Lookalike Audiences

Lookalike Audiences

Lookalike Audiences is a term used to describe a group of social network users who have similar characteristics to others in a group. Essentially, lookalike audiences find the commonalities between existing customers and the existing audience.

In the advertising realm, a lookalike audience is used by digital marketers as an advertising targeting tool. Lookalike audiences help advertisers reach potential customers who may have similar behaviors and interests as the existing customers. By grouping audiences that are similar to existing customers into a lookalike audience, advertisers can target their ads towards lookalike groups for better ad performance. The lookalike audience approach can save advertisers time and money.

When used as a marketing tool, a lookalike audience helps find and target customers with high potential who may not have otherwise been identified. With lookalike audiences, advertisers can expand their potential audience and reach higher quality leads.

So how does it work? A lookalike audience needs to establish a consistent behavioral pattern in order to be effective. Essentially the seed of the lookalike audience needs to be homogeneous. This will determine the lookalike audience’s effectiveness more than sample group size will. It all comes down to identifying a homogeneous quality and behavior that’s consistent among the entire group.

While a homogeneous seed is critical for the effectiveness of the lookalike group, size still plays an important role. For small companies or startups, lookalike groups may not be as effective due to a small sample (the existing audience). The small sample size could skew the results and lead to inaccurate audience data.

A sample size audience of about 1,000-5,000 people will usually yield the best results. Though be aware that the quality of your audience is equally as important to the success of the sample size. So instead of choosing your best customers for the sample size, make sure you include all customers.

Creating Lookalike Audiences

When creating a lookalike audience, you have the ability to select how closely you want your new audience to match your source audience. The percent range you choose will determine how similar your potential customer audience will be to your current customer audience. With a smaller percentage you’ll get an audience that more closely matches your current customer – but the group will be smaller. With a bigger percentage you’ll reach a bigger audience, but you may see less homogeneity.

The bottom line is, if you want to create a successful lookalike audience, the first step is having an existing customer audience. A lookalike audience isn’t possible without the basis of a current customer audience for comparison. Once you have this, you’re ready to start creating a lookalike audience for ad targeting.