How to Advertise Within Areas of a City? Please Help.

I once had an ad campaign going in the town I used to live in, which was fairly small. Now, I'm trying to restart the businsss, but I live in a bigger city now and it seems more confusing.

My previous town had two ZIP codes. I was able to do the ad program for the entire town. Let's say I found a business who wanted to sign up - the marketing was sent all over the town - nothing to figure out.

Now, the city I live in has around 40 or more ZIP codes and is sprawled out. I don't know where to start or what areas to cover. Or, how to do an overall business plan? Should I break it down into 4 to 6 areas (NW, SW, ect), or should I try to do 20 or more areas, narrowing it down more to prospects within the advertisers' immediate vicinity?

For example, say a restaurant signs up. Should I try to reach customers for him within the entire northwest area of a town, or just two or three ZIP codes around him, eliminating those who are farther out (an example of the confusion that I used to not have)?

Then, if I want to do a website along with it, should the site show the advertisers within different parts of the city, or just not break it down. I'm thinking about moving away and doing again in a smaller area, because it seemed so much more simple.

How can I overcome this confusion, and what would be the best definite strategy? The perplexity has been preventing me from getting started. I'm calling upon SOWPub's best for some answers. Please help, thanks.