I manage campaigns for a local, independent contractor. The business runs ads with a meager budget, <$500 a month. At the same time, clicks average around $5. The conversion rate hovers around 15% for those within the service area. That's a cost per conversion of ~$30.

For those who are outside of the service area it's less than <1%. While it may only receive a handful of clicks from outside the area a month, it eats into the already minuscule budget for the long shot of a person who decides to look up the service while on vacation or visiting relatives. It's not efficient ad spend for a business like this.

A SaaS business is a different case, but this issue is persistent and getting worse.

The problem is, it also includes anyone who has ever logged into a US VPN. There is no doubt that this will catch some Americans who are abroad, but if you are getting 3-4 non-US clicks to get 1 American abroad click, you are effectively paying 4-5x for that one useful click.

So is everyone else, so in theory the auctioned price per click should be less to compensate.

People don’t pay for clicks, they pay for results. Clicks are an intermediate measure. If I make $100 from $50 spend via 1000 or 100 clicks it’s pretty much the same thing.