#31 How to Create and Scale Lookalike Audiences

?How to Create and Scale Lookalike Audiences in Meta Ads

One of the most powerful tools available to digital marketers in the Meta Ads ecosystem is the Lookalike Audience feature. Lookalike Audiences enable businesses to reach new customers who share similar traits and behaviors with their existing audience, offering a highly efficient way to expand their reach and drive conversions. By leveraging the data from your most engaged users or customers, you can find people who are more likely to be interested in your products or services, making Lookalike Audiences an essential part of any scalable digital marketing strategy.

This article will cover how to create and scale Lookalike Audiences in Meta Ads, why they are important, and the best practices for maximizing their effectiveness.

?What is a Lookalike Audience?

A Lookalike Audience is a group of people who are similar to a source audience that you provide to Meta (formerly Facebook). The source audience is typically made up of users who have already engaged with your brand, whether through website visits, purchases, or other interactions. Meta’s algorithm analyzes the characteristics of the source audience—such as demographics, interests, and behaviors—and identifies similar users who have not yet interacted with your business. The result is a new audience that is likely to respond positively to your ads, helping you attract new potential customers.

?Why Use Lookalike Audiences?

Lookalike Audiences are particularly valuable for businesses because they allow for targeted, data-driven expansion. Rather than casting a wide net with broad audience targeting, Lookalike Audiences ensure that your ads are reaching people who are more likely to be interested in what you’re offering. Some of the key benefits include:

- Increased Relevance: Since Lookalike Audiences are modeled on users who have already shown interest in your brand, the new audience will likely share similar interests, making your ads more relevant to them.

- Improved ROI: By targeting a highly relevant audience, Lookalike Audiences tend to have better engagement and conversion rates, resulting in a higher return on ad spend (ROAS).

- Scalability: Lookalike Audiences allow businesses to scale their reach efficiently, expanding beyond their current customer base while maintaining targeting precision.

?Steps to Create a Lookalike Audience in Meta Ads

Creating a Lookalike Audience is a straightforward process within Meta Ads Manager. Here’s a step-by-step guide:

?1. Create a Source Audience

Before you can create a Lookalike Audience, you need a source audience. This source audience is the foundation of your Lookalike Audience, and the better the source data, the more effective the Lookalike Audience will be. Common source audiences include:

- Custom Audiences: These are audiences based on your website visitors, app users, or CRM data (such as email lists or past customers). You can create a Custom Audience by using the Meta Pixel to track website visitors, uploading a customer list, or collecting in-app activity.

- Pixel Data: If you’ve installed the Meta Pixel on your website, you can create a Custom Audience based on users who have performed specific actions, such as visiting a product page or making a purchase.

- Engagement Audiences: You can create a Custom Audience based on users who have interacted with your content on Facebook or Instagram, such as those who have liked your posts, watched your videos, or followed your page.

To create a source audience:

- Navigate to Meta Ads Manager.

- Select Audiences from the main menu.

- Click on Create Audience and choose Custom Audience.

- Select the data source (e.g., website traffic, customer file, or engagement) to define your source audience.

?2. Create the Lookalike Audience

Once you’ve created your source audience, you can proceed to create your Lookalike Audience:

- In Meta Ads Manager, go to the Audiences section.

- Click Create Audience and select Lookalike Audience.

- Choose your source audience from the dropdown menu.

- Select the location where you want to find your Lookalike Audience. This can be a country, region, or even a specific city, depending on your campaign goals.

- Choose the audience size. Meta allows you to select a percentage between 1% and 10%, with 1% representing the users most similar to your source audience. The higher the percentage, the larger and broader the audience. Typically, 1%-3% audiences are highly precise, while larger percentages provide greater reach but less similarity.After completing these steps, Meta will create your Lookalike Audience, and you can use it for future ad targeting.

?Best Practices for Creating Lookalike Audiences

?1. Use High-Quality Source Audiences

The success of your Lookalike Audience depends heavily on the quality of your source audience. The better your source data, the more accurate Meta’s algorithm will be in identifying users who share similar traits. Ideally, you want to use source audiences that are large enough to provide Meta with ample data (at least 100 users) but also highly relevant. For example, a Custom Audience of past customers or users who have completed high-value actions (e.g., purchases or form submissions) will typically yield better results than a general website visitor audience.

?2. Start Small for Precision

When creating Lookalike Audiences, it’s best to start with a smaller audience size, typically between 1% and 3%. These smaller audiences are more precise, as they are based on users who are the closest match to your source audience. While you’ll reach fewer people, the likelihood of engagement and conversion is higher. As you gather more data and see success with smaller Lookalike Audiences, you can gradually expand to larger audiences to increase your reach.

?3. Use Multiple Lookalike Audiences

You don’t need to limit yourself to a single Lookalike Audience. In fact, it’s often beneficial to create multiple Lookalike Audiences based on different source audiences or audience sizes. For example, you might create a 1% Lookalike Audience based on past customers, a 2% Lookalike Audience based on website visitors, and a 3% Lookalike Audience based on email subscribers. This approach allows you to test and optimize which audience segments drive the best results.

?Scaling Lookalike Audiences

Once you’ve successfully created your Lookalike Audiences and identified the best-performing segments, it’s time to scale your efforts. Scaling Lookalike Audiences involves increasing the size of your audience while maintaining or improving performance. Here are key strategies for scaling Lookalike Audiences:

?1. Expand Audience Size Gradually

If your 1% Lookalike Audience is performing well, you can gradually increase the audience size to reach a broader group of users. For example, you might test a 2% or 3% Lookalike Audience to increase your reach. Keep in mind that as the audience size increases, the precision decreases, so it’s important to monitor performance closely and adjust as necessary.

?2. Layer Lookalike Audiences with Interest-Based Targeting

As you scale your Lookalike Audiences, you can improve performance by layering interest-based targeting. This allows you to maintain relevance as your audience grows. For example, if you’re targeting a Lookalike Audience of past purchasers, you can narrow the audience by adding interest targeting for related categories like “luxury goods” or “fashion.”

?3. Test New Source Audiences

Another way to scale your Lookalike Audience strategy is by testing new source audiences. You can create Lookalike Audiences based on different user actions, such as people who engaged with your Instagram page, watched a video, or downloaded your app. Testing different source audiences gives you new opportunities to reach high-potential customers who may not have been included in your initial campaigns.

?4. Use Lookalike Audiences for Different Stages of the Funnel

Lookalike Audiences are incredibly versatile and can be used at various stages of the marketing funnel:

- Top of the Funnel (Awareness): Use Lookalike Audiences based on website visitors or social media engagement to drive awareness and reach new users who haven’t yet engaged with your brand.

- Middle of the Funnel (Consideration): Create Lookalike Audiences based on users who engaged with content (e.g., downloaded a whitepaper or attended a webinar) to drive further consideration.

- Bottom of the Funnel (Conversion): Build Lookalike Audiences from past customers to reach users who are most likely to convert and purchase.

By aligning your Lookalike Audiences with specific stages of the customer journey, you can tailor your messaging and improve your conversion rates.

?5. A/B Test Audiences and Creatives

As you scale your Lookalike Audiences, it’s important to continuously A/B test different variables to optimize your campaigns. Test different audience sizes, creative formats, messaging, and call-to-actions to see what resonates best with your audience. Regular testing helps you refine your campaigns and maximize ROI as you scale.

?Tracking and Measuring Success

Once your Lookalike Audiences are live, it’s crucial to track and measure their performance. Key metrics to monitor include:

- Click-Through Rate (CTR): A higher CTR indicates that your ads are resonating with your audience.

- Conversion Rate: Track how many users from your Lookalike Audience are completing the desired action, such as making a purchase or signing up for a newsletter.

- Cost Per Acquisition (CPA): Measure the cost of acquiring a new customer from your Lookalike Audience. Ideally, as you scale, you want to maintain or reduce your CPA.

By closely monitoring these metrics, you can identify which Lookalike Audiences and strategies are delivering the best results and optimize accordingly.

?Conclusion

Lookalike Audiences are one of the most effective tools in the Meta Ads arsenal for reaching new customers and scaling your campaigns. By creating Lookalike Audiences based on high-quality source data, starting with small, precise audiences, and gradually expanding as you see success, businesses can effectively grow their customer base and improve ROI. With careful segmentation, A/B testing, and a focus on audience quality, Lookalike Audiences provide a scalable and data-driven approach to digital marketing success.