Click to Watch in HD > What Are Lookalike Audiences
Watch On the other hand, the large number of options can also be a curse, since it’s very easy to waste ad spend testing various targeting combinations in an attempt to arrive at the best-performing audience segments.
Lookalike audiences allow marketers to take advantage of the incredible amounts of data Facebook has to arrive at those best-performing audiences without excessive trial and error.
What is a Lookalike Audience?
Lookalike audience targeting is based on the idea that people who are most similar to your existing users are most likely to convert.
Facebook’s algorithm for building Lookalike audiences sifts through its data on an input audience (called a seed audience) to find patterns between the seed audience and the overall Facebook user base.
This algorithm takes into account many facets of information that Facebook has on its users, information which transcends simple user input data and includes inferred attributes. Facebook doesn’t go into detail about what exactly is included in its Lookalike modeling, but it’s fairly safe to assume it includes likes, post interactions and other observed online behaviors of a given seed audience.
Facebook then extrapolates patterns to build a larger Lookalike audience of users that most resemble the patterns inferred from the seed audience. Fair warning: since the Lookalike algorithm is mostly black box, it requires you to give up some control over who ends up in your target audience as you have less ability to explicitly choose the targeting parameters for each audience.
At Growth Pilots, we’ve spent millions of dollars testing different targeting methods on Facebook and found that for most companies doing performance-driven advertising, Lookalike audience targeting works far better than anything else both in terms of ROI (efficiency) and audience reach (scalability).
How it works
The first step in building a Lookalike is to set up a seed audience. This is the set of people you want the audience for your campaign to resemble.
To do this, first create a custom audience.
Create a Custom Audience
You can build this audience by uploading your database of customers, or on the basis of traffic to your website or app.
Custom Audience Source Window
Keep in mind that in order for a custom audience to serve as the basis of a Lookalike, it has to include more than 100 people from the same country who have Facebook accounts that match the uploaded data (see below for an explanation of match rates).
Once you’ve created your seed audience, input it in the “source” field of your new Lookalike audience.
Create a Lookalike Audience
From there, Facebook will get to work crunching data to find the users most similar to your seed audience.
Maximizing Results with Lookalike Audiences
While the process of setting up a Lookalike audience is pretty simple, there are some key strategies that can help maximize results with Lookalikes.
Choosing Your Source
The first thing to decide is where to source the people for your seed audience. As previously discussed, there are a few ways to do this: you can upload a Customer List of email addresses or phone numbers, build a website custom audience (WCA) based on a Facebook pixel that tracks a user’s behavior on your website, or build an audience using events in your mobile app.
For Customer Lists, Facebook will automatically match the e-mails and phone numbers you upload to the corresponding Facebook profiles. It’s important to note that the match rate – the percentage of your contact list that Facebook is able to link to a corresponding Facebook account – will never be 100%, since not everyone has a Facebook account and those that do often have more than one e-mail. So you’ll need to ensure you upload a large enough list to account for a match rate of less than 100%.
Typically, the match rates for B2C companies are usually higher than for B2B – we’ve seen as high as 95% match rates in the former case and as low as 20% in the latter. And as mentioned before, you need at least 100 customers who have matched to build a viable seed audience (although, as we’ll discuss shortly, you should aim for much more).
Using the Facebook pixel or mobile app events as a source for your audience has both advantages and disadvantages compared to uploading a Customer List. On the plus side, an audience based on the Facebook pixel or app events will update your seed audience automatically. It also allows you to specifically define the event you count as a conversion, whether that be an actual purchase/subscription or some event higher in the funnel.
Facebook Retargeting Pro (PPC Advertising)