Lookalike Audience generally means an "algorithmically-assembled group of social network members who resemble, in some way, another group of members". In digital advertising age, it refers to a new targeting tool for digital marketing, first initiated by Facebook, which helps to reach potential customers online who are likely to share similar interests and behaviors with existing customers. Since Facebook debuted this feature in 2013, additional advertising platforms have followed suit, including Google Ads, Outbrain, Taboola, LinkedIn Ads and others.
Considerations for Lookalike Audience
Lookalike audiences anatomize existing customers and their user profiles to find the commonalities between the existing audience. This helps to find highly-qualified customers who previously would have been difficult to identify and reach. This expands the potential audience in different countries and applies to new differentiated audience segments; This approach saves time and lowers advertising costs for the acquisition of a new audience.
In order to be effective, a lookalike audience seed needs to homogeneous. This is commonly achieved using a consistent behavioral pattern. The homogeneity of the lookalike seed has a greater influence on the audience's effectiveness than the size of this sample group. In Facebook, the minimal lookalike seed size is 100 users from the same country. Facebook generally recommends creating a seed from an audience of 1,000 to 50,000 users.
Examples of Lookalike Seeds
Marketers use many data sources to create lookalike seeds. Some examples of eCommerce lookalike seeds include:
- CRM Based - A seed based an email or phone number list of customers who have had a past interaction with your business. This can be further segmented, for example customers with the highest lifetime value or past purchases of a specific product.
- Conversion Based - A seed based on users that have performed an action such as a Purchase or Lead form submission on the website.
- Engagement Based - A seed based on users segmented by their engagement like pages viewed, time spent on the site, video views etc.
How It Works
Facebook, as an example, takes three steps to build a lookalike audience:
- Choose the audience seed to build a lookalike audience from. This can range from page fans, visitors to the website, and customer lists etc.
- Choose the specific location (country or region) you wish to find a similar audience in.
- Customize the audience size. Facebook offers a range of percentiles from 1% to 10%, indicating the size of the combined population of the locations selected. Larger audiences provide a wider reach, but a smaller lookalike audience is more targeted, which means ads are seen by fewer people, but they are likely to be better aligned to the features of the audience's seed.
Progressive or Unethical?
It has been proved by scholars that the tool of lookalike audience, to some degrees, does well in generally advertising results. And it is also listed as an important trend of pay-per-click (PPC) by Delhi School of Internet Marketing. However, debates about such a 3rd party behavioral targeting used for digital marketing never stop either because using big data of customers is anyhow against online privacy settings.
In 2019, limitations have been put in place to stop discriminatory targeting of audiences according to zip code, income levels and demographics (age and gender).
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