Facebook Lookalike and Custom Audiences 101: The Beginner's Guide

One of the most powerful targeting features in Facebook Ads is the ability to create custom audiences. In this first part of our guide, we'll explore what custom audiences are, why they are so impactful, and how to leverage them in your ad campaigns.

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What are Custom Audiences?

Custom audiences allow you to target your Facebook ads to specific groups of people that you already know or have an existing relationship with. For example, past customers, email list subscribers, loyalty program members, etc.

Why Custom Audiences Matter

• Targets ads to people more likely to be interested and convert

• Allows personalization of messaging to customer groups

• Helps retain and reconnect with existing contacts

• Enables higher relevance level over broad targeting

How Custom Audiences Can Boost Performance

Targeting custom audiences can significantly boost performance for Facebook campaigns. Because custom audiences consist of people who already have a relationship with your business or exhibit high intent, they are more likely to engage with and convert from your ads. Leveraging custom audiences enables higher relevance for your messaging, which drives better clickthrough rates, lower cost per conversion, increased return on ad spend, and ultimately more revenue. The added relevance makes a major impact across all key advertising metrics. Custom audiences help ensure your ads get in front of people already primed for your offering, leading to improved campaign results overall.

Because custom audiences consist of ideal prospects or proven converters, targeting them with ads can:

• Increase overall conversion rates

• Lower cost per result

• Improve click through and engagement

• Allow higher return on ad spend

The added relevance drives better campaign performance.

Benefits of Using Custom Audiences

In summary, key advantages include:

• Higher ad relevance

• Increased engagement

• Lower cost per conversion

• Ability to directly reconnect with customers

let's explore how to create different types of custom audiences.

Creating Custom Audiences

There are several sources you can use to build custom audiences:

Customer Files

• Upload customer contact files and target past buyers.

Website Visitors

• Use the Facebook pixel to create audiences of recent site visitors.

CRM Contacts

• Integrate your CRM and make audiences from those contact lists.

Email Lists

• Sync your email subscribers to target with Facebook ads.

Event Attendees

• Build audiences of people who attended your events.

Loyalty Program Members

• Target groups like loyalty program members with status tiers.

App Users

• Create audiences based on mobile app activity.

Video Viewers

• Retarget people who have watched your video content.

Best Practices for Custom Audience Sources

• Prioritize your highest-intent groups like customers.

• Keep audiences large enough for volume - 1,000+ is ideal.

• Refresh old audiences or let inactive ones expire.

• Follow Facebook's recommended list requirements.

What are Lookalike Audiences?

Lookalike audiences allow you to find new potential customers who share common qualities with your existing custom audiences.

Facebook lookalike audiences allow you to find new potential customers who share common qualities with your existing customer base. You select a source custom audience, and Facebook then identifies other users who have similar demographics, interests, and behaviors to build a new audience.

Lookalike audiences are built using advanced data science to locate new customers who resemble your current audience base, allowing you to market to prospects that are more likely to convert.

Lookalike Audience Sizes

The Percentage size tells you how many people from the selected location will match with your list. You can choose the size you prefer.

• 1%: Very tight group of the selected location population

• 2-10%: Larger pool for more scale

Benefits of Lookalikes

• Expand reach efficiently by targeting lookalikes of proven converters

• Cost-effective way to drive lower funnel actions

• Keeps ad spend focused on ideal customer profiles

Lookalikes vs. Broad Interest Targeting

Lookalikes often outperform interest targeting alone. The additional relevance drives higher conversions. But you can combine both.

Best Practices

• Test lookalikes from different custom audience sources.

• Gradually expand lookalike size for more reach.

• Layer lookalikes on top of interests for precision.

In previous parts, we explored creating custom and lookalike audiences. Now let's discuss strategies for using them together effectively.

Custom Audiences for Conversions

Use custom audiences directly for conversion objectives:

• Targeting proven converters lowers cost per purchase

• Makes retargeting existing contacts easy

• Allows personalization for known groups

Lookalikes for Awareness

Apply lookalikes earlier in funnel to tap into new demand:

• Attract totally new prospective customers

• Generate interest in your brand, content, offers

• Gradually ramp up lookalike size for awareness

Layer for Precision

Combine lookalikes with interests for precision:

• Interests add relevance to lookalike targeting

• Lookalikes help expand limited interest audiences

• Together they provide scale with precision

Monitor Performance

Check metrics by audience source and optimize:

• Evaluate custom audienceConversion rates, cost per result

• Assess lookalike audience reach, frequency, impressions

Continually refine your audience targeting strategy based on actual data.

Applying custom and lookalike audiences at the right stages of your funnel is crucial for maximizing Facebook ad performance. Test and scale the combinations that deliver results.

Frequently Asked Questions

1. How large should my custom audiences be?

Aim for 1,000+ people per custom audience if possible for optimal volume and performance.

2. How often should I refresh my audiences?

Plan to update your custom audiences monthly by syncing your newest contacts or re-uploading your lists.

3. What is the ideal lookalike audience percentage?

1-3% for tighter fit, 3-5% for moderate breadth, 5-10% for mass reach. Test to see what converts best. The percentage is about the location population.

4. Can I create different lookalikes from the same source audience?

Yes, you can create multiple lookalikes of different sizes from a single source custom audience.

5. Should I use broad interest targeting or lookalikes?

Lookalikes tend to outperform interests, but you can combine both for greater precision.

6. What is more important for lookalikes, size or source?

The source custom audience is most crucial to ensure relevancy. Gradually expand size once proven.

7. How often can I alter or update audiences?

You can edit and override custom audiences at any time. Lookalikes regenerate on their own.

8. Do audiences expire eventually?

Yes, custom audiences expire after 180 days unless refreshed. Lookalikes expire after 365 days.

9. Can I create audiences of website visitors across multiple sites?

Yes, you can use cross-domain tracking in the Facebook pixel to aggregate visitors.

10. What tips help ensure audience performance?

Upload high-quality lists, utilize multiple sources, layer targeting, and test lookalike percentages.