Lookalike audiences are used in digital marketing to target new people that share similar characteristics to an existing audience. This feature helps businesses to find new users they can better convert using their similarities in terms of demographics and interests to an existing audience. It was initially developed by Facebook Ads but has since expanded to be used on other platforms like Google, LINE ads, and Taboola.

How It Works

You need to first identify a source audience, it’s important to note here you can only build a Lookalike audience from a custom audience (1st party data). You can choose from any aspect of your digital marketing lists including visitors that click through to your website, page fans and repeat customers. You will need to generate a list of at least 100 people to be able to eligible. The larger a list you have to start with, the more data that can be used to create a detailed picture of what audience you want to target.

Next, you need to set the lookalike audience size. Most channels will give you a sliding scale from 1% – 15% this represents the size of the audience in relation to the target country. For example, if a country has 5 million users, a 1% Lookalike will be roughly 50,000.

Example of how you can choose the audience size on Facebook Ad Lookalikes

A larger audience will mean a broader reach, with less precise matching. This approach may be more suitable for larger companies that do not mind targeting an audience with more varied similarities. Smaller businesses may prefer a smaller lookalike audience that has more similar characteristics to their existing audience.

You can match the audiences based on such demographics as location, age, and gender. If you later want to broaden your audience, you can use the lookalike expansion tool to have the ad shown to people beyond the defined lookalike profiles. The ads will not be targeted to any of the profiles included in your source audience.

How to Make Best Use of Lookalike Audiences

Test your audience size

It can be difficult to determine what size of an audience will offer the best chances of conversion and boosting sales. It may be a good idea to start small and gradually grow your audience size.

Line Ads also has a scale of 1 – 15%

The benefit of a small audience is that it will more closely match your existing audience. As you broaden your outreach, the similarities become less matched, but may still lead to conversions.

Be more precise in constructing lookalike audience seeds

Lookalike audience seeds that are more closely related to existing audiences offer the best chances of conversion.  Look for the most consistent behaviours that your already converted audiences have to create your source list. Smaller businesses that may not have as much data to tap into may seek to broaden their choices by looking at those that have traveled furthest down the sales funnel. For instance, audiences that have completed watching demo videos or have left items in their online shopping baskets.

You can build lookalike audiences from any custom audiences you already have.

For businesses with a larger amount of data to work with, it can help to define seeds using CRM data. These are customers that have already been converted and bought other products and can be targeted for new ones. 

Align audiences to campaign goals

You can create a variety of lookalike audiences based on differing parameters. Depending on what you are seeking to accomplish, you can target different lookalike audiences. When promoting a quick sale, it may be best to focus on lookalike audiences that have engaged with your platform in the last month. This may indicate they are at a more heightened level of interest and more likely to convert with discount offers.

Update your data

Ensure that the customer profiles you use to develop your lookalike audiences are as current as possible. The demographics of the customers that appeal to your products or services can gradually change. You can use date range parameters to target profiles that visit your website within the last 1-3 months. This can help in updating your lookalike profiles dynamically every few days and ensure that anyone added to your lookalike audience is better matched.

Expand outreach

For businesses looking to penetrate new markets, it can work to build lookalike audiences from profiles of clients in their existing markets. This can give a helpful head start when entering a new market.  This can gradually be better refined as new customers are converted in the new market, as you introduce location as part of the demographics to build the source audience.

Benefits of Lookalike Audiences

Better ad campaign results

Even with a great advertisement, the true evidence of a successful campaign lies in boosted sales. However, when you can target a more receptive audience that you know is similar to the clients you already have, your chances of success are higher. It makes it easier to appeal to this target segment you are already familiar with and know how to engage with to convert.

Adjustable audience size

The lookalike audiences tool allows marketers to control the percentage match between the source and targeted audiences. This gives us better control over the quality and number of targeted audience members. The more similarities there will be, the smaller the audience. This higher degree of similarity can however mean greater chances of conversion. So depending on your goals and the size of your business, it can be more beneficial to keep the audience narrower or broadened.

Greater value from your investment

Businesses collect a ton of data from their clients and often do not know how to use it to attract more customers. Lookalike audiences are a great way to exploit data they already have to define target audiences and bring their products and services to the attention of an audience that is unknown but offers great potential for conversion. It is also highly affordable as the data is not bought, simply used in new ways to profit the business.

Sustained conversion rates

Since the business is targeting audiences that are similar to their existing clientele, there is a lower risk of failure to convert. Although unknown, lookalike audiences are a rich source of potential leads built on data collected from audiences that have previously proven receptive to earlier ad campaigns.

If you have any questions on Lookalike audiences or help with Digital Marketing in general, speak to one of the team at Phoenix Media today and we’ll be happy to assist you.

  • Published on : Tuesday December 7, 2021

About the author

As the managing partner for Phoenix Media, Rob brings over 10 years’ experience in digital marketing and running successful agencies in the UK, Australia and Thailand. Starting in a sales role he has covered all aspects of the agency from sales and service to technical ad operations. Reach him directly on rob@phoenixmedia.co.th

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