How to Target the Most Profitable Audience on Facebook: Lookalike Audiences

Are you looking for new ways to reach potential customers? Look no further than Facebook lookalike audiences.

With lookalike audiences Facebook can connect your business with people likely to be interested in your products/services. That way, you’re not advertising to people who are completely wrong for your offer.

A lookalike audience on Facebook is one of the more impactful aspects that Facebook ads offers. It’s been a game-changer for anyone advertising on Facebook to reach their target audience fast. The result? Higher conversion rates.

In this article, we’ll explore why lookalike audiences are so important for businesses that are using Facebook ads. We’ll also guide you through how to build a lookalike audience for your business and share why investing in ads for your business is a good move. 

What Are Facebook Lookalike Audiences? 

Facebook lookalike audiences are a powerful targeting tool used to reach people with similar characteristics to your existing customer base. 

This targeting technique creates quality leads for your business based on existing clients. This list could include previous customers, website visitors, or app users. For lookalike audiences Facebook finds similarities in age, gender, interests, location, language, and other demographic data to find new customers. 

Lookalike audiences can be used in combination with other targeted audiences to increase the effectiveness of your Facebook Ads strategies.

Another advantage of Facebook lookalike audiences is that they are easy to set up. You need to choose the source audience and size of the lookalike audience, and Facebook will do the rest.

Why Are Facebook Lookalike Audiences Important?

Facebook lookalike audiences are an important tool for reaching new potential customers and increasing ROI. They make it much easier to find new leads that share similarities with those already interacting with your brand.  

There are several benefits of Facebook lookalike audiences:

Cost Efficient Marketing

You can create a custom audience that saves you money on your marketing campaigns. If you’re marketing to people similar to your current customers, you’ll need to use less marketing budget to convert them.

Using Facebook audiences, you can create an efficient client acquisition funnel to target all the right people. The algorithm will do all the hard work for you. It will ensure only high-quality leads are receiving your marketing message.

Better Targeting 

In addition to being a great tool for businesses to reach new customers, Facebook lookalike audiences can also be used for various purposes, such as brand awareness, lead generation, and conversion optimization. 

Facebook’s algorithm allows you to target an audience that shares similar interests, behaviors, and demographics with your current customers. This means you can create highly personalized ads that resonate with your target audience. Ultimately leading to a higher ROI.

Improved Engagement 

By reaching a more relevant and engaged audience, you can improve engagement rates, leading to more conversions and sales.

How To Create A Lookalike Audience On Facebook (Two Variables)

There are two variables to consider if you’re looking to create a lookalike audience on Facebook.

1. Quality of The Source

The first step in creating a lookalike audience on Facebook is creating a source list. You need to ensure that the data you’re using for the source list is up to date. The better the quality of your source list, the more accurate a lookalike audience Facebook can create.

A good source list for a lookalike audience on Facebook Ads should have the following characteristics:

Large & diverse: The larger and more diverse the source audience, the more accurate the lookalike audience will be. A source list with at least 100-1000 people is recommended.

Relevant: The source audience should be relevant to your target audience and the products or services you’re advertising. For example, if you’re advertising a fitness app, your source audience should be made up of people who are interested in fitness.

Engaged: The audience ideally is engaged with your brand, such as having visited your website or engaged with your Facebook page. 

Recent: The source audience should be as recent as possible to ensure that the lookalike audience will still be relevant.

Clean: Remove any duplicate, fake or low-quality accounts from your source list before creating your lookalike audience.

2. Ideal Avatar (Customers You Are Looking To Attract)

The next step is to define your ideal avatar: What customers are you looking to attract? Create an image of your ideal customer, including age, gender, location, and interests. 

Having a clear idea of who you’d like to target with your marketing means Facebook lookalike audiences are highly relevant. That way, you take the data from the source audience and add in the extra target demographics when you’re adjusting the audience.

One thing to note is that as your services evolve, so too will your ideal avatar. Maybe your avatar from one year ago isn’t totally relevant to your current offering. Adjust as needed, according to your current state of business.

By considering these two variables, you’ll build a lookalike audience on Facebook that accurately represents your target audience. This leads to improved ad performance and higher ROI.

Why Is It Important To Use A List Of People When Creating A Lookalike Audience?

Using a list of people when creating a lookalike audience on Facebook is important for several reasons:

Better Targeting

By using a list of people as the source for your lookalike audience on Facebook, you can ensure that your target audience is closely aligned with your ideal customer. This will help you reach a more relevant and engaged audience, resulting in higher ROI for your ad campaigns.

Increased Accuracy

By using a source list of people for your lookalike audience, Facebook has access to more data about those individuals. This allows Facebook to create a more accurate custom audience. Data is king, and using these facts (rather than your own intuition) is always the best approach.

Better Understanding of Your Target Audience

Facebook will help you gain a deeper understanding of your target audience when they have a list of your current customer base. You can use this information to inform future ad campaigns and improve your overall marketing strategy.

Improved Ad Performance

All of these things inevitably lead to improved ad performance. The individuals in the lookalike audience Facebook creates will be more likely to engage with your ad.

Lookalike Audience Facebook Percentage Of Similarity

The Percentage Of Similarity (also known as the lookalike coefficient) measures how closely a lookalike audience matches an existing list of contacts or users. 

It’s a value that represents how closely the new lookalike audience Facebook has created matches the original audience.

A 1% lookalike audience would be very similar to the source audience. A 10% lookalike audience would be less similar.

You can set your own percentage of similarity when creating your lookalike audience. The higher the percentage, the more similar your new reach will be. As the percentage increases, the audience size decreases. A 10% audience would offer a broader audience. 

Choosing a percentage of similarity is a balancing act. You want a relevant and specific new audience but a large audience size.

How To Build A Facebook Lookalike Audience

Here’s a step-by-step guide on how to set up a Facebook lookalike audience if you’ve never done it before:

Create A New Source (Customer Audience)

To create a new source for your lookalike audience, go to the Facebook Ads Manager and select the “Audiences” tab. Click on the “Create Audience” button, and in the dropdown, choose “Lookalike Audience.” Then, you’d choose your source. One source could be the “Custom Audience.” Upload a list of existing customer details (your best 1,000-5,000 customers based on transaction values, for instance). 

Select Your Audience Location 

Once you have created your new source, you can select the location of your audience. You can choose to target specific countries, regions, or cities. This will help you reach the people who are most likely to convert.

Select Audience Size

Next, select the size of your audience. You can choose to target a small, medium, or large audience. A small audience will be more specific and targeted. But a large audience will reach a broader range of people.

Target Specific Demographics

You can also target specific demographics, such as age, gender, and interests. You might want to create different types of lookalike audiences for each Facebook advertising campaign.

Create Your Ad

Once you have set up your Facebook lookalike audiences, you can create your ad (use our winning ad formula to get started). You can choose from various ad formats, such as images, videos, carousels, and more. Make sure to include a clear call-to-action, too, to help convert your new customers.

Note: it could take 6-24 hours for a lookalike audience to be created.

How To Optimize Your Lookalike Audience On Facebook

With lookalike audiences, Facebook does most of the hard work. But there are still ways you can help to help the algorithm and boost ROI. 

  1. Select High-Quality Sources: Don’t fall into the trap of adding all customers to your source audience, as bigger is not always better. To achieve valuable lookalike audiences on Facebook, focus on your best customers. 

For example, use active email subscribers instead of your entire email list. That way, you are extracting from a source of interested people and using their data to help you find other people most likely to be interested.

  1. Test Bids with A/B Testing: Create multiple lookalike audiences with varying levels of similarity to your source audience. Find the most effective one with A/B testing.

    Start by targeting the same ad to each audience and evaluating performance with metrics like revenue per conversion. Modify bids for each audience based on performance.
  1. Be Creative with Source Audience: Evaluate your campaign goals and create custom audiences based on the most relevant parameters.

Ideas include video audience (based on those who have engaged with your videos), recent website visitors, or email audience (newsletter subscribers).

Lookalike Audience Facebook: FAQs

Where can I find high ROI Facebook interests audiences?

To find high ROI Facebook audiences, you should create a lookalike audience that targets interests related to your products/services.

Can you still do lookalike audiences on Facebook?

Yes, the lookalike audience Facebook tool is still a powerful way to target potential customers on the platform. Facebook lookalike audiences have become even more powerful with recent advancements in the platform’s algorithms and targeting capabilities. 

You can create a lookalike audience by uploading a customer list, website visitors, or a custom audience. Facebook will automatically create a new audience based on the similarities between the individuals in your source list and other users on the platform.

Facebook lookalike audiences are now available in different sizes, allowing you to choose the similarity percentage between your source list and the lookalike audience. This means you can create highly targeted audiences tailored to your specific business goals.

How Many People Do You Need For A Lookalike Audience?

The number of people you need for a lookalike audience depends on the size and complexity of your marketing campaign. Generally, you should start with at least 100 contacts or users as the source list to compare different variables. This should create lookalikes who are likely to engage with your marketing campaigns. 

Facebook Audiences Facebook: The Bottom Line

Facebook lookalike audiences are an effective way to target potential customers who share similar interests and needs as your existing customer base. By leveraging the lookalike audiences Facebook algorithm, your marketing efforts are rewarded. You’ll connect with relevant and engaging audiences likely to benefit from your products/services. 

To maximize results, it’s important to have a good source list. It can be difficult to define the target audience right for your offer.

Scaling With Systems can help you nail your offer and marketing strategy by creating client acquisition funnels that generate high-quality leads for your business. Your growth potential is infinite if you’re using the right systems. 

See what we can do for your business by booking a free consultation call today with one of our experts.

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