How presence or interest targeting works
This is the wider of the two location options. Ads may serve to people who are in, or regularly in, the places you selected, and also to people anywhere else who show interest in those places. Interest is inferred from behaviour: the terms someone searches, the sites and videos they spend time with, the destinations they keep looking up.
So a campaign targeting Kathmandu on this setting is eligible to reach a person in Kathmandu and a person in Sydney searching “hotels in Kathmandu”. Both count as a match, and both cost the same. The Google Ads location report can tell them apart afterwards, because it records whether a click came from someone in the place or someone interested in it.
Why presence or interest targeting matters
For a large part of Nepal’s export-facing business the interest half is the entire market. Trekking companies, hotels, education consultancies, remittance services and property developers sell mainly to people who are not in the country. Restricting those campaigns to presence in the location would remove almost every customer they have.
For everybody else it is the most expensive setting in the account. A dental clinic, a plumber or a restaurant serving one part of the city ends up paying for clicks from students abroad, curious researchers and anyone whose search happened to include the city name, none of whom can buy anything.
Common mistakes with presence or interest targeting
Leaving it on for a business that can only serve people locally is by far the commonest, and it hides well. Impressions and clicks look healthy, enquiries do not follow, and the campaign gets rebuilt when a single setting was the cause.
Blaming the platform is the second. Foreign traffic feels like a fault in the system when it is the behaviour the campaign asked for, described plainly in the setting’s own name.
The third is assuming interest only means someone typed your city into the search box. It can also be inferred from the content a person consumes, which is broader and harder to predict. That is why excluding the countries you cannot serve is more dependable than trusting the wording of the setting to keep them out.
How to act on it
Start from one question: can you actually serve someone who is not here. If the answer is no, switch to presence and add location exclusions for the countries that keep turning up in the report.
If the answer is yes, keep the wider setting but stop running both audiences through one campaign. Local and overseas demand deserve different ads, budgets and landing pages, and often a different currency, contact method and response time. Someone in Australia enquiring about a trek needs a page that answers questions a Kathmandu resident would never ask.
Either way, read the location report by location type rather than by country alone, so you can see how much of the spend went to presence and how much to interest. Then set a date to look again, because the mix moves with the seasons: overseas interest in Nepal rises and falls through the trekking year, and a setting that suited one quarter can be wrong in the next.