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Imagine targeting people who are most likely to engage with and buy from your business. This is Facebook lookalike audiences, in a nutshell.
When choosing an audience for your Facebook ads, “lookalikes” is a segmentation tool that finds users with demographics and interests similar to your existing followers. This is an extremely powerful marketing tool to attract high-converting users via Facebook ads.
So, if you’re looking to get the best return on ad spend (ROAS), let’s examine how Facebook lookalike audiences can do that.
Why Are Lookalike Audiences Important?
You might already have a good idea of your ideal customers interests and identity. With Facebook lookalike audiences, this will dissect your existing followers and user base to find their commonalities.
Facebook leverages a massive source of user data to identify common themes and generate an audience of people with similar characteristics.
Consider this a sophisticated audience matcher tool for marketers and business owners. You tell Facebook what your best customers are like, and Facebook delivers a new, segmented audience with prospects that meet your requirements.
One highlighting feature of Facebook lookalike audiences is that you can choose the percentage of “lookalikes” to include in your new audience. For example, a 1% lookalike audience would find 1% of Facebook users in the location you choose that match your original audience.
With this, you can eliminate 99% of users who are likely not going to be a good match for your business.
Lookalike Audiences vs. Interests Based Targeting
Have you ever looked at your own ad preferences on Facebook?
Facebook collects data on every user based on the following activities:
- Pages you and your friends like
- Information from your Facebook and Instagram profiles
- Places you check in to using Facebook
- Signing up for a newsletter
- Making purchases at retail shops
- Signing up for a voucher or discount
- Visiting websites which includes the Facebook Pixel
- Downloading a mobile app
- Adding a product to a cart or making a purchase
- Places you connect to the internet
- Where you use your phone
- Your location on your Facebook and Instagram profile
If you want to see the information Facebook has collected about you, click here.
As you can see, “Your Interests” reveals a long list of interests that Facebook has connected to you. Take a moment to go through your list of interests and ask yourself, how many of those interests are still relevant to me today?
Think about this…
You have been using Facebook for years. The interests you had when you first created your account has likely changed (perhaps significantly) over time.
Interest-based marketing can be a highly-effective strategy to attract new customers to your business. However, the data points that Facebook is using can’t be relied on 100% since a person’s interests can be outdated and can potentially waste a piece of your ad spend.
How to Build Source Audiences
Lookalike audiences are built from source audiences. You can create these source (custom) audiences by going to your Audience Manager.
You can create your own source audiences using data from:
- Customer Information. If you have a newsletter subscription list or a customer file list you can upload either a .txt or .csv file.
- Website Visitors. Be sure to add the Facebook Pixel to your website to track users. With the pixel, you can create a specific audience based on general visits, specific pages, completed purchases, etc.
- App Activity. When using Facebook SDK Event Tracking, app administrators can use data from people who installed your app. There are up to 14 pre-defined tracking events such as, “level achieved” for game apps, and “added to basket” for shopping apps.
- Offline Activity. If you have a list of people who interacted with your business in person, by phone, or via an offline channel, you can upload and include this information.
- Facebook Sources. You can choose to use Facebook’s pre-made sources from lead forms, videos, instant experience, Facebook pages, events, and Instagram business profiles.
Try to create a source audience that will help you achieve your end goal.
For example, if your goal is lead generation, consider using an audience from lead pixel fires or lead form completions.
Quick Note: The minimum size for a source audience is 100. However, you should follow Facebook recommendations and use a source with 1,000 to 50,000 people. The more data you provide, the more accurate you can target your ads.
How to Build Lookalike Audiences
If you don’t create a source audience, you can still build a lookalike audience from Facebook’s pre-determined data sources.
This time, instead of selecting “Custom Audience” click on “Lookalike Audience”:
Next, you can choose your lookalike source, location, and audience (percentage) size.
You can create a number of different Lookalike Audience sizes with wider or broader reach (e.g. 2% of US Audience @ 4,310,000 people vs. 2% to 6% of US Audience @ 8,620,000).
Create as many lookalike audiences as needed. These will remain in your account and ready-to-use for your Facebook ad campaigns.
Improve Lookalike Audience Accuracy
You should always try to modify and tweak your lookalike audiences to find the right combination of interests, locations, age, gender, and other demographics.
For example, in an experiment by Adspresso they found that a 10% Lookalike Audience had a 70% higher cost-per-conversion than a 1% Lookalike Audience.
The smaller the audience size, the more accurate the ads, at least for short term results.
Facebook lookalike ads are not difficult to create.
When creating these audiences, remember that people’s interests can be completely outdated and misrepresenting. If a person visits a fashion Facebook page, it doesn’t necessarily mean they’re interested in fashion or want your product.
Take some time to create detailed source audiences so that Facebook gets a better idea as to who needs your business. Your lookalike audiences will help generate better ads that connect with your best customers and improve return on ad spend.