Facebook Lookalike Audiences: What Marketers Need to Know

How to Find Your Best Customers with Facebook Lookalike Audiences

Introduction
As a marketer, one of your key goals is reaching the right audience with your message. But finding new potential customers who are likely to be interested in your product or service can be a challenge. That‘s where Facebook lookalike audiences come in.

Lookalike audiences are a powerful way to reach new people who are similar to your existing customers or fans. When you create a lookalike audience, Facebook identifies the common qualities and interests of the people in your source audience, then finds more people who share those qualities. This allows you to expand your reach to high-potential prospects you may not have been able to target otherwise.

In this post, we‘ll dive into exactly what lookalike audiences are, how they work, and how you can leverage them to drive more conversions and revenue for your business. Plus, get expert tips and best practices to maximize your results.

What are Facebook Lookalike Audiences?
A lookalike audience is a type of custom audience you create using Facebook Ads Manager. To generate this audience, Facebook takes a source audience of people you select, identifies its key characteristics (like demographics and interests), then finds more people who are similar to them.

You can think of lookalike audiences as an expanded version of your source audience. The source acts as a "seed" that Facebook uses to find more high-quality prospects based on its algorithm.

Facebook generates the lookalike audience in the country or countries you specify (it doesn‘t have to be the same location as your source). You can also choose the size of your lookalike audience, from 1-10% of the total population in your selected countries. A smaller audience, like 1%, will more closely match your source, while larger audiences are less precise but have greater reach.

The Benefits of Lookalike Audiences
So why invest time into creating lookalike audiences for your Facebook ad campaigns? There are a few key reasons:

  1. Expand your reach to quality prospects. Lookalike audiences allow you to grow your customer base and introduce your brand to new people. But unlike broad targeting by age or gender alone, you know these prospects share important characteristics with your existing customers, making them a warmer audience.

  2. Improve your ROI. By showing your ads to people who are more likely to be interested, you can increase your conversion rates while lowering your customer acquisition costs. Many businesses report lookalike audiences outperform their other targeting segments.

  3. Save time on audience research. Researching your target customer and building the right audience in Facebook can be time consuming. Lookalike audiences streamline the process by automatically finding the best prospects for you based on your source audience.

  4. Learn more about your audience. Creating lookalike audiences can reveal new characteristics and interests that many of your customers share, which can help inform your messaging, offerings and targeting. For example, you may find your lookalike audience has an affinity for certain brands or publications, even if you hadn‘t explicitly targeted those interests before.

How to Create a Facebook Lookalike Audience
Ready to get started with lookalike audiences? Follow these steps:

  1. Prepare your source audience. Facebook requires a minimum source audience of 100 people from a single country to create a lookalike. However, sources with 1,000 to 50,000 people tend to perform best. You can use a customer list (uploaded to Facebook via a CSV file), your Facebook pixel data, app activity, or fans of your page as a source. The quality and recency of your source audience has a big impact, so aim to use recent customer data where possible.

  2. In Facebook Ads Manager, navigate to the Audiences tab and click "Create Audience." Then choose "Lookalike Audience."

  3. Choose your source. This can be a custom audience you‘ve previously created, your pixel data, fans of your page, or an offline event set. You can also create a new custom audience using a customer file.

  4. Select the country or countries you want to find a similar audience in. This doesn‘t have to be the same as your source audience location.

  5. Choose your audience size, from 1-10% of the total population in your selected countries. Start with 1% for the closest match to your source, or go higher if you want to increase your reach.

  6. Click "Create Audience." It may take up to 24 hours to generate your lookalike audience. You‘ll be able to see it in your Audiences tab and use it for ad targeting when it‘s ready.

Pro tip: You can create multiple lookalike audiences from the same source with different locations or audience sizes. This allows you to customize your reach and test what performs best.

Best Practices for Using Lookalike Audiences
Simply creating a lookalike audience doesn‘t guarantee success – you‘ll need a strong strategy to get the most from this targeting tool. Follow these best practices to maximize your results:

  1. Use high-quality source audiences. The better your source audience, the more effective your lookalike will be. Make sure you‘re using an engaged, relevant group for your seed, such as recent purchases or most active users. Avoid audiences that are too small, outdated, or include people who aren‘t actually interested in your business.

  2. Experiment with audience size. While 1% lookalikes most closely match your source, they also limit your reach. Test different sizes (like 1%, 2%, 5% and 10%) to find the right balance of relevance and scale for your goals. If your priority is volume, a larger size may work better.

  3. Layer lookalike audiences with other targeting options. While lookalike audiences are often effective on their own, you can make them even more powerful by combining them with Facebook‘s demographic, interest and behavior targeting. For example, add an age range or specific interest to your lookalike audience to narrow it down to the most relevant prospects.

  4. Tailor your creative and message. Your lookalike audience may be similar to your existing customers, but they still don‘t know your brand yet. Experiment with different ad creative and copy to introduce yourself effectively. Highlight social proof, explain your unique value proposition, and use a clear call-to-action to drive action.

  5. Measure, learn and optimize. Pay close attention to how your lookalike audiences perform compared to other targeting segments. Use Facebook‘s Audience Insights to learn more about their characteristics and identify new opportunities. Continually refresh your lookalikes as you grow to find new pockets of prospects.

Examples of Lookalike Audiences in Action
Many businesses have found success with lookalike audience targeting, from ecommerce brands to mobile apps to B2B companies. Here are a few examples:

  • An online retailer created a lookalike audience based on its highest-value customers over the past 6 months. They used this audience to promote a new product line, generating a 5x return on ad spend and a 30% lower cost per acquisition compared to their usual targeting.

  • A mobile gaming app used lookalike audiences based on its most active users to drive new app installs. They tested different audience sizes and found the 5% lookalike performed best, bringing in users who were more likely to make an in-app purchase.

  • A B2B SaaS company used its customer list to create a lookalike audience for lead generation. They paired the lookalike with interest and job title targeting to ensure relevance, and saw a 20% increase in lead quality and a 10% decrease in cost per lead.

While your specific strategy will vary based on your business and goals, these examples show the potential impact of a well-executed lookalike audience campaign.

Conclusion
Finding the right audience is a critical part of any successful Facebook ad campaign. Whether you‘re looking to grow your customer base, drive more revenue from your best customers, or simplify your customer acquisition, lookalike audiences are a powerful tool to have in your toolbox.

By leveraging your existing audience data to find new people with similar characteristics, you can expand your reach while keeping your targeting relevant. Combined with compelling creative and a strong offer, lookalike audiences can help you get the most out of your Facebook ad budget.

Remember to continually test and optimize your approach – and don‘t be afraid to think outside the box with different source audiences or layering additional targeting on top of your lookalike. With the right strategy and execution, lookalike audiences can become one of your most effective weapons for Facebook advertising success.