What is a lookalike audience?

Lookalike audiences are a powerful tool in digital advertising that helps businesses find new potential customers. Imagine you have a group of your best customers, the ones who buy frequently or engage deeply with your brand. A lookalike audience uses the data from these existing customers to find other people online who share similar characteristics and behaviors. Essentially, it helps you reach more people who are likely to be interested in what you offer, even if they haven't interacted with your business before. This process works by feeding information about your "seed" or source audience into an advertising platform, like Facebook Ads or Google Ads. The platform's algorithms then analyze common traits among these people – things like demographics, interests, and online activities. Based on this analysis, the platform creates a new, much larger audience of users who "look like" your original source audience. This allows you to expand your reach beyond your direct customer base, targeting individuals who are statistically more likely to convert, subscribe, or engage with your marketing efforts.

Why it matters

Lookalike audiences are incredibly valuable for marketing teams because they make your advertising more efficient and effective. Instead of broadly targeting demographics or interests, which can sometimes be hit-or-miss, lookalikes let you focus your ad spend on people who closely resemble your proven customers. This precision can lead to higher conversion rates and a better return on your advertising investment.

Enhanced targeting precision

Traditional targeting methods might cast a wide net, reaching many people who aren't truly interested. Lookalike audiences, however, refine this process significantly. By building on the foundation of your most valuable customers, these audiences allow platforms to pinpoint users with a higher propensity for conversion. This means less wasted ad spend and more relevant impressions for your brand. It's like having a detailed map to find treasure, rather than just guessing where it might be.

Scalability for reach

One of the biggest advantages of lookalike audiences is their ability to scale. While your custom audience (your existing customers) might be limited in size, a lookalike audience can be much larger, sometimes reaching millions of people. This allows you to expand your marketing campaigns significantly without sacrificing targeting quality. You can reach a vast new pool of potential customers who are likely to respond positively to your ads, helping your business grow.

How lookalike audiences are created

Creating a lookalike audience starts with a "source audience" or "seed audience." This is the group of people you want to emulate. The quality and relevance of this source audience are crucial for the success of your lookalike.

Selecting your source audience

Your source audience can come from several places:

• Customer lists: Upload a list of your existing customers, especially those who have made high-value purchases or are loyal.
• Website visitors: People who have visited specific pages on your website, like product pages or a checkout confirmation page.
• App users: Users who have taken specific actions within your mobile app, such as completing a tutorial or making an in-app purchase.
• Engagement audiences: People who have engaged with your content on social media, like liking your Facebook page, watching your videos, or interacting with your Instagram posts.

The more specific and high-quality your source audience, the better the lookalike audience will perform. For example, a list of customers who have made multiple purchases is usually better than a list of all website visitors.

The platform's algorithm at work

Once you provide the source audience, the advertising platform's algorithm gets to work. It analyzes hundreds or even thousands of data points about the people in your source audience to identify common characteristics. These can include demographic information, interests, online behaviors, and even connections to other pages or groups. The algorithm then searches its vast user base to find other people who share these identified traits, creating your lookalike audience. You usually specify a percentage (e.g., 1% to 10%) of a country's population you want the lookalike audience to represent, with smaller percentages being more similar to your source.

Best practices for using lookalike audiences

To get the most out of lookalike audiences, it's important to follow some key strategies.

Start with a strong source audience

The foundation of any successful lookalike campaign is a high-quality source audience. Aim for a list of at least 1,000 to 50,000 active, engaged users who represent your ideal customer. If your source audience is too small or contains irrelevant people, the lookalike audience won't be as effective.

Test different lookalike percentages

Most platforms allow you to choose the size of your lookalike audience, often expressed as a percentage of a country's population (e.g., 1%, 5%, 10%). A 1% lookalike audience will be the most similar to your source audience but smaller. A 10% lookalike will be larger but less similar. Test different percentages to find the sweet spot that balances reach and relevance for your specific campaign goals.

Exclude your source audience

It's usually a good idea to exclude your original source audience from your lookalike campaigns. This prevents you from showing ads to people who are already your customers or who you are targeting through other means. It ensures you're truly reaching new potential customers and avoids ad fatigue for your existing ones.

Combine with other targeting layers

While powerful on their own, lookalike audiences can be even more effective when combined with other targeting options. For example, you might create a lookalike audience of your best customers and then layer on an interest in a specific product category or a particular age range. This can further refine your audience and improve campaign performance.In summary, lookalike audiences are an indispensable tool for expanding your reach and finding new customers efficiently. By leveraging the power of your existing customer data, you can create highly targeted campaigns that drive better results. Experiment with different source audiences and lookalike percentages, and always monitor your performance to optimize your strategy.