Facebook offers powerful audience targeting tools to reach the people that matter most to your business. With nearly 2 billion people using Facebook, the traditional marketing method of ‘spray and pray’ approach does not work. This is especially true when you need to target the right audience and measure true return on advertising spend.
There are a number of basic audience targeting parameters advertisers can use like demographics, location, interests and behaviours. However the most interesting one is the advanced audience targeting offered by Facebook; Lookalike Audiences.
This tool is giving brands impressive conversion rates whilst helping to reduce total CPA.
The Lookalike Audience is about the most effective tool for enhanced targeting. It goes beyond basic demographic and interest targeting. It’s a way to reach new customers who are likely to be interested as they are similar to your existing customers. A powerful tool to find new customers.
Lookalike Audience uses source data to find similar people based on:
- Custom Audiences
- Website Visitors
- Page Fans
First you will need to set up your source data. How you set these up is important. Below we provide a few pro tips for each type:
You can create a Custom Audience either using email addresses or phone numbers.
Here are a few advanced tips for best results for finding people similar to your customers:
- Create a custom audience between 1,000 to 50,000 of your best customers rather than all your data. I.e. customer list based on lifetime value, transaction value, total order size or engagement.
- Source data should include at least 1000 people from a single country you are targeting.
- Create multiple Custom Audiences and narrow down your audience. As you are able to create up to 500 different Lookalike audiences from a single source audience.
- Set up a Custom Audience to target a different country. You don’t need to have anyone from the country you targeting in the Custom Audience e.g. you have a source audience of 15,000 from England, you can create a Lookalike Audience of similar people in Finland.
Ensure you’ve created a pixel and inserted this onto a page where actual conversations take place i.e. checkouts, registrations, leads, key page views or customers adding items to a cart.
A few advanced Pixel configuration setup tips:
- Insert Event codes e.g ‘Thank-You’ page. Add the code between script tags and do not change the base code.
- Add a sales funnel of Event codes such as Viewed Content > Added To Cart > Purchased. This helps to record all actions taken by the user.
- Include value and currency parameter for each Event code. This helps to calculate the total cost per action and your return on ad spend. For example: if you know the conversion is valued on average $10 and 10% of people who reach the ‘Thank-you’ page are likely to convert. The value placed is $1 on people who reach this page.
- Enable the advanced matching feature. Changing the code to include hashed customer data (email address, phone number etc). Using hashed identifiers will give you greater conversions. During the beta testing phase Facebook experienced a 10% increase in attributed conversions and 20% increase in reach for retargeting campaigns.
Engagement on a Page
Create a Custom Audience with people who have engaged with content on your Facebook Page.
Includes creating a list of people who spent timing viewing your videos, or opened a Lead Form, or viewed a Canvas.
You can also set up a Custom Audience with people who have interacted with your Page such as those who saved one of your posts, sent you a message, clicked on a call-to-action button. Or those liked, commented or shared a post.
Using this type of Custom Audience, will ensure you reach new people who are most likely to be similar to those already active on Facebook with similar interests.
Once you’ve created a source you can go onto creating a Lookalike Audience.
There are a number of ways you can set these up for best results. We’re going to outline these below.
This is a new feature that Facebook recently introduced. You can now create a Lookalike audience to target either different markets or multiple countries.
Now you can sell to the entire world. You do not need complex data reports in order to target people similar to your current customers, but in a different country.
You are also able to further narrow your targeting down by demographic targeting such as age and gender etc. Plus the ability to exclude existing customers. For best results utilize the ‘tiered lookalike’ feature. For example using different bidding strategies for each grouped audience.
One important point here to note, and it’s repeated several times by Facebook is this:
Target one country per ad campaign.
This will boost the performance versus running many campaigns targeting multiple countries. By doing so, the Facebook system will make sure your ad gets served to the right people as your campaign progresses.
Why is this?
If you target multiple countries per ad campaign. The population of all countries is combined to form a single audience. Therefore the more customers who match the seed audience in example Country A, the Facebook system will then create a Lookalike audience with more people in Country A than Country B. As per below illustration:
Create A Set Of Lookalike Audiences
Create separate Lookalikes audiences with different ranges of similarity to your source audience. This will allow you to bid differently based on their conversion performance.
Two essential tips:
- By creating a set of audiences you are able to optimize your bids. These audiences do not overlap so you won’t need to exclude an audience. For optimal results create a minimum of at least 3 sets of audiences.
- Audiences are set up based on percentage of similarity and are adjustable. For example: the first audience will be 0-1%, second 1-3% and the last and least similar being 3-6%. The last audience will have much higher reach but less likely to be similar to your source.
Once you’ve created your audience, you should do the following to get the best out of this audience:
- Create the same ad and target each of the separate lookalike audience with initial bid.
- See how well they perform based on revenue per conversion.
- Then modify your bids based on bidding more for higher valuable audiences.
Dealing With Overlapping Audiences
Having overlapping audiences can lead to poor delivery of your ad sets. Because when both of your ad sets end up in the same bidding auction, Facebook enter only the ad set with the best performance. This prevents any other ads from showing. This is to avoid ads competing against each other.
To check overlapping audiences go to ‘actions’ > ‘show audience overlap’.
- The first audience selected is listed at ‘Selected Audience’. Other audiences selected will then be compared against this audience. You are able to change ‘Selected Audience’.
- To get the best results choose an audience with at least 10,000 people.
The tool shows both the “Overlap” and the “% Overlap of Selected Audience.” For example: you have selected an audience with 1 million people (Audience A) and compared to audience with 100 million people (Audience B). There are 800,000 people in both audiences. The number 800,000 remains constant no matter which audience is selected. But the percentage overlap will change. Audience B overlaps with 80% of audience A. If audience selected changes the overlap is then only 8%.
If your audience overlap is causing issues consider one of the following options:
- Consolidate. If ad sets are targeting similar audiences, consolidate into one with a larger budget to see better results.
- Refine targeting. Use location, age, gender, interest and/or behavior-based targeting to ensure each ad set has a precise audience.
Both these options are opposite ways of solving a problem. The best choice will vary for each situation. Keep in mind if two audiences are distinct enough try keep them separate and refine them further.
The only way to find new customers is by using Facebook’s Lookalike audiences. It’s super specific targeting allows you to target people similar to your existing customers. This is a sure way to efficiently spend your advertising budget and guarantee real return on investment.