What are custom audiences and lookalike audiences?
As a marketer or advertiser, Facebook lets you re-target your customers with a customized message or offer using custom audiences. All you have to do is upload a list of your offline audience data and Facebook will match customer phone numbers and email addresses from this list to Facebook accounts through a hashed system to deliver targeted ads to these people on Facebook. Marketers can further sub-target a segment by demographics, interests or actions.
Going a step further, Facebook also introduced Lookalike audiences. In this type of targeting, Facebook carefully selects people who are similar to your custom audience list based on an algorithm calculation.
Such users will be more likely to show interest in your products or services thereby posting a better conversion rate. You can target lookalike audiences along with custom audiences for a larger reach. However, remember that your custom audience base must be at least 1000 in order for lookalike audience to work effectively.
An analysis of 5,000 Facebook campaigns across more than 200 Facebook advertisers done by Marin reveals that:
1) Advertisers who increase investment in Custom Audiences targeted creatives could decrease their overall Facebook advertising CPCs.
2) Advertisers who increase investment in Custom Audiences targeted creatives can decrease their overall Facebook advertising CPA.
3) Facebook users are more likely to purchase from advertisers they have previously engaged with.
What types of ads work well with custom and lookalike audiences?
You can create both RHS and Newsfeed ads – however if you’re objective is engagement led then newsfeed ads tend to work better and if you’re looking for a higher reach in a limited time choosing RHS will give you a better result – as it is seen to receive more number of impressions and clicks.
Benefits of using custom and lookalike audiences
1) Improve the quality of your fans – since custom audiences and lookalike audiences comprise of users who have previously shown interest in your product or service or are most likely to show interest in the future, the quality of these users is better than the quality of users achieved through other means like normal RHS ads.
2) Convert one time visitors or buyers to loyalists – You can build a connection with people who have just visited your site once, attended a webinar or seminar or purchased your product in the past by targeting them through custom audiences on Facebook. Once they like your page, you can talk to them based on their purchase history and even turn them to be your brand evangelists.
3) Increase your ROI – ROI from custom audience ads is said to be 25X more than ROI from ads with normal targeting.
4) Learn from insights – As you grow your custom audience set, you will eventually track which segments are giving you quality visitors and accordingly alter your other marketing initiatives from these learnings.
5) Expand your reach – In case of lookalike audiences, you can expand your reach to target interested users quickly.
6) Finally, using custom audiences is a powerful way of getting your existing customers to like your page and grow your following.
Segment categories that you can create
You can get as creative as you want with your segments. Here are some examples to get you thinking!
– Website visitors (top funnel)
– Website visitors (lower funnel)
– Converted users (0 – 1 yr)
– Converted users (1 – 5 yrs ago)
– Recurring customers
– Customers from social media sources
– Customers from search/ display
– LinkedIn Connections
– Email marketing list
– SMS text messaging list
– Unsubscribers
– Email non-responders
– Loyalty card holders
– Holiday season hoppers
– Contest participants
To sum up, businesses are beginning to use Facebook Custom Audiences feature rapidly to meet marketing objectives. Get started today if you haven’t already. Incase you’re looking for help on where to begin, contact us now!