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 platforms power
- 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 which surveyed more than 2,6000 small business owners found that 62% felt their Facebook Ads were ‘missing the target.’
It’s not that those small businesses aren’t seeing any returns, it’s the ‘quality of the returns and the lack of conversions’ that are in question.
But advertisers continue to pour billions into Facebook for a reason. And that reason is that Facebook ads work.
The problem isn’t the ad platform. It’s either the ad creative or the audience targeting that is at fault. Today, we’ll discuss audience targeting with a focus on the top three mistakes business owners using Lookalike Audiences are making.
Mistake #1: You are creating your lookalikes from the wrong audiences
Unfortunately, creating a great lookalike audience isn’t as simple as choosing a custom audience at random and hoping that it will generate high quality leads.
If you 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.
If you’re simply going for quantity with these larger lists, the numbers are often deceiving. Whilst being larger, the majority of them are usually not the potential leads that will be likely to 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 big campaigns with lookalike audiences.
The biggest problem that many businesses tend to fall into in this case is the lookalike trap: using nothing but lookalike audiences in their campaigns. This sees businesses jump from lookalike audience to lookalike audience desperately trying to gauge interest.
Using lookalikes in this way runs the very real risk of creating stale audiences, which will result in high frequency statistics (which is the 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 in regards to ROAS and conversion rates. If they’re converting, maybe add in another! If they’re not, drop them down. Just 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’ve thought were the best lookalike audiences you could create. It’s generated great performance, and you may have, over time, continued to build new campaigns using new creative and new copy.
But you haven’t touched the audiences.
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 specific business, and we begin to lose customers. So in order to stay on top of performing campaigns, you also have to stay on top of performing audiences.
Solution: Take some time to refresh your overall audience lists quarterly and cut out old audiences you are not using. While you’re 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 use can keep track 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 audiences. Sometimes all it takes is a minor refresh on 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 down into complex custom audiences 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 you see they are stagnating
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: After building and selling his first online businesses, Stefanos learned to grow a scalable and sellable business. His primary areas of focus include: product sourcing, business strategy, marketing, general management & operational activities.
Ever since executing in these areas and learning as he goes, Stefanos began writing on these topics and working with start-ups and software companies as a consultant and content marketer. Primary areas of writing focus on Saas, Start-ups, E-commerce & Marketing.