15 May 2018

3 Tips for Running Successful Lookalike Campaigns on Facebook

Lookalike audiences in Facebook Ads have gained a ton of popularity over the last few years and have quickly become a useful tool in the digital marketing industry. They can identify new, relevant audiences while investing minimal time in choosing who to target.

But, just because we can create new targeting with the click of a button, doesn’t mean they’re going to perform well. In fact, I’ve seen many unstructured and messy lookalike campaigns perform terribly when they had potential to be the best performing campaigns in the account.

If you’ve tried lookalike campaigns and they didn’t produce the results you wanted, don’t give up just yet… There are a few strategies that can turn your lookalike performance around!

These are 3 tips that will help you set your lookalike campaigns up for success from the ground up:

1. Prioritize which lookalike audiences you want to test

First things first… not all lookalike audiences are the same. I often see marketers mistakenly choose a random source and ambiguous audience size when creating lookalike audiences. Facebook allows a variety of options to create lookalikes, but that can also lead to an unsuccessful campaign. Let’s cover some basics before diving into priority:

  1. You can create lookalikes based on custom audience sources. Custom audiences can be anything from website traffic to people who have spent time watching your videos. The foundation of a relevant lookalike audience is the source you choose from.
  2. You’re required to choose the audience size in which you want your lookalike to mirror. Facebook gives us the options 1-10%, 1% being the closest match to your audience source, and 10% being the least.
Lookalike-Audience-Campaign-Create

What audience source should you use and when?

When deciding what sources to draw from, prioritize lower funnel traffic first and work your way up. The best place to start for a successful lookalike campaign is with the people who have already converted (submitted a lead form, downloaded gated piece of content, made a purchase, etc.).

You can create a custom audience of these people by going into the ‘Website Traffic’ section of custom audiences, changing ‘All Website Visitors’ to ‘People who visited specific web pages’ and pasting the confirmation URL into the contains box. This will create a custom audience of everyone who has taken a conversion action on your website.

Lookalike-Audience-Campaign-Specific-Web-Pages

What audience size is most efficient?

Once you’ve created our custom audience source, choose the audience size. The audience size is dependent on the location and radius you want to target. If your location targeting is very small, you want to allow more % to reach a larger audience – and vice versa – if your location targeting is broad, you should use a smaller % audience size. For example, if you’re targeting the whole state of California, you should create a converter lookalike audience with 1% audience size because the location is so broad.

Lookalike-Audience-Campaign-Source

And just like that, you’ve created the most qualified lookalike audience that will serve as first-priority. If you have additional budget, I recommend identifying where your next best area of qualified traffic is to test along with your “converter” audience. Typically, they are customer file uploads taken from your CRM, website traffic, or page likes.

These can also be considered first-priority lookalikes, but remember, these audience sources are less qualified than your “converter” audience. Once they’ve proven to be effective, or if you have additional test budget, you can start increasing the audience size which would be second priority and so on.

Key Takeaway

Identify your most qualified sources of traffic and create a small % audience size lookalike. Prioritize which lookalikes are worth putting money into first and which ones can wait for later.

2. Correctly structure your lookalike campaigns

Once you’ve identified what source and audience size to use, it’s important to structure the campaigns in a way that allows Facebook to optimize your goals. I see marketers group too many lookalike audiences together in a way that doesn’t allow you to identify what audiences work and which ones don’t.

For example, someone might include 1-2% lookalike converters, page likes, and website traffic, all in the same ad set. The problem? Facebook doesn’t allow you to break out performance based on each lookalike if they’re all included in the same ad set. So, if the campaign does not perform well, how do you know which audience is the culprit?

Sample Lookalike Audience Campaign Structure

To prevent this from happening, I recommend the following campaign structure:

3-successful-tips-for-successful-lookalike-audience-campaigns

The basic idea of this campaign structure is to group each campaign by your lookalike audience source and have the ad sets be the different audience sizes. This structure has 2 key benefits:

  1. You’ll have a clear understanding of how each lookalike audience performs individually. If you see that the 3% lookalike doesn’t perform well, you can try different tactics like changing ad creative, layering in interest targeting, or maybe pausing that lookalike altogether. The point is, you’ll have clear data to make actionable decisions off.
  2. Facebook has a reasonable audience size to optimize for your goals. By breaking up ad-sets into smaller groups of people, Facebook has less opportunity to show your ads to an irrelevant user. If you have a restricted budget and are targeting 6.3 million people, the chances of you showing up in front of the right audience is much higher.

Key Takeaway

Break out your audience sources by the campaign and your ad-sets by audience size. This allows for more granular analysis and lets Facebook optimize more efficiently.

3. Analyze, optimize, and keep testing

Facebook is quick with optimizing campaigns based on your goals, so you don’t have to wait for months before making any changes. I recommend allowing your lookalike campaigns to run for 2-3 weeks (depending on your traffic volume) which should give you enough data to start identifying areas for optimization.

Let’s look at some metrics and tools we can use to turn our lookalikes from good to great:

The Frequency Metric

Facebook defines frequency as, “The average number of times each person saw your ad.” This tells you how many times your ad was shown to the same person over your selected time frame given your allocation budget.

This metric is particularly powerful because it gives you an idea of how far your dollar reaches and how much further it can go. Anything above ~2.5 frequency means you’re serving the same ads too often and you want to reduce your budget to avoid over-serving to the same people. Anything between the ~1-1.9 range signifies you can increase the budget and potentially get the same return.

If you’ve identified a lookalike campaign that performs to your desired cost per acquisition (CPA), look at its frequency and up the budget if there’s room. You can find the frequency metric under the customize columns tab.

Lookalike-Audience-Campaign-Frequency

The Breakdown Tool

Facebook gives you several options to break down your campaigns by including age, gender, region, device, etc. Since we’ve already narrowed down your lookalikes by audience size, Facebook should do a good job optimizing and serve to the most relevant criteria. But, what it can’t do, is create new relevant ads based on that criteria.

For example, if you see that females are converting at 35% less CPA than males, it would be a good test to segment by gender and create female-specific creative content to try and improve that performance. If you don’t see any actionable data under gender, move on and look at age, then device and so on.

Keep in mind, not all businesses have the same breakdowns. You may have to do some digging to find something actionable.

Key Takeaway

Identify what campaigns are performing well and increase the budget if the frequency indicates there’s more reach available. Identify segments of your lookalike campaigns that you can test new ad creative with to improve performance.

Improve Your Paid Media Performance with Lookalike Campaigns

By now, hopefully, you’ve identified some areas that can help you improve the performance of your lookalike campaigns. If done correctly, lookalikes can drastically improve account performance by driving new qualified traffic and generating high-volume leads. But, if done incorrectly, they can be a big waste of money.

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