Atherton, CA – 94027
What is special about this ZIP code?
Well, according to CNBC, it’s the most expensive ZIP code in the US to live in. Here’s their Zillow page:
Yeah… really expensive.
Now how about Detroit, MI 48208?
This is one of the least expensive ZIP codes in the US. Somewhat different vibes over on their Zillow page:
The reality of places like 94207 and 48208 existing is that the income levels and demographics of those places likely align to most of the residents. It’s certainly not universal and there are outliers in every situation, but when you look at the vast majority of ZIP codes in the US, you will see similar patterns. Also, there are only certain people who can afford a $10M home, and others who are only able to afford a $15,000 home.
People tend to congregate around others in range of them, whether that be financial, demographic, religious, or otherwise. No matter how diverse the greater population is, humans are pack animals whether by intention or natural instinct.
Why is this relevant to advertising?
Since the beginning of advertising, the goal of an advertiser has been to reach a target audience as precisely as possible. The evolution went through what was available:
- Whether targeting radio and TV by time slot or channel
- To specific sections of the newspaper
- To the age of cookies where the dream of 1:1 targeting was finally achieved
But if we’re being real, 1:1 targeting is a false aspiration. Brands don’t want individuals to buy their products, they want masses to buy them. 3rd party data was an overcorrection to meet the advertiser’s desire for perfect, precision targeting.
Data companies offered scalable, detailed segments for years, promising that this elusive, perfect audience could be packaged up to deliver precision targeting for a fee. As most buyers know, however, performance was never really part of the package. CPAs never quite improved enough to justify the cost of the data, so it was viewed as a branding channel, driving CTR improvements and comfortable exposure to the “right audience.”
The reality is that precision audience at scale is at odds with itself. Trying to narrow down audiences too much reduced the ability to serve budgets in full, so the filters had to be broadened and the edges blurred, and the result was a plethora of 3rd party data segments that were far more generalized than they claimed they were.
The Opportunity
This is why the end of 3rd party cookies is probably a good thing for advertisers. It certainly creates some headaches from a reporting and targeting perspective relative to business as usual, but it creates an opportunity for the industry.
There will be many ways to navigate the end of cookies – from a targeting perspective there is contextual, various ID alternatives from different platforms, new channels, but ZIP code targeting offers a simpler view into how to best access audiences at scale. There is certainly some lack of precision, but precision shouldn’t be the goal, results should be the goal. Knowing that ZIPs have a certain gravitational pull for different groupings of people, the opportunity is there to drive quality performance, at scale, in a privacy friendly way.
In a world where the promise of precision targeting at scale is no longer available through 3rd party data offerings, advertisers must be agile and open to other solutions, and ZIP codes offer a compelling tool that is never going to go away.
