Wouldn’t it be great if you could clone your best customers? Thanks to Facebook’s lookalike audiences, you practically can.
Lookalike audiences enable you to build lists of new prospects who share similarities with your existing customers, site visitors and page fans.
These under-the-radar powerhouses in Facebook’s arsenal of advertising tools are a game changer for ecommerce brands. Not only are they a cost-effective way to reach more potential customers, they also enable you to:
- Quickly build lists of people who match your target audience
- Save time and money while improving sales
- Scale campaigns quickly and easily
If you’ve tried Facebook advertising in the past and weren’t happy with the results, you may want to give lookalike audiences a try.
We’ve seen 2x, 5x, 11x and greater return on spend in lookalike campaigns. Some of the most impressive results have come from clients who gave up on Facebook advertising, or were convinced the platform wasn’t a good fit for their offering.
Let’s take a quick look at how lookalike audiences work before exploring the benefits of using them.
How do lookalike audiences work?
Imagine uploading a list of your best customers into a database and receiving a list of new people that share similar traits, interests and demographics with those customers.
That’s the essence of how Facebook lookalike audiences work.
These lookalike audiences are more likely to be interested in your business because of their similarities to your existing customers, website visitors or page fans.
The three types of source audiences
For lookalike audiences to work, you need to have preexisting data – an email list, website visitor data or people who have engaged with your content. This is your source audience.
Facebook uses the source audience to find people with similar profiles. There are three types of source audiences:
- Custom audiences
Custom audiences are created from a list you have – usually existing customers – that you upload to Facebook. These can be a good option for companies with big lists and in-depth analytics on their existing customers – i.e. details on repeat customers, product type/category purchase preferences, etc.
- Website visitors
Building a source audience from your website visitors starts with installing a Facebook pixel on every page of your website. Facebook can then create lookalike audiences that resemble people who have visited specific pages of your website.
- Page fans
If you have a strong presence on Facebook with an engaged community – page likes, content interaction, etc. – you can create a source audience based on users who have already interacted with your content.
Even if you have an existing email list, we recommend Option 2 for two reasons:
ONE: Your customers’ email addresses may not be linked to their Facebook account. Starting from scratch ensures you get usable data on people who are actively engaging with your brand.
TWO: If you have a diverse product catalogue or multiple target audiences – i.e. if you sell jewelry for consumers and jewelry-making equipment for hobbyists or solopreneurs – tracking pixels enable you to gather the data you need to cost-effectively target multiple audiences.
The benefits of lookalike audiences
One of our clients, an ecommerce jewelry company, was running their Facebook advertising at a loss before we started working with them. After installing Facebook pixels on their site and building traffic to their pages, we collected enough emails to build a strong source audience. We then did some A/B testing with the resulting lookalike audiences.
The results were stellar. For less than $650 in spend, they made over $7100 in sales. That’s a 11x return on investment!
Our client’s results are a great example of the benefits of lookalike audiences: time and cost savings, efficient lead generation and easy scalability.
Save time and money
The reason lookalike audiences are so effective is simple: they leverage reams of existing data with artificial intelligence. Facebook’s AI processes and analyzes data faster than a human can, saving you time and money while avoiding the trial-and-error frustrations of interest-based marketing. The result? Less work for you, but more rewards.
Find more future customers faster
Facebook has something you don’t: a huge database of self-reported information from millions of users around the world.
Using its extensive database, Facebook can create an audience that looks like your source audience – similar traits, interests, demographics and more. You can further refine your lookalike audience by including targeting qualities.
The result is an audience that will convert much better than if you tried creating one yourself.
It gets smarter and stronger with repetition
Page fans demonstrate engagement and customer lists showcase previous purchases, but only website traffic indicates purchase intent. That’s why one of the cornerstones of success with lookalike audiences is the Facebook tracking pixel.
These tracking codes enable you to gather data on your website visitors – what pages they visited, the actions they took – and tie it back to their profile information. The longer the pixels operate, the more nuanced information they collect, so you can market more effectively to the audiences who are most likely to visit your site.
Scale campaigns quickly and easily
Lookalike audiences let you start small, with audiences that most closely match your source audience. When you’re ready to reach more people, you simply adjust the size of your lookalike audience and Facebook’s algorithms create a larger lookalike audience to mirror your source audience.
Tips to make the most of your lookalike audiences
Quality and quantity matter when creating source and lookalike audiences. So always keep your list size in mind.
- You need at least 100 people, from a single country, in your source audience to create a lookalike audience. The more people in your source audience, the more accurately Facebook can find others who look like them.
- Lookalike audiences work best with a larger data pool to work from. In addition to creating lookalike audiences from your best customers, consider building lists from repeat purchases, people who purchased specific products/product types, etc.
- Ideally, your source audience should be between 1,000-50,000 people. Too big, and your lookalike audience will end up being ineffective. Too small, and you’re not reaching enough people.
Since you can create up to 500 lookalike audiences from a single source audience, there’s bound to be some audience overlap.
Audience overlap happens when you market to the same audience with different ad sets. It’s not always a bad thing, but when it is, you end up competing against your own ads, which can be a big drain on your time and money.
Facebook’s audience overlap tool shows you detailed information on any overlaps (in audiences with at least 10,000 people), so you can make an informed decision on how to move forward.
‘Do we really need to use Facebook?’
If you’re still unsure about revisiting Facebook advertising or are convinced the platform isn’t a good fit for your offering, consider this:
Moving your products depends on reaching your audience where they are. With 79% of internet users (that’s 68% of all U.S. adults) using Facebook, it’s a platform you can’t afford to ignore.
So, whether you’ve exhausted your retargeting leads or want to grow your sales quickly and cost-effectively, give lookalike audiences a try. They can breathe new life into your bottom line.
Let us help your business make it easier to find new customers—talk to a digital strategy expert today!