What is a Facebook Ads Lookalike Audience? How is this targeting option transforming the digital advertising landscape? How can you use it for your business? An expert explains.
Article Difficulty Level: Intermediate
I do a lot of one-on-one Facebook Ad training sessions with business owners, and one of my favorite things to do is go over the ads that they have already run before they came to me. I have yet to see a single business owner using Lookalike Audiences (also known as an “LLA”) when I first review their performance to date. I love seeing the gears turn and their eyes slowly widen as I explain what a Lookalike Audience is and what they can do with it.
Lookalike Audiences are a very complicated animal, but they can be explained fairly easily. Basically, you are taking a core group of people that you’ve generated through an online activity, and telling Facebook to find a certain percentage (between 1 and 10%) of all people in a specific country that are MOST similar to that core audience. Then, you can narrow that down further with other forms of targeting, such as geographic.
FOR EXAMPLE: You have a booth at a large convention. You use Geographic Microtargeting to target ONLY the people inside the convention with a short live video of you in front of your booth inviting them to come check you out. 200 people watch that video. Using Lookalike Audiences, you then begin to run ads to the 50,000 people in your state that are MOST similar to those 200 people. The best part? All of this happens automatically. No more guessing what your ideal demographic is.
How does this work?
Facebook has an average of 10,000 data points on every single one of its users – including you. They don’t just have what you give them. They buy large amounts of data from third party groups – like credit card companies. They attach your info with those companies to your info on Facebook to build a comprehensive profile on you. Lookalike Audiences takes the common denominators in your core group, and finds everyone else in the country with those common denominators.
You can easily create Lookalike Audiences. Simply go to your Ads Manager on Facebook on your desktop by clicking the drop down menu on the top right of your page and selecting “Manage Ads”. If you’ve never run ads before, you’ll need to select “Create Ads” instead and go through some basic setup steps before being able to run ads. In order to keep this post as relevant as possible, I will be assuming that everyone reading this article has a basic understanding of how the Ads Manager works. In the top left corner of your Ads Manager, click the drop down menu and select Audiences. You’ll need to create a Custom Audience first – this is your core audience. Select “Create Audience” and “Custom Audience.” You should see this pop-up:
You have several options for creating a Custom Audience. You can use a customer file, website traffic using Pixel data, app activity, offline activity, and engagement. Most people will only ever use the customer file, website traffic, and engagement options. Offline activity is still being rolled out as of the publishing of this article, and app activity is only useful for developers. I’ll refrain from going through a detailed step-by-step instruction at this point, although I’ll try to come back and do that later when I have more time.
Once you’ve created your Custom Audience, go back to your Audiences section, select “Create Audiences” again, but this time select “Lookalike Audience.” In this screen, you’ll select the Custom Audience that you just created as the source, and pick your geographic area and how wide you want the audience to be. Always start off with a small number and exhaust that audience before expanding. You can always come back and create a larger audience later, so I recommend starting with 1% or 2% for your initial test run. However, the exception to this rule is this: if you plan to run your ads to a very small geographic area, you should raise this number higher. Otherwise, you may not have enough people in your target audience to have any significant impact
Don’t worry about the lack of detailed geographic targeting. You can still set that at the Ad Set level. Keep in mind though, that when you narrow your audience down geographically in the Ad Set level, or by creating a Saved Audience, this will select the people that are in your Lookalike Audience that are also in that geographic area. It will NOT select the 1% (or 2% or whatever you set it at) of people in that geographic area that share common denominators with your Custom Audience. I say this so that you won’t be confused when the numbers of people selected in that area are far larger or smaller than the percentage that you set in your Lookalike Audience relative to the number of people total in that geographic area.
FOR EXAMPLE: Let’s say that you have a well-established plumbing business with 2,000 customer e-mail addresses in your database. Now, assuming that all 2,000 of those have opted-in to receiving communications from you, you can upload that list to Facebook and create a lookalike audience off of them. Since you’re a local company, you set the LLA at 10%. You drop a pin on your business location and say you want to advertise to a 50-mile radius. Now, instead of 1,000,000 people, you are targeting the, say, 120,000 people who are most like your existing customers – without having to do any research into who those customers actually are. You can now run ads to those people without wasting any money on the rest of the population – only spending your resources where you know they’ll be the most effective.
Lookalike Audiences are powerful. They allow you to dynamically expand your current customer, engagement, or visitor base into a larger group of potential customers. This ensures that your digital advertising budget will be spent efficiently and that your engagement rates will be high – providing, of course, that your messaging is on point.
Questions? Feedback? Comment below. I’d love to hear from you.