Ask for a list of consumers in a given area and you will almost always be asked for postcodes. It is the unit everyone uses, because it is the unit everyone has. It is also far too big to describe where your buyers actually are.
What a postcode actually holds
Australia has roughly 3,300 postcodes covering a continent. Some are small and dense. Many are not. Australia Post has told a Senate Estimates committee that one Queensland postcode takes in 57 separate localities, and that 135 postcodes nationally cover 20 or more.
So when a list is selected on postcode, the selection is not “people near here”. It is “everyone in a box that might span dozens of suburbs and tens of thousands of households”.
For some campaigns that is fine. If you are promoting something nearly everyone buys, a blunt selection costs you very little. For anything narrower, it is the reason the response rate disappoints.
Buyers cluster. Boundaries do not follow them.
People with similar incomes, similar housing and similar habits tend to live near each other. That is not a theory, it is what every census shows. Those pockets are real, they are small, and they pay no attention at all to where a postal boundary was drawn.
A postcode selection spreads your spend evenly across the box. The pockets where your buyers concentrate get the same weight as the streets where nobody will ever respond. You pay the same for both.
A finer unit already exists
The Australian Bureau of Statistics divides the country into Statistical Areas Level 1, or SA1s. There are 63,485 of them. Each one holds between 200 and 800 people, averaging around 400.
That is roughly twenty times finer than a postcode. Fine enough to separate one part of a suburb from another. Fine enough that when we say your buyers concentrate here and not there, the statement means something specific.
SA1 is not a media buying currency and we are not suggesting you start buying media that way. It is a selection unit. It decides which records go on the list before anything is sent.
What that changes in practice
Take a client with a narrow consumer product and a modest budget. Selected on postcode, the list is large, cheap per record, and mostly made up of people who will never buy. Selected on SA1, the same budget buys a much smaller list, weighted to where that behaviour actually concentrates.
Fewer records. Higher cost per record. Better campaign.
That trade-off is uncomfortable if you are being measured on list size, which is exactly why the market keeps selling volume. It is the right trade-off if you are being measured on replies.
Where behaviour comes in
Geography on its own only gets you part of the way. Knowing an area is full of high-income households with children does not tell you they buy your category.
So we layer behavioural data on top: what people in an area actually spend money on. Combine the two and you are not selecting an area that looks promising. You are selecting the areas where the behaviour you care about is genuinely concentrated.
Then you still have to reach them
A well-selected list sitting in a spreadsheet has done nothing for anyone. The next question is always the same one: now how do we contact these people?
That is where most data suppliers hand you a file and wish you luck. We send the campaign ourselves — email, SMS and direct mail, from our own systems, using data that is fully consented so those channels are open to us in the first place.
Finding the right people and reaching them are the same job. We would rather do both than do half and leave you to find three more suppliers for the rest.
Want to see what this looks like for your category? We can show you the concentration map for your audience before you commit to anything. Get in touch.
Sources: Australian Bureau of Statistics, Australian Statistical Geography Standard Edition 4; Australia Post evidence to Senate Estimates on postcode allocation.
