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.
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I am an odd business owner that does use all the benefits mention above. Still, I’m yet to understan the advanced option in the LLA creation of choosing several percentages. Could you please explain it? Thank you for this great blog.
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It is for A/B testing, and for expanding an audience once it’s exhausted. If you choose 1 percent, you can eventually exhaust your audience, so you can go higher once you’re done with that audience.
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Thanks for this Trey.
I’m running a 1% LLA campaign for a client based off 1k of his “just sold” customers in his mailchimp account i.e. people who have recently purchased an extended vehicle warranty.
USA (live in USA) audience and it targets nationwide.
The ad is producing average $0.90 p/click over a 7-day period ($50 daily advertising budget) Relevancy score around 7 and a CTR (all) of 3.55%.
But I’m kinda stuck there with what to do next? Any simple tips?
Thanks.
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Russell,
Whats your ad frequency? Total audience size? Have you started to experience ad fatique yet?
If you’re running a nationwide audience, $50/day on a 1% LLA should last a long time. Once that’s exhausted I’d run to a 2% LLA and see how that works. Really depends on your total audience size.
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Thanks for the reply!
Ad frequency is @ 1.22
The potential reach is 2.1m (1% LLA) which is likely too big = (M&F 18-65+) as I haven’t yet ‘tweaked’ because I wanted to see how a simple 1% LLA of existing customers would work according to FB’s standard LLA audience.
I feel I need to look at the Age & Gender breakdown and do something with those results…
Last 7 days = $0.90 per click.
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It sounds like you’re on the right track! Keep doing what you’re doing and analyzing results. Use the demographic cost breakdown of your results to see if you should narrow by gender or age, and use Audience Insights to look for interests and other things. I probably wouldn’t narrow any further in the 1% but once you start exhausting that, you can try narrowing it and/or adding on higher percentage LLAs with narrowed demographics.
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Thanks so much Trey – really helpful! I just need to understand the age/gender breakdown more and what to actually do with that data…
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Look at your Cost Per Action for each age group and gender, and I bet you’ll see some trends. If you’re paying 0.45 for women and 1.00 for men, you can narrow it down to only women when you expand your LLA audience, for instance. At 1% LLA I wouldn’t worry about narrowing too much but once you figure out what genders and age groups respond best to your product and messaging, you can expand your LLA a lot wider and just target that subsection without losing too much efficiency.
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Thanks Trey – I will take all this advice on board! So lastly, would you recommend doing separate LLA adsets e.g. 1% – (1-2%) – (2-3%) – (3-4%) etc etc…?
I will look at narrowing using the engagement feedback from the ad manager.
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Yes, absolutely. There’s no disadvantage to doing so, and if you don’t segment accordingly you lose some flexibility when constructing your audiences. You can add as many custom audiences to a saved audience as you want, so doing so allows you to specifically choose the exact percentage you want every time.
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Hi Trey, wonderful blog! I’m a new reader of your blog. Kept me hooked for the last 3 hours.
I’m from Indonesia. I don’t normally ask much, would prefer to test it myself, but you seem like a decent man whose opinion I can trust 🙂
Facebook has an article on best practice for a Customer File.
https://www.facebook.com/business/help/606443329504150
Below, you’ll find tables listing all the data types we can use for a Custom Audience or offline event upload. To get the highest match rate possible from your data, include as many data types as you can.
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Reposting comment as I accidentally sent the earlier one.
Hi Trey, wonderful blog! I’m a new reader of your blog. Kept me hooked for the last 3 hours.
I don’t normally ask much, would prefer to test it myself, but you seem like a decent man whose opinion I can trust 🙂
Facebook has an article on best practice for a Customer File.
https://www.facebook.com/business/help/606443329504150
Below, you’ll find tables listing all the data types we can use for a Custom Audience or offline event upload. To get the highest match rate possible from your data, include as many data types as you can.
The issue here now is:
– My wife’s business is selling premium pre-loved/second hand branded bags. It’s doing good.
– We are from Indonesia. Customers here prefer to transact via WhatsApp. No website, no FB page. People don’t use emails as much too. We only have IG page for the bag store, where IG is the dominant platform in this niche, for both customer and seller.
– The only customer details she has is only their phone number. By now, she has approximately 100+ phone numbers of paying customers
– Also, her customer and like many Indonesians with long names, and due to our culture, often times they don’t use their Full Name (as per their birth certificate). Sometimes, they use their nicknames.
– Sure we have options to request the existing customers to fill up a form that gives as much details as possible to align with Facebook best practice, that is something that I’m considering.
I am curious to hear your thoughts – based on your experience knowing how FB operates,
– if it’s worth testing LLA if I only have 100+ customer’s phone numbers (the bag business)
– if it’s worth testing LLA if I only have 30+ wholesale customer (this is for my own business)
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