One of the most important examples of that efficiency is zip code targeting.
Traditional direct marketing has been able to target down to a single zip code if the means of getting the flyer or other material to the addresses in that zip code were available.
If nothing else, they could always get there via the post office as long as the marketer also had all or most of the addresses in that zip.
The costs showed up in four main forms:
- Acquiring the addresses
- Developing the creative
- Printing the creative
- Distributing that creative
In reality, the first cost was hit or miss. New houses are built, old ones torn down, families move in and out of existing houses. The quality and quantity of the address list never reached 100 percent.
In some cases, people would receive mailings at the right address with the wrong name. They also would receive flyers that weren’t relevant to them because they were meant for the previous home owner.
Developing the creative was relatively inexpensive especially if in-house talent was used. Printing of course depended on volume, the quality of the paper, the size of the printed page, the number of pages and the amount of color used. Distribution also depended on volume.
Targeting a single zip code cost much less money in total than mass market distribution, but it also was much more expensive on a cost per piece basis. Online changed that equation.
Why Online is More Efficient
Let’s skip the address issue for the moment. Developing the creative is largely unchanged on a cost basis. It’s the next two costs that are driving zip code targeting in the online environment.
Online marketing eliminates the second cost, which is printing the creative, and dramatically reduces the cost of the distribution simply because it doesn’t require a driver, a car, gas and the time it takes to drive from one mailbox to another.
In an increasingly price-conscious world, those two efficiencies are enough for many businesses to switch from traditional to digital distribution.
The key challenge resides in acquiring the addresses.
Again, traditional direct marketing also has that challenge. The quality and quantity of the list is directly related to the cost of acquiring that list. In other words, the better the list, the more it costs.
Online advertising platforms such as Bing, Facebook, Google and local media companies acquire IP addresses rather than postal addresses.
They then use a variety of means to determine the zip codes in which those IPs originate. They track user behavior and interpret the location; they pinpoint the location of the Internet Service Provider for that computer; they even encourage, entice or somewhat manipulate the user into providing their real name, address and zip code.
In any event, the tactics used by these advertising platforms are becoming more effective in identifying the zip codes of individual users.
How to Target Just One Zip
The two most common ways of launching an online advertising campaign are via an account executive — commonly available with local media companies — or via automated processes at companies such as Facebook, Google and Bing.
An account executive is most helpful for anyone inexperienced in online advertising or who needs to package the online campaign with other media.
The automated approach has a steeper learning curve, takes more time to manage, but also costs less because the labor is being shifted onto the advertiser.
In the case of local media companies, it is simply a matter of asking the account executive if they can target by a single zip code, provide the zip code and make sure to ask how many visitors a month come to the site from that zip. Budget accordingly.
In the automated environments such as Bing and Google analytics and ad-delivery software, tools are available that show how many people visits per month from each zip.
Advertisers can then use those tools to estimate the budget and cost per click for targeting that single zip code.
Whether it is done via account executive or automation, zip code targeting is easier and more cost efficient than ever.