Why do local relevance and proximity matter?
Local search is built around place. A searcher in a city wants businesses that serve that city, and Google describes relevance, distance and prominence as factors in local results. A link from a business in the same region reads as a natural neighbourly connection, such as a supplier or a nearby trade mentioning a firm it knows.
We do not claim any specific ranking effect from this, and nobody outside Google can measure one with certainty. We offer geo-matching because it makes the placement look and read like a real local connection, which is the sensible way to build local links.
It also helps the article itself. A host that knows the area can write about local projects, local customers and local conditions, and that makes the content more useful to the people who read it.

