Wouldn’t it be fantastic if you could target your Facebook Ads to a group of people that you knew were pre-disposed to liking your business and its products and/or services? Well, did you know that this is actually a possibility with Facebook Ads lookalike audiences?
In this guide, I explain lookalike audiences in Facebook ads including what they are, why they rock, and how you can create them to utilise with your ad campaigns.
Facebook Lookalike Audiences – What are they?
Lookalike audiences in Facebook Ads are one of the platforms most useful targeting tools. Lookalike audiences allow you to target new customers based on your existing customer data.
This means that your ads will be targeting people who are similar to people who have had positive interactions with your business. This, ultimately resulting in improved ad performance and targeting.
The process is simple:
- You feed Facebook existing audience data.
- Facebook analyses that audience and finds important info (like demographics and interests).
- It then uses that info to find new customers who have the same interests and behaviours.
It’s basic marketing when you think about it – your essentially targeting potential customers who are the most likely to engage with your business because of their likes, habits, interests, and behaviour.
The beauty is that Facebook lookalike audiences do all the hard work for you though – all you have to do is provide the existing customer data and utilise the lookalike audience for your ad campaigns.
Why are Lookalike Audiences Beneficial for Facebook Ads?
So, we can see that lookalike audiences are used to target your ads and attract new customers to your business. That sound a little vague though – what benefits do lookalike audiences provide? As you will see below, they can help reduce ad spend, boost conversion rates, and make sure you are attracting the right customers.
They Improve Your Ad Targeting
Facebook Ads has numerous targeting features, but these often take time to bear fruit while the platform collects data and refines results. Lookalike audiences in Facebook Ads skips these steps and gives you direct targeting results.
This is because you have to import an existing audience such as a customer database for the lookalike audience to be created from. You are using pre-existing data that you know has given your business success.
Therefore, when a lookalike audience is created using that data, you know that the targeting will be fantastic, and that your ads will be directed at people who have a genuine interest/need for your product or service. It’s one of the best targeting features on Facebook Ads.
You Can Use Lookalike Audiences to Reach New Customers
It’s generally accepted that it’s more difficult to get new customers than it is to retain existing ones. This is because existing customers already have a history with your business, know what to expect, and know if they like your product/service or not.
With new customers, there are multiple unknowns, and that bond of trust hasn’t been built. This is where lookalike audiences helps. The lookalike audience is built from your existing customer data – from customers who have overcome that initial new customer difficulty.
Therefore, you should have more success in reaching new people. Your ads will be targeted at similar types of people and if you use things like social proof, emotive language, and quality ad copy, you should be able to break though that initial new customer block.
Reduced Ad Spend
Lookalike audiences allow you to eliminate the unknown and make sure your ads are targeted at the right people. This will also have the positive effect of reducing your overall ad spend as you will not waste money creating ad campaigns which are targeting the wrong people.
This little optimisation using existing customer data can go a long way in improving the overall performance and cost-efficiency of your PPC marketing. You can then use that saved budget elsewhere such as your local SEO campaign or email marketing.
Improved Conversion Rates
The average conversion rate for Facebook Ads is around 9.21% so it’s important that you do whatever you can to optimise your ads and try to reach the benchmark for your industry.
Lookalike audiences should help you boost those conversion rates. This is because you are targeting people who share commonalities with customers who have already had interactions with your business and thus should be more likely to buy into your ads.
When looking at conversion rates, make sure you check the averages for your industry as they can vary hugely. For example, businesses in the fitness industry can hit up to 14% conversion rates, whereas businesses in the tech industry have some of the lowest conversion rates of around 2-3%.
How to Create Lookalike Audiences in Facebook Ads – A Step-by-Step Process
The actual creation process for lookalike audiences in Facebook Ads is relatively simple. You can get your first audience setup in a few minutes.
Prerequisites
Before you get started creating a lookalike audience for your Ad campaigns there are some prerequisites:
- A “seed” audience of 100+ people that you want your lookalike audience to be based on.
- Relative admin/advertiser permissions to create lookalike audiences.
Your source audience must contain a range of “identifiers” that Facebook Ads can use such as phone numbers, addresses, or email addresses. It must also be presented in a usable format such as a TXT or CSV file.
Steps to create a lookalike audience:
- Login to your Facebook Ads Manager account.
- Open “Audience”.
- Click “Create Audience”.
- Click “Create a Lookalike Audience”.
- Select your source for the audience (i.e. your seed audience).
- Select the audience location (i.e. geographic location that you want your lookalike to be built from).
- Select the audience size. (Percentage of closeness that the lookalike audience will be to your seed audience where a smaller percentage means they match your seed audience more closely).
- Click “Create Audience”.
After completing these 8 steps you should be taken back to the audience screen where your lookalike audience will be displayed when it’s created. You should also see three availability statuses:
- Populating: Your lookalike audience is being created (this can take up to 3 days).
- Audience not created: An error has occurred, and it commonly means the seed audience you selected was too small.
- Ready: Your lookalike audience is ready to be used.
You can then use your lookalike audience for ad targeting in your Facebook Ad campaigns with the hopes of attracting new customers who are aligned with your target demographic.
Optimisation Tips for Your Facebook Lookalike Audiences
Our of all the features Facebook Ads has, lookalike audiences is one of the more beginner-friendly tools. There isn’t much input and not a lot of user interaction your end. However, there are three simple things you can do to optimise their usage.
Lookalike Audiences are Only as Good as the Source Data
I get that it’s tempting to pile all the customer data you have into your lookalike audiences. But this may not necessarily generate the best results.
Remember that your lookalike audiences in Facebook Ads are only as good as the data you provide.
For example, perhaps you have a huge email subscribe list with 1000+ subscribers. This theoretically could be an excellent source to provide to Facebook Ads to create a lookalike audience Afterall, these 1000 people have all shown an interest in your business.
However, why don’t you take it a step further? Out of that email database there might only be 740 customers who have actually made an enquiry with your business. Could that not perhaps be a better source audience?
Or, out of those 740 people, only 560 of them used your services. Maybe this is the ideal source audience? In short – don’t just go for volume when uploading existing audience info. Look for value and think about which audiences will generate the best results.
Consider A/B Testing for the Audience Size Parameter
I mentioned the audience size parameter that you have to set when creating your lookalike audience. This is incredibly important, and it can be difficult to get right at the first attempt.
Do you go for a low percentage audience size and extreme targeting? Or perhaps you try to cast a wider net and use a higher percentage audience size? There are pros and cons to both.
Using a low percentage audience size should result in higher conversions as the lookalike audience will resemble your existing customer data more closely. The downside is this can be restrictive in terms of volume.
Using a high percentage audience size should result in targeting a wider range of people and could potentially result in more traffic and impressions. However, the lookalike audience will be more broadly matched to your existing customer info and thus you could end up generating fake leads.
A simple way to bypass this issue is to run A/B testing using varying lookalike audience size percentages. For example, you could run on campaign with an audience size of 5%, and another with a size of 50%. You can then compare the results to see which approach is better.
Don’t Rely Only on Lookalike Audiences for Facebook Ads
Lookalike audiences in Facebook Ads are excellent, but don’t use them as your only source of targeting. You can manually specify targeting preferences like interests, age, gender, and location. You will get the best results if you use the automation of lookalike audiences, and manual targeting parameters together.
Make Sure Your Ads Reach the Right People with Lookalike Audiences in Facebook Ads
Facebook Ads has a wealth of features, and I understand that it can be difficult to know where to start. Once you have setup your ad account and created your first ad campaign, I recommend having a go with lookalike audiences for Facebook Ads if you have existing customer data to work with.
Always make sure that you have the relevant permission and are complying with GDPR regulations before using existing customer data for things like PPC marketing. Lastly, if you need help creating lookalike audiences, or want to improve your Facebook Ads optimisation, please contact us and we can assist.
