Top Three Lookalike Mistakes Made by Small Business Owners
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If you’re like most small business owners advertising on Facebook you:
- Use Facebook Ads because you understand the power of the platform
- Are aware of the extensive targeting features Facebook offers and are utilizing tools like Lookalike Audiences
- Are part of the 62% of SMB owners that say Facebook Ads miss their targets
A study published on Small Business Trends surveyed more than 2,6000 small business owners and found that 62% felt their Facebook Ads were ‘missing the target.’
It’s not that those small businesses aren’t seeing any returns; the ‘quality of the returns and the lack of conversions’ are in question.
But advertisers continue to pour billions into Facebook for a reason. And The reason is that Facebook ads work.
The problem isn’t the ad platform. Either the ad creative or the audience targeting is at fault. Today, we’ll discuss audience targeting with a focus on the top three mistakes business owners using Lookalike Audiences are making.
We focus on direct response and customer acquisition in e-commerce, lead gen, and mobile. When it comes to results and leads, we speak your language.
Mistake #1: You are creating your lookalikes from the wrong audiences
Unfortunately, creating an ideal lookalike audience isn’t as simple as choosing a custom audience randomly and hoping it will generate high-quality leads.
Use generic custom audiences like website visitors or Instagram engagement to create your lookalikes. That will do nothing but dilute your traffic, drag down any potential leads, and waste valuable advertising money.
The numbers are often deceiving if you’re going for quantity with these more extensive lists. While being larger, most of them are usually not the potential leads that will likely convert.
Solution: Scale down. Focus on quality instead of quantity. Scale it down to the top 25% of visitors and those who viewed 50% of your videos on your Facebook and Instagram pages.
If you already have Pixel installed, start a little broader with data from your Pixel using events like view content before moving on to more specific event conversions like recent purchases, add to carts, and completed registration.
Note: If you’re unsure of the quality of your traffic, run ads with the intention of testing and gathering data. If you’re ROAS is discouraging you, think about it as investing in buying data. You need data to run targeted ads.
Mistake #2: You are only using lookalike audiences in your campaigns
It’s easy to see the allure of wanting to jumpstart your extensive campaigns with lookalike audiences.
In this case, the biggest problem that many businesses tend to fall into is the lookalike trap: using nothing but lookalike audiences in their campaigns. This sees companies jump from lookalike audiences to lookalike audiences desperately trying to gauge interest.
Using lookalikes in this way runs the genuine risk of creating stale audiences, which will result in high-frequency statistics (which is one of the main drivers behind consumers’ use of the “hide ad” button), losing campaign (and business) profitability, and missed opportunities to introduce new leads to your products through fresh new eyes.
Solution: Think of lookalike audiences as an accompaniment to your cold and warm audiences. Having one or two in the mix is a great way to test the waters and see how they perform regarding ROAS and conversion rates. If they’re converting, maybe add in another! If they’re not, drop them down. Like any other audience, it’s not worth relying on just one—test, test, test. Find a winner and double down!
Mistake #3: Your campaigns may be suffering from lookalike burnout
Chances are you’ve previously been in a situation where you have set up a campaign with what you thought were the best lookalike audiences you could create. It’s generated excellent performance, and you may have, over time, continued to build new campaigns using new creative and fresh copy.
But you haven’t touched the audience.
Fast forward six months. The audiences are performing well but nowhere near their peak when it first started, and you’re pulling your hair out, trying to figure out why.
Audiences go stale over time. Consumers get bored of seeing specific ads on their News feeds, or they have bought all they believe they can from a particular business, and we begin to lose customers. So to stay on top of performing campaigns, you also have to keep on top of performing audiences.
Solution: Take time to refresh your overall audience lists quarterly and cut out old audiences you are not using. While doing this, delete old lookalike audiences and recreate new, fresh ones out of your preferred email, purchased, and custom audiences every three months (and the respective lists they are created from). Label them accordingly to ensure you can keep track of and use the correct ones in your campaigns.
Always keep an eye on the statistics. If you see a significant drop in performance or something that has been sitting steady is suddenly going downhill, consider readjusting the audience. Sometimes all it takes is a minor refresh over the month between lists and lookalikes to see a spike in campaign performance.
- Scale down but start broader if you’re unsure of your audience quality. Use your Pixel to dig deeper and narrow into complex custom audience lists to create your lookalikes once you have reliable data.
- Ensure you aren’t just using one aspect of your audiences; mix it up with warm and cold prospects.
- Keep an eye on your audience’s performances and refresh them if they stagnate.
Keep to these three main tips, and you should have a group of lookalike audiences that will help you create high-performing ads that convert.
Author’s Bio: Stefanos learned to grow a scalable and sellable business after building and selling his first online business. His primary focus areas include product sourcing, business strategy, marketing, general management & operational activities.
Since executing in these areas and learning as he goes, Stefanos began writing on these topics and working with startups and software companies as a consultant and content marketer. Primary areas of writing focus on Saas, startups, E-commerce & Marketing.