Hi Bob,
This is an interesting question, in light of a recent update to the Google Webmaster Guidelines. Here is a link: http://support.google.com/webmasters/bin/answer.py?hl=en&answer=66358.
And here is the text of the update: ------------------------------------
Keyword stuffing
"Keyword stuffing" refers to the practice of loading a webpage with keywords or numbers in an attempt to manipulate a site's ranking in Google search results. Often these keywords appear in a list or group, or out of context (not as natural prose). Filling pages with keywords or numbers results in a negative user experience, and can harm your site's ranking. Focus on creating useful, information-rich content that uses keywords appropriately and in context. Examples of keyword stuffing include:
Lists of phone numbers without substantial added value
Blocks of text listing cities and states a webpage is trying to rank for
Repeating the same words or phrases so often that it sounds unnatural, for example: We sell custom cigar humidors. Our custom cigar humidors are handmade. If you’re thinking of buying a custom cigar humidor, please contact our custom cigar humidor specialists at custom.cigar.humidors@example.com.
Note the second point on that list. Now, in my opinion, what Google is going after with that guideline is a practice I encounter on many local sites wherein someone posts a lists of cities (often in the footer) like this:
Auburn, Audubon, Arrington, Burnside, Camden, Cordell, Craton, Douglas, Douglas Pines, Farmington, Golden, Graham, Hyden, Isleton, Jonesy, Killey, Landow, Mongtomery, Noel Hill, etc.
You see this all the time. Sometimes the city names link to thin content, duplicate pages, and sometimes they don't link anywhere at all. It appears, from the guidelines, that Google does not like this practice.
However, my gut feeling is that Google will view this example differently:
Our dog trainers will come to your home in San Francisco, Berkeley, San Jose, Oakland and San Rafael for gentle canine behavioral training. We schedule appointments that are convenient for you, as you need to be present during each training session.
The difference here is that a short list of a few target cities has been incorporated into a paragraph of text in a natural manner. If, however, the business serves a huge list of cities, like the sample cited above, I would not list that in a block anywhere on the site. Rather, I would encourage the client to begin developing unique, strong pages of content, one by one, for each city, perhaps documenting a training session of a cute dog in a given city on each page. I would then work these into a menu tab called, "Where We Serve," or something along those lines. It's very important to avoid letting this approach turn into a weak effort resulting in duplicate content pages that mimic one another, only swapping out city names. This is a task that should be seen as an opportunity to produce some of the best copy on the website.
Now, all this being said, there are still tons of sites out there with blocks of city names linking to thin, duplicate content that are managing to pull consistent high organic rankings. For clients, this can be a temptation to imitate what a competitor like this is doing. This is where you can help by letting the client know that making a better effort than their competitor has may provide protection from future penalties, should a Google update target certain practices, or should Google turn an eye of heightened scrutiny on the client's industry. With Google, an ounce of prevention is always worth a pound of cure!
Hope this helps, Bob!