could be an ISP issue. Have you segmented your data by Service Provider to see if the majority of the traffic coming from the out-of-state city is from a single ISP? Often mobile devices have IP addresses from large cities such as Chicago, Atlanta, etc. Maybe AdWords and Google Analytics don't always use the same data to determine location and AdWords could be using something more accurate such as GPS or search history while GA is using IP?

Your out-of-state traffic is still converting, which (hopefully) suggests it's not non-human traffic. Is your client getting phone calls from this other state as well? This would confirm humans are actually interacting with the ads and that the ads are serving out-of-state...

I'm new to Moz and am trying to determine whether to create multiple campaigns broken out into product categories or a single campaign and label keywords by product category.

I figure the majority of the folks in the Moz Community are in agency space, so most probably prefer a single campaign per client. We're an in-house marketing team so we have the ability to track up to 10 campaigns but only need to track a single website.

I like the idea of having the different campaigns for different product categories, but I don't want to make things overly complex either. Just because you can do something doesn't necessarily mean you should.