When talking of advertising, there is warm traffic, when people already know about your business and cold traffic- people that haven’t engaged with you before. And clearly, it's important to bring new people from this cold traffic into the sales funnel. Selecting a cold audience on Facebook, you have two options: to use interests and demographics or to use a Facebook Lookalike Audience. Lookalike is very simple and fast to create so let's find out what exactly it is.
A lookalike audience is a way to reach new people who are likely to be interested in your business because they’re similar to your best existing customers. - says Facebook. Clear enough. Facebook creates an audience relying on your customers' data, you just provide a source audience. You can choose the percentage, so a 1% lookalike will consist of people that most closely match the source audience. This is the most concentrated part of matching users.
One of the advantages of lookalike audiences is that they are being updated every 3-7 days so you don't have to keep creating them.
To get an idea of how accurate is the Facebook interest categorization, check your own "interests" on Facebook. For this go to the Settings menu, then Ads, and you will see "Your interests".
Some of the interests will be highly accurate and correct but still a lot of Facebook's data might be outdated or Ads Manager might have misinterpreted certain signals. So you cannot totally rely on interest categorization.
Facebook lookalikes are really quick to create. Click the Business Manager, then the Audiences section, the blue Create Audience button and finally select the Lookalike Audience option.
To start creating an audience choose the source audience, country and percentage. It will take about 10 seconds and here it is! These audiences are free to create, so move on and create several audiences of different percentages.
What does Facebook use to create these lookalike audiences?
- User behavior on Facebook and Facebook services, including activity in groups
- Profile data such as age, gender, and location
- Pages liked
- Ads clicked on and pixel data
There is no exact formula of Facebook lookalike in our mind, but taking into account Facebook's pixel on millions of websites and data in general, combinations of likes, comments, shares and so on, these audiences have to be of real significance.
A value-based lookalike audience is based on data generated by the Purchase pixel event.
There are two advantages over standard purchase audiences:
- Your best and worst customers are sorted by value
- The recency of the data and the frequency of purchases are taken into account. Now you are able to combine the value AND recency AND frequency to create an audience.
The source audience normally should be at least 1000 people. When you have enough people in your audience you will be able to segment it down to find the most matching.
For different countries and regions the percentage of lookalike audience might differ. Just because of the size of these audiences. Sometimes 1% lookalike can be 2 millions and sometimes it's about 40 thousand users. We recommend starting with 1% audiences and later move on to the larger percentages to reach more people.