Yes you can geo-target, and IMHO you must.
We found something similar to you at Smart Bear, and also that a lot of the "leads" from certain countries were technically valid email addresses (for example) but actually B.S. from an actual lead point of view.
The further you can push your "quality" measurement back into your sales process the more accurate your numbers become.
In any case, yes you should segment by location. An easy thing to do is duplicate your campaign several times, then each one geo-target. Then you can a more accurate picture of quantity as well as quantity, and e.g. you can tune how much you spend total OR how much you spend PER CLICK to match what's valuable to you.
It may turn out, for example, that advertising outside your sweet spot is useful at 1/5th the cost-per-click, so you can just do that and be efficient. Sure that might mean many fewer clicks, but that's OK because those clicks are only worth that much.
Also experiment with different ad messages for different locations.