How to Create Facebook Lookalike Audiences (& Scale Your Business)
- Wes McDowell
- October 5, 2018
One of the best ways to get cold traffic to your website is through Facebook ads. They offer a lot of really cool targeting options, but none is more effective than the lookalike audience. Now, after analyzing tens of millions of dollars in ad spend, lookalike audiences had the best click through rates in 80 percent of campaigns and the lowest cost per acquisition in 60 percent of campaigns, which means you can get as creative as you want and coming up with new and innovative ways of targeting new customers, but your best bet is just going to be to input your current customer list and let Facebook do the hard work of duplicating those people and finding them for you.
It’s just going to get you better, much more accurate results. So let’s start by defining what exactly a lookalike audience is in its most basic form. Facebook starts with a list of people who have taken some kind of action with your business already. It then uses the hundreds of data points that it has on every single user and it basically comes up with a bunch of matches that come as close as possible to those original people. He uses things like basic demographics, interests, and just the overall likelihood that they are going to take the same action as well.
Now there are a few ways of making a lookalike audience. One is from a customized audience of people who have viewed any of your videos or interacted with your Facebook page in any way, but by far the most powerful is by uploading a spreadsheet of email addresses of your current and past customers and there’s a new feature that they’ve added to this that can make it even more powerful, which we’ll get to in a minute.
So let’s go over a few basics. You’ll need to get started. So first of all, you can start with a general email list of subscribers. Let’s say you have a lead magnet and people have just opted in. You can use that list, but it’s always going to be much more powerful if that list is actual customers. So think about a, do you want to advertise to people similar to the people who’ve opted in for a free piece of content? Or would it be much more beneficial to be able to advertise to people that are just like your paying customers? And one question I always get is how big does this initial listening to be? Well, Facebook’s technical requirement is you need at least 20 people, but that’s generally not nearly enough for them to do a good job of, uh, of finding lookalike. So what I recommend is a list a thousand people or more, if you have it, several hundred admitted mum, anything less than a few hundred a year likely just going to be wasting money and you’d probably be better off just using, using more traditional, uh, targeting options like basic demographics, location and interests.
Okay, so now I want to go over to the computer and give you a peek over my shoulder basically to see exactly how to set up your Facebook look alike audience for maximum impact, including the new feature that’s going to allow it to be even more powerful. That’s pretty new. All right, let’s jump into it.
Okay. So the first thing you’re going to want to do is just go to the ads manager within Facebook. And to get there, just go to Facebook.com/ads manager. Okay? So in order to set up your lookalike audience, you’re going to go back up to where it says ads manager and you’re going to click on audiences and then just click on create audience. Creating a lookalike audience is actually a two step process. The first thing we have to do is create a custom audience that they’ll look alike. Audience is built off of. So let’s go ahead and click custom audience and now we’ve got some options. So there’s many ways you can create a custom audience for Facebook. So the first one is customer file, which is what we’re going to be doing, which is where you’re basically uploading a list of your customer’s website traffic.
So if you have the Facebook pixel installed, you can actually build a custom audience of people who have been to your website or even as specific as any individual page on your website. Now, this is also a great way of making a custom audience of customers because let’s say you have an online store and once someone buys something, they go to a thank you page. You can actually have this set up to make a custom audience of everybody who got to that thank you page, which means they ended up being a customer and there’s APP activity. So if you have an APP, it’s anyone who’s, uh, who’s used it offline activity, I have not really used this one yet, so we’re going to skip that. And engagement is basically just a way to target anybody who has interacted with either your Facebook page or watched a video ad or anything like that.
So, but let’s go back up to customer file. That’s what we’re really going to be talking about today. And now you’ve got another couple of options again. So in this first case you can just upload a list of email addresses or a spreadsheet of emails, names, phone numbers, all the information you have on. The second option is if you use mailchimp as your email program, you can actually import all that data right from mailchimp. And, uh, this third option is what we’re going to be getting back to it a little bit. It’s similar to the first option, but it has a little bit of a twist that might make it perform even better for you. But to start, let’s just go to the first option. Okay. So here is where it’s going to give you the opportunity to upload all your customer information. So, uh, the first thing you need to do is select the origin of the upload.
So basically there’s a few options here. One is saying from customers and partners, this means you got this information directly from your customers and maybe you have some of this information that you paid for from a data agency. The second option is all directly from your customers. And the third one is you basically bought all these email addresses, um, in this case, uh, and kind of what Facebook wants is the second option. They want to know you’ve got it directly from your customers. And then from here I’m just going to drag and drop a CSV file right in there. And all that file is, is a spreadsheet of one column of email addresses that is it. And make sure that the audience has a name. I’m just going to leave it example, email this for now and then click next and that would basically just wants to know that that this column is to do with email addresses, which it is, and if you have a more complex spreadsheet that has a column of email addresses and a column of first names, last names, phone numbers, zip codes or whatever that is, that’s going to come up here below and it’s just going to like give some samples and then it’s gonna make you choose.
Okay. These are the email addresses or these are the first names. These are the last names. These are the zip codes, so just basically as a way of mapping the information correctly, but in this case it’s a simple a spreadsheet of just email addresses. So I’m going to click upload and create. Okay. And it’s saying it was uploaded but with error, which is common, which just means some of the email addresses in there are not a arrive, they’re not formatted correctly or not matches with the, with Facebook users, which is to be expected. But we have 2025 rows up bloated. So I’m good enough to get started. So now it gives you a next steps option where it says create a lookalike audience. Perfect. So let’s go ahead and click that. And it’s already going to bring up example email list as the source. Remember, that’s the custom audience we just uploaded.
Now it’s going to give you an option for location. So what they want to do with a lookalike audience, you can only do one country at a time. So pick the country. In this case, it’ll be the United States. And the next thing is okay, and here’s where it gets a little interesting. So it wants you to pick an audience size and I’ll explain this um, as easily as I can. So basically what they’re asking for is, of all those people on that list, do you want us to find the one percent of the population of the United States that’s most similar? Um, or do you want the top two percent? And see how the, the audience size keeps getting bigger. So at two percent we’re at four point 3 million people and you can go all the way up to 10 percent, which tells Facebook I want the 10 percent of Americans who were as similar to my list as possible, and this of course, gives you a bigger number, but it makes the targeting a little less pinpointed.
So what I always recommend is start very small with one percent that gives you an estimated reach of over 2 million people, which is almost always enough to get started. Then if you find that that’s working really well and you want to kind of scale your ads up, you can go and do this again and bring it up to two percent and so on. That will double your audience and you can keep going this way until you start seeing that your cost per lead is going way up. That’s when you know it might be a good idea to take a step back and give up a certain audience size for a much more pinpointed targeted audience. So let’s go ahead and leave it at one percent for now. And then just click create audience. Okay, so what it’s doing now, we’ve got that email, for example, email list, which is the custom audience which is still updating.
It’s still finding everybody and then once that’s done, then the look alike audience can start building. Both of these steps individually, can take anywhere from an hour up to. I’ve seen it take as long as 24 hours before. So you know, step away from the computer, get some coffee, eat some lunch, and then come back to it and see where you’re at. What you’re looking for is for it to save ready, just like that. So once you get to that point, now your lookalike audience is ready to use and you can go ahead and create your ad. But remember I promised you an interesting tweak that you can add to this to make it even more powerful. So let’s go ahead and check that out real quick. So we’ll go back over to create audience, custom audience, customer file, and now we’re going to go with this third option customer file with lifetime value.
So with this option is, is that it still allows you to upload that spreadsheet or that CSV file with all your customer information with one additional column, which is lifetime value. So let’s go ahead and take a look at what I mean. Okay. So this is obviously just an example customer list. I’ve only got a few a fake names on here, but so it’s got your no first names, last names, email addresses. You could have phone numbers on here, zip codes, anything that will help Facebook match more people to its database. But then you’ve got this column here, lifetime value. So let’s say you own a flower shop and you know about half your customers only come in once they buy one bouquet of flowers and you really never see him again. But then you’ve got certain customers who come in every week and spend a certain amount of money.
And then you’ve got certain customers who may have hired you to take care of all the flowers for an entire wedding. So what this allows you to do is not only tell Facebook, hey, go get me a bunch of other customers that are just like my customers, but it allows you to prioritize. So basically you’re telling Facebook, get people like my customers, but really put an emphasis on this one who spent $3,000 over a lifetime and this is the kind of thing that Facebook is really good at it. It’s getting better at it all the time. So when you can put in lifetime value. So let’s say, you know, Tom has spent $24 over the years. Patricia has spent $3,000 over years. It’s much more beneficial for you to find more people like Patricia, right? And you know, it may or may not be feasible for you to add these values.
Maybe you don’t really have good records of it. And if you do, it might actually take a long time, uh, actually putting these values into the spreadsheet. But this is something that’s easily done by a virtual assistant or someone in house. Um, and I, I think it would be well worth the time if you have those kinds of records laying around or if you have an ecommerce store, you should be able to export this list with all those lifetime value’s already inside of it. Now, a few important things to note, they do want you to just basically format it like this, uh, without dollar signs. They definitely don’t want you to do commas for thousands. So it would just be the number would just be three zero, zero without the comma and cents are okay as well. So as long as you keep the commas out of it, I think everything should be okay. Now, let’s go back to the ads manager and you’re going to name this audience. Let’s call it example, lifetime value. And then you would just go ahead and you would upload that audience right here. Again, select the origin of the upload and you would just click next. Next,
I will hopefully that got you excited about setting up your very first lookalike audience. One of my best performing campaigns I’ve ever run was based off of lookalike audience and I can assure you how powerful it really can be, but now I want to hear from you and I want to know if you have any questions about any of this or any tips that I may have missed. If so, go ahead and leave it in the comment section below. I’ll read all of them and I’ll answer as many questions as I possibly can.
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