How can you use lookalike targeting to reach new audiences with display ads?

One thing I've found super effective in my work as an ad consultant is layering lookalike audiences with detailed targeting. So, you're not just reaching people who are similar to your best customers, but also those who have specific interests or behaviors that align with your product or service. For instance, if you're selling a Shopify app, you could target a lookalike of your top customers, but also add interests like "Shopify", "E-commerce", or "Online marketplace". This way, you're reaching people who are not only similar to your best customers but are also likely to be interested in your product.

Lookalike targeting, folks, is like having a secret sauce in your Facebook Ads strategy. You see, it's all about taking your existing customer data, those valuable folks who already love what you offer, and using that data to find similar, lookalike audiences on Facebook. The platform then goes to work, using its algorithms to identify users who share common traits, behaviours, and interests with your current customers. This is pure gold because it helps you reach new potential customers who are highly likely to be interested in your products or services. It's like finding your next best customers on Facebook, and trust me, it's a game-changer for ad campaigns, making them more efficient and effective

In my experience, the best audiences to create lookalikes of are those that have shown high-value actions. For example, if you've got a list of customers who've made repeat purchases, that's gold. Or, if you've got a list of leads who've filled out a form on your site, that's another great starting point. The idea is to find people who've shown a strong interest in your product or service, then use that data to find more people like them. It's like cloning your best customers... but in a totally non-creepy way. The more specific and high-value the action, the better your lookalike audience will likely perform.

Creating a lookalike audience is a game-changer in advertising. Start with a strong source audience, like your existing customers or engaged website visitors. Select your advertising platform, define the audience size, and, if needed, specify demographics and interests. Choose the geographical location where you want to find similar users. Let the platform's algorithm do the rest – it identifies common traits, behaviours, and interests to build your lookalike audience. Remember to test and refine by experimenting with different source audiences and sizes to fine-tune your campaign. Lookalike audiences can significantly enhance ad targeting, ensuring your ads reach users highly likely to engage with your offerings.

Use compelling visuals that capture attention instantly and keep your ad copy concise yet impactful. Craft a strong call to action (CTA) that encourages clicks. Remember that many users view ads on mobile, so optimize your designs for mobile responsiveness. Test multiple ad variations to find what resonates best with your audience and iterate based on performance data. Ensure your ad loads quickly and complies with platform guidelines and regulations. It's an ongoing process that blends creativity with data to create effective, eye-catching ads.

Often, what audience you use for targeting is more important that the ad itself. A great ad targeted at the wrong audience won't get much attention. But even a bad ad targeted at the right audience can perform well. So make sure to test out different lookalikes of your best sources (highest value interactions). Then, look at CTR (Click Through Rate) and Conversion Rate which will tell you whether your ads perform but, at the ad group level, will also tell you whether your audience performs.

Click-Through Rate (CTR): Assess how many users are clicking on your ads. Conversion Rate: Track how many clickers complete the desired action, such as a purchase. Cost Per Click (CPC): Understand your cost per click, aiming for efficiency. Return on Ad Spend (ROAS): Measure revenue generated per ad dollar spent. Impressions: Monitor ad displays. High impressions with low CTR may need ad refinement. Bounce Rate: Review landing page bounce rates. A/B Testing: Continuously test ad variations. Ad Placement: Consider ad placement adjustments. Quality Score: Assess Quality Score's impact. Attribution Models: Understand attribution models' effects on performance. Ad Engagement Metrics: Track viewability, video completion, and ad interactions.

Begin with continuous A/B testing to find the most effective ad creatives and designs for your lookalike audience. Make sure your landing page seamlessly aligns with your ad, maintaining consistency in messaging and design. Tailor your targeting based on location and consider further segmentation of your lookalike audience. Monitor ad performance data and adjust your strategies accordingly, making the most of high-performing areas and formats. Maintain high-quality visuals, and re-engage users through remarketing. Optimization is a dynamic journey that enhances the effectiveness of your display ads for lookalike targeting and ensures a better return on investment.

Tweaking the percentage of your lookalike audience can lead to better performance. By increasing the percentage, you're essentially casting a wider net, reaching more potential customers. But it's a balancing act. Go too broad and you might lose the resemblance to your original audience. Worth testing out though, especially if you've seen performance decrease from your lookalikes. It might be that you need to increase audience size.