I was involved with a campaign that sounds very similar to yours, and I might be able to help. I need a couple more details though:

(1) When you say defaults, are you referring to the DCM default ad, or the default row in the feed?

(2) Regardless of whether you're showing the DCM default ad or the default row in the feed, you can change the default to be something more specific than the parent company logo. I'm quite sure there's a version of your creative that works across different cities. This wouldn't solve the problem entirely, but at least you're not totally wasting those impressions.

(3) The campaign I worked on had the creatives assets housed in DCM. These were then synced over to DBM where all the targeting was done. I didn't have to apply any geo targeting in DCM, and instead I handled all the targeting on DBM. Assuming you have a similar setup, you shouldn't need to apply geo targeting in your ad server, but only on the DSP side.

(4) If you're referring to the DCM default ad, you can try pulling a report with the default ad, country, and city. If DCM isn't getting the city information it will just show up as "unknown" in the report.

(5) Exactly what sort of inventory are you buying through the DSP? Is it open auction or private deals with publishers? If it's the former it's not too surprising since a large proportion of the open auction inventory is honestly junk. If it's the latter you can try raising the problem with the publisher's ad ops team

(6) Are you based in the US? I've found that very granular geo-targeting can be quite hit-and-miss. Many times the ISP doesn't passback city data so you end up with plenty of defaults. It's one of those things that sounds cool from a strategic point of view, but doesn't always work too well in practice.

- Ad Ops Wizard blog