March 13, 2017
Facebook Lookalike audiences are composed of people who share the same basic characteristics of your current customers. You can build Lookalike audiences from a multitude of sources, including either a customer list, pixel data, mobile app data, or fans of your Facebook Page.
Lookalikes have many layers. This makes them powerful, but also often more difficult to operate unless you’re experienced. We’re here to guide you through best practices we’ve learned after years of using them.
Lookalikes are Consistently the Best Performing Audience Type
After analyzing tens of millions of dollars in ad spend, here’s how performance stacks up by audience type on Facebook:
- Lookalike audiences had the Best CTR in 80% of campaigns
- Lookalike audiences had the Best CPI in 60% of campaigns
- Lookalike audiences had the Best CPA in 60% of campaigns
As a result, we find that Lookalikes frequently make up >60% of overall spend in our campaigns.Though it’s fun to be creative in researching targeting options – from “people recently engaged” to people who are fans of the Starbucks page – the results suggest that keeping Lookalikes front and center is best practice in most cases.
Lookalike Sources: The Possibilities are (nearly) Endless
The source is the original audience group you are attempting to replicate through building a Lookalike audience.
Imagine you have an app that lets people book restaurants. You could use sources to generate Lookalikes such as:
- A list of people who have booked >10 restaurants lifetime
- A list of people who joined from a recent promotional campaign
- A list of people who have booked >3 Japanese restaurants
- All the followers of your page on Facebook
- People who have watched >50% of a video you posted on Facebook recently
The possibilities are nearly endless. Facebook supports source files that contain over a dozen different types of data, from e-mail to mobile ad ID, which it will try and “match” on. The best practice is to include as many pieces of information as possible to improve match rates. Average match rates vary, but you should aim for at least 50% match.
Lookalike Sources: Which to Choose?
The importance of the source of Lookalikes cannot be overemphasized. Lookalikes are, after all, the direct result of your input.
Which type of Lookalike source should you prioritize? After looking at thousands of campaigns with hundreds of Lookalike options, here are the top source types we identified, with examples from our fictional restaurant app:
Lookalike Sizes: 1% Truly is Best
A 1% Lookalike is telling Facebook to find the top 1% of people on Facebook that look like your original source file. This should result in the most relevant audience, but it also creates the smallest Lookalike size. A 10% Lookalike, on the other hand, is larger but potentially less relevant.
Which Lookalike size is best? After thousands of Lookalike campaigns, we found that 1% or 2% Lookalike sizes drove the best CPA performance 67% of the time. Larger Lookalikes have a place in allowing you to reach broader audiences and spend more easily, but they shouldn’t be relied upon to drive the best performance.
Lookalikes are Always Improving
As powerful as they already are, Facebook isn’t content with the current state of Lookalike audiences. They are relentlessly rolling out new updates to increase adoption and allow for more control. This is, after all, one of the most important parts of their entire advertising platform. Here’s what’s new lately:
- New Sources of Page, Video, and Ad Engagement – You’re now able to build audiences based on activity directly related to your Facebook page. This opens open countless new sources, such as: people who watch >3 seconds of a video you post, people who click fill out a Lead Ad, or people who click on any call-to-action in your posts.
- International Support – Now, you can reach customers in new countries using lists from another country. With this, you can target international markets that share characteristics with the existing audience in your home country. Language barriers and cultural differences may get in the way of developing these audiences, but Facebook Lookalikes pushes past that to get to the core similarities.
At Bamboo, we trust Lookalike audiences to increase the reach and accuracy of our campaigns. We have seen massive success resulting from this targeting type and we encourage you to see how it can impact your ad campaigns.
Here’s a recap of the 5 tactics we recommend to fully take advantage of Lookalike audiences:
- Lead with Lookalikes – In most cases, the majority of your budget should go towards Lookalike audiences.
- Test through multiple sources – With countless variations available, spend time pulling in audiences from your customer lists, fan pages, and more to see which performs best
- Prioritize sources built around top purchasers – More often than not, the source list of your best current customers will produce the best Lookalike
- Stick to 1-2% Lookalikes for best performance – While larger % tiers offer greater reach, the quality of these audiences will likely be less than smaller 1% or 2% segments.
- Follow along and test out new Lookalike updates early – Adopting new Lookalike updates can pay off and give you a leg up
Interested in taking your Facebook advertising strategy to the next level? Learn more about Bamboo’s Facebook advertising expertise and services >
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