If you advertise on Facebook, then you’re probably already familiar with the Custom Audiences tool that lets you target existing customers. What you might not know is that the social network also offers the ability to help you reach people that are similar to your existing customers through Lookalike Audiences.
Launched last spring, Lookalike Audiences let you reach new people who are likely to be interested in your business because they’re similar to a customer list you already care about. The tool builds off Custom Audiences and uses interests or demographics to show ads to people who share common attributes as your existing customers.
Yesterday, Facebook announced the expansion of this tool which now allows you to create lookalike audiences based on people who visit your website, use your mobile app, or are connected to your Facebook Page. Previously, you could only create lookalikes based on existing information like email addresses, phone numbers, and user IDs.
This is a major upgrade for marketers and advertisers looking to acquire more fans, increase site registration, drive off-Facebook purchases and coupon claims, and build brand awareness. Before you get started building your campaign, let’s take a closer look at Lookalike Audiences and what this update means for your business.
The Lookalike Audiences option has been available in Power Editor since March 2013. During testing, an online travel site reportedly saw 70 percent lower costs per action, and an online shopping site saw 94 percent lower costs per checkout. Upon its public launch, Facebook said Lookalike Audiences resulted in a “wide range of success metrics” for companies like Fab, including lower cost per checkout, lower cost per acquisition, larger purchase size, as well as faster and increased return on investment.
More recent studies have found similar results. Using Lookalike Audiences, the travel company Secret Escapes saw a 134 percent boost to clickthrough rates on its ads, while also increasing acquisition volume and sign-ups. Additionally, when used by Quest Nutrition, the company saw a 2x return on investment. And this was when Lookalike Audiences were limited to just email addresses, phone numbers, and user IDs.
Now that Facebook has introduced three additional ways of building Lookalike Audiences, we expect that advertisers will see even greater returns. Here’s a bit more information about how you can use the new capabilities.
An online business can use Lookalike Audiences to target people who are similar to those who previously made purchases on its website. For example, e-commerce company Shopify saw a 2x decrease in cost per lead when using lookalikes of its website visitors.
App developers can also use Lookalike Audiences to increase in-app purchases by creating lookalikes of people who have previously done so. You’ll then be able to reach those individuals with mobile app adds — you can learn more about this ad unit, as well as its new features, in our previous article.
And finally, engaging with existing and potential customers through your Facebook Page is an important part of any business’ marketing strategy. Now you can use Lookalike Audiences to reach people like the fans who are already connected to your Page.
The new features for Lookalike Audiences are available to all advertisers in Power Editor. To get started, go to Power Editor and click the “Audiences” tab, then select “Create New Audience” and “Lookalike Audience.” From there, choose the country where you’d like to build your audience. Additionally, keep in mind that there are two types of optimization for your lookalikes.
Optimizing for similarity means that your Lookalike Audience will include the top one percent of people in your selected country who are most similar to your customer audience. The reach of this new audience will be smaller, but the match will be more precise. This method is recommended when you want a very specific match or have a limited budget.
When you optimize for greater reach, your Lookalike Audience will include the top five percent of people in your selected country. Note that the top one percent will be included — you can use exclusion targeting to remove them if you’d like. Although this method has a less precise match than Similarity, it’s the best option if you want to get your message in front of more people who are likely to be interested in your business.
Custom and Lookalike Audiences can be a great addition to your Facebook Ad strategy. Additionally, take a look at our earlier article for more information on how to leverage Facebook Ads to drive business.
Jennifer Beese: Jennifer Beese has worked as a community manager and social media strategist. When she’s not writing, you can find her studying anatomy and physiology—she literally has a skeleton in her closet—or under the stars with her telescope.