(Source: Black Box Digital Marketing Solutions)
When done correctly, advertising on Facebook is a very effective way of reaching the right audience for your business. One of the great tools our team at Black Box uses to ensure our ads reach the right audience is called a Lookalike Audience. In this blog, we will discuss what a Lookalike Audience is and exactly how and when to use them.
P.S. If you are new to advertising on Facebook, check out our blog: Top 6 Facebook Ad Mistakes & How To Avoid Them. This is a great starting point before diving into Lookalikes which are slightly more complicated!
First off, what is a Lookalike Audience? According to Facebook, “A Lookalike Audience is a way to reach new people who are likely to be interested in your business because they’re similar to your best existing customers.” Facebook will automatically find commonalities between your best customers and create an audience of the top 10% of similar people in your selected country. This Lookalike Audience is a powerful tool in any digital marketing campaign.
Before you create a LL Audience, you will need a Source Audience, this is the data source in which the Lookalike Audience will be based off of. There are a variety of Source Audiences including; Your Facebook Pixel data, Customer lists, People who engaged with your Facebook page or ads, and mobile app data. We use a variety of these sources for most of our clients.
As we take a deeper dive into Lookalike Audiences, it’s important to understand what type of data you are collecting. If you have a customer list, a CRM, an Email Service Provider, or a Facebook Pixel installed (If you need help on this check out our article: “Marketing Tracking Tools and When to Use Them”), you are in luck. You can create highly effective LL Audiences. To do this, you will need a minimum of 100 data points (users) from any of these sources, the larger the number the better, 100 is merely the minimum requirement. The more users you have in your source audience the more accurate your Lookalike Audience will be.
One of the best sources of data for creating a LL Audience is from your Facebook Pixel. At Black Box, we are obsessed with tracking and ensure that every single one of our clients has a Facebook Pixel installed correctly on their site. A Pixel is a great source for your LL Audience. It captures live user data and is constantly updating in the Lookalike Audience, ensuring your audience is continually optimized. However, there are some limitations. If you do not have a substantial amount of users on your site or purchases, again the more data Facebook has, the more accurate the LL Audience will be.
CRM data and customer lists of any kind are also very effective Source Audiences. As far as the CRM data itself, you should be collecting at a bare minimum, first name, last name and email address. Other attributes that are very helpful to include are; customer value, phone number, city, state, mobile advertiser ID (madid), and Facebook App User ID (uid) (more about these here). If you are collecting this information, then you are in a great position. At Black Box, we love using CRM data to build out LL Audiences because we can segment these lists. For example, let’s say you own an e-commerce store that sells sports equipment online. If you have a variety of different sports you promote, it would be relevant for you to separate hockey customers from baseball. You can create a segmented LL Audience with just hockey purchases and use it to supplement audiences that are targeting new hockey players. The same goes for baseball or any other type of customer. With any data, making sure your data is cleaned is vital, the LL Audience is only as good as your source data. HubSpot has a great article about how to clean your CRM, check it out here!
Now that we’ve gone over data sources, let’s get to the meat and potatoes. To reiterate, a Lookalike Audience is created by Facebook matching your Source Data to new customers who fit a variety of similar attributes. Facebook does this through an algorithm that compares your customers across ALL of the attributes and data points you provide. Facebook determines the top 10% of closest matched individuals in your selected country that will be served your ads.
Before getting started on creating a Lookalike Audience, you need to ensure that you are the admin of the Page or pixel you create your Lookalike Audience from. If you are an admin, you should be good to go. If not, make sure you are at least set up as an Advertiser.
You can check this in Facebook Ads Manager by going to business settings and clicking users. If your Facebook account looks like the image below, then you are all set!
(Source: Facebook Ads Manager)
There are two main ways to create LL Audiences in Facebook, through your Facebook Pixel data, and through your customer lists. Let’s start with Pixel data:
Let’s walk through a real-life example of how to build a Lookalike Audience step by step. We will use one of our client’s Tone House: a boutique high-end fitness studio in the heart of New York City with online fitness classes. Let’s run through how to set up a Lookalike Audience based on Pixel data:
When you are creating your Lookalike Audience, based on your Pixel Data it should look like this:
(Source: Facebook Ads Manager)
If you were following along congrats! You have a Lookalike Audience. Your Lookalike Audience will update every 3 to 7 days.
Now let’s move onto customer list Lookalike Audiences, just to warn you there are a few more steps to this method, but once you get the formatting down it’s easy I promise!
Setting up a Lookalike from your customer list is a bit trickier than through your Pixel data and will require you to download your list from your CRM, email marketing service, or anywhere you store raw customer data. Although the first few customer lists can be challenging and frankly downright annoying, customer lists are extremely valuable especially if you can include customer value. Facebook is very particular in the format in which it accepts your customer data, here is some helpful information on how to format your sheets.
Once you have uploaded your customer list (segment it however you would like, for this example, we are just going to use ALL customers), we can move into how to create a LL Audience with that Customer list.
(Source: Facebook Ads Manager)
Your screen should look like this:
(Source: Facebook Ads Manager)
Now that you know how to create a few basic Lookalike Audiences, you should be ready to move onto how to use them!
You are now equipped with a powerful marketing tool, Lookalike Audiences, they allow you to seemingly ‘hack’ your way onto the screens of similar audiences to your best customers! The most common use of Lookalike Audiences is in prospecting targeting. If you want to target a certain geographic area and add in your Lookalike targeting so you are only serving ads in a specific location to that Audience you can and should. We do this all the time, let’s say a client started their business in Boston and has a great customer base there, they may want to try out a few different markets to see if they get any traction. A great way to do this would be to target each new location you are looking to do business with and add in Lookalike audiences of 1-3% of your current customers and another ad set with the same location and a Lookalike Audience of your pixel data. This ALONE will give you a great starting point and your ads should be served in front of very similar eyeballs to your current customer list!
A rule of thumb that works in most cases is to break your Lookalike Audience down by percentages. This allows you to further segment your ad sets if needed.
Want to learn more about Facebook Ads and Facebook Custom Audiences? Check out Facebook’s Custom Audience Section of their BluePrint Course here to learn even more about Lookalike Audiences.
In conclusion, Lookalike Audiences are a great tool to add to your marketing mix. Lookalikes allow you to serve ads to a very similar audience to your current customer base. You should be using Lookalike Audiences if you are not already. You can use them to bring new customers to your site. The opportunities are endless.
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