What are Lookalike Audiences, and How Should You Use It?
With the proliferation of the internet and e-commerce, more and more people are moving towards online purchases. Of them, countless people have never heard of your brand. However, many of those people will be inclined to buy from you if you target them with relevant marketing messages. So, how do you reach these potential high-intent customers while staying within your cost per acquisition (CPA) target? One strategy is to build lookalike audiences/ similar audiences for your campaigns.
What are Lookalike Audiences?
Lookalike audiences help you find users whose demographics and interests are like those of your most valuable customers. They allow you to market to prospects who are the right fit for your products. This way, lookalike audiences help you scale your marketing campaigns and provide numerous benefits like
- Wider campaign reach
- Better conversion rates
- Easier campaign management
- Efficient targeting
You can use lookalike audiences feature on platforms like Facebook, Instagram, Google, and LinkedIn, discussed in detail later in this article.
How to create Lookalike Audiences?
You can create lookalike audiences using data (audience seed) from the customer database. The audience seed can comprise anyone who has bought from or searched on your website in the past. Attributes of the seed (location, demographics, engagement, and purchase history) are used to create lookalike audiences. These audiences are likely to be interested in your products and become high-value customers.
You can use below customer segments for creating the audience seed.
- High Lifetime Value: This segment consists of the creme de la creme of the customer base, the top percentile in terms of lifetime value. This strategy works best for acquiring high-value customers.
- Highest Cart Value: This segment consists of customers who checked out with particularly large carts. This creates a lookalike that is likely to repeat this binge shopping pattern. This strategy is especially effective in the seasonal / holiday context.
- Add to Carts Events: This segment consists of visitors who added a product to the cart. They have not purchased the product yet but clearly show the purchase intent and sense of immediacy. This strategy works best for remarketing.
- Product Page Views: This segment consists of visitors who have visited the product pages, and spent a considerable amount of time reviewing the product details. You should make sure that you eliminate those who might have visited the pages accidentally by using data on scroll depth, average time spent. This kind of segment works best when you are launching new products.
Platforms to Use Lookalike Audiences:
Facebook’s Lookalike Audience feature leverages information such as demographics, interests, and behaviors from your source audience to find new people who share similar qualities. When you use Lookalike Audiences, your ad is delivered to that audience of people who are similar to (or “look like”) your existing customers.
Google Ad’s Similar Audiences targeting feature, like the lookalike audiences in Facebook, helps you expand the reach of your campaigns by showing ads to users who have similar characteristics as your best-performing customers.
Similar audience targeting is available for the Display Network, the Search Network, YouTube, Gmail, Customer Match, and apps.
Google Ads finds similar audiences by scanning millions of apps and sites on the Display Network. It will update similar audience lists in real-time using machine learning capabilities; the lists can adapt dynamically to changing markets and trends.
LinkedIn lookalike audiences use a proprietary algorithm to build upon your selected audience. LinkedIn member profile data and company attributes are used to determine similarity to expand to audiences based on similar characteristics. Your lookalike audience size can be up to 15 times larger than your original audience size. The original Matched Audiences segment will not be included in your new lookalike audience.
Lookalike audiences are an effective way to take your advertising to the next level. They help you target the right kind of audience through relevant ads.
However, one approach to creating lookalike audiences does not fit all. You should test all the different ways of creating lookalike audiences mentioned above and find out what works best for you. Later, you can scale the successful campaigns and reach out to wider audiences with better efficiency.