Leveraging Facebook Ad’s Lookalike Audiences
Take advantage of Lookalike audiences as Facebook interest groups wane.
As Facebook roles back interest groups and loses precious data with the iOS updates, lookalike audiences have become more and more practical for launching and managing Facebook Ad campaigns.
Lookalike audiences leverage demographics, interests, and behaviors from a source audience of people engaged with your content on Facebook, visited your website or app, or custom lists you upload to the platform. These audiences “look like” their source audience. Since lookalike audiences are new target audiences, however, we dont consider these audiences top-funnel audiences since Facebook’s algorithms use your seed audience.
When leveraging lookalike audiences, Facebook gives you a range of percentages to choose from to let Facebook know how close you want your lookalike audience to match your source audience while creating your lookalike audiences. Smaller percentages match your source audience more closely, while higher percentages create more extensive, broader audiences.
The most crucial aspect of lookalike audiences is the quality of your source audience. The better the quality of your audiences, the more likely you are to generate high-quality conversions.
To summarize, here’s a list of the advantages of using Lookalike audiences.
- Lookalike audiences are based on source audiences consisting of qualified visitors.
- Lookalike audiences allow us to scale-up reach without sacrificing sophisticated targeting.
- Lookalike audiences are Facebook’s go-to audience in light of reduced targeting options.
- A source audience used for lookalike audiences must contain at least one hundred people from a single country for a lookalike audience.
- Lookalike audiences exclude people within their source audience.
- Lookalike audiences are GDRP compliant since they contain no personal data that the advertiser can process. The advertiser cannot and does not identify individuals or use personally identifiable information.
Understanding Custom Audiences
The “source audiences” used to create Lookalike audiences are “custom audiences.” The critical difference between a Lookalike Audience and a Custom Audience is that advertisers cannot identify individuals within a Lookalike Audience. Lookalike Audiences contain no personal data that you can process and thus is not subject to the GDPR or any rules around digital marketing. Advertisers don’t know who will see it, but they hope people within lookalike audiences share similar characteristics and behaviors to your Custom Audience list.
Custom audiences are created from the below criteria.
- Customer Lists — A list of contact information you supply to Facebook, e.g., customers’ names, phone numbers, email addresses, and other attributes.
- Facebook Pixel & App Tracking — People who have interacted with your website (pixel) or app (SDK) may or may not be Facebook users.
- Facebook Engagement — These are Facebook users who have interacted with your Facebook or Instagram pages, profiles, posts, videos, ads, events, and other activities.
When adding customer lists to your campaign, make sure you have the following characteristics: First name, Last name, Email addresses, Phone numbers, City, State/province, zip / postal code, Country, Date of birth, Year of birth/age and Gender.
Creating Lookalike Audiences with Lifetime Value:
LTV or Lifetime Value measures how valuable a person or account is to your business over time. Lifetime Value is one of the most important metrics for understanding your present customers and reaching your high-quality customers.
To explain further, there’s a massive difference between a customer who frequently buys from you but may only spend a few dollars on each purchase and a customer who buys semi-regularly but spends a lot each time. Both segments may be valuable for different reasons. It’s important to note the contrast between the two groups and market to them accordingly.
Adding Lifetime Value data to custom audiences is one of the best ways to enhance your Facebook Ads campaigns. To take advantage of this feature, you have to have a fundamental understanding of your customers or leads. Once you know who your customers are and which customers are your “MVP’s you can effectively rate them and give them a lifetime value.
Rating your custom lists using LTV gives Facebook a mechanism to prioritize, categorize and optimize your ads. Facebook will prioritize driving people to your site similar to your MVPs or top producers. This work will enable you to target customers and people like them when you know who they are and what makes them valuable.
Below are some questions to ask to get started.
- What is the overall value of the potential length of the relationship?
- Who are my most valuable customers or leads?
- What behaviors or characteristics make these customers or lead valuable?
- What metrics should you use to quantify best and qualify these customers or leads?
- How much does the customer typically spend?
- How does time add value to a customer relationship?
- How often does the customer purchase within a specific time period?
