Facebook’s Household Income Targeting by ZIP Code – A Viable Partner Categories Alternative?
Published: November 28, 2018
Author: Joe Stanton
This fall, Facebook removed Partner Categories from their advertising targeting options; this feature had given advertisers access to third-party data lists that enabled targeting of individuals by household income (HHI), among other options. The removal of Partner Categories forced marketers to find alternatives for some of their now-inaccessible audiences.
One alternative introduced by Facebook immediately to offset the loss of Partner Categories was HHI layering by ZIP codes – which didn’t target individuals but instead targeted entire ZIP codes that ranked in a certain percentage band of average household income.
According to Facebook, the newly available HHI layering information is comprised of “people who live in the top X% of US ZIP codes by average household income, based on publicly available information.” There are several income-level percentages available for ZIP code targeting, ranging from the top 5% to top 50%. One approach to using this type of layering would be brands with high price point products targeting the top 5-10% household income ZIP codes to locate users with higher disposable incomes.
Recently, we ran a test to compare results between Partner Category-driven individual HHI targeting and HHI targeting by ZIP code (we used the top 5-50%). We focused our efforts on generating Leads (the first conversion in the funnel) and Contacts (the second conversion in the funnel).
Our test was to see how the new HHI ZIP codes targeting (top 5-50%) compared to the Partner Categories HHI targeting ($150K+). It’s important to note that this was not an A/B test and these two ad sets did not run at the same time; we chose data from the same amount of time from each ad set to compare.
The HHI ZIP codes audience provided stronger initial metrics than the $150K audience, with 45% higher CTRs resulting in 44% more efficient CPCs. Additionally, the HHI ZIP codes audiences showed 214% stronger Lead volume, which led CVRs to be 116% higher and CPLs to be 74% more efficient. While Contacts volume was similar between both audiences and the Contacts CVR was stronger on the Partner Categories audience, the lower CPC for the new ZIP codes targeting allowed for a 19% stronger CPA.
Overall, the new HHI ZIP codes targeting showed itself to be a viable alternative to the original Partner Categories HHI targeting. The HHI ZIP codes targeting improved performance of this target, starting with overall lower initial costs and pushing more leads into the funnel at more efficient CPLs.
Have you tested laying income targeting on your audiences? What were the results? Leave a comment to let us know!