I've been reading through this thread and my curiosity is sparked as to why dealers are still utilizing a radius as a means of geo-targeting when there are so many efficient methods of targeting. I understand the desire of coverage and radius targeting being a method of "casting a wide net", but wouldn't you be more interested in utilizing dimensions data that would show that in "x" zip code you're spending $1,000 for 2 leads as opposed to "y" zip code that you're spending $1,000 for 10 leads.. and then optimizing according to CPL in most effective areas in a DMA? Just a thought.
Yes, everyone should be doing things a bit better than a simple radius, but the radius still works.
Since much of the location data is based on things other than their actual physical address, the radius has upsides and downsides.
Personally, I do multiple campaigns each with their own city or radius. This allows us to report as you were discussing, but based on specific regions. Our cities aren't 5 million in population, so I'm talking about a small city surrounded by other small cities we target. There's definitely some "wide net" issues with radius and other location targeting though - that location data will never be perfect.
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My biggest challenge is the dealerships where they all live in the dealership's city, but 95% of them work in the city next door that has 1, 2 or even 5 dealerships of the same make. I'm finding that people are doing their car shopping at work (assumed from time of day, location and ISP), which means that this dealership is struggling with everything from AdWords to sales. The more I think about it, the more I realize that I also do all my shopping closer to my office than my home. So we tried targeting the city where they work, but with ads trying to convince them to visit the "hometown" dealership. We tried targeting the hometown harder in the "off hours". We tried so many different location, campaign, keyword and ad types and options and I still can't get a firm grasp on it. The clicks and impressions work well, but the traffic doesn't bite. Did some A/B testing with the theme and no change. Used the theme in another city for a same make dealership and it worked better than their previous theme. Changed the content, did SEO evaluations, etc. Organic traffic navigates the site as we would expect, but for some reason the traffic we bring in from AdWords doesn't grab ahold hardly ever. Again, similar campaigns for the same make (different dealer) 2 hours away works fine.
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