Lookalike Audiences: How to Expand Your Reach

Digital marketers have many ways to find their ideal customers. Cookies, for instance, can help marketers track user behavior to find people searching for their products or services. Contextual targeting places ads and content based on what the user is doing, reading, or viewing at that moment. Lookalike audiences, meanwhile, can help marketers expand their audience by finding people in a similar demographic as their current, loyal customers.

What Is a Lookalike Audience?

A lookalike audience is a group of people whose behaviors and traits match those who have previously purchased from you, or otherwise engaged with your brand. Lookalike targeting operates under the assumption that people in a similar demographic, who exhibit similar online behaviors, will be interested in the same content and brands. A lookalike audience can be created from an email list for your brand or website visitors, for example.

Why Are Lookalike Audiences Important for Marketers?

Lookalike audiences offer some advantages for marketers who are looking to expand their audience:

Find Your Target Audience Quickly

Lookalike audiences help you locate your target audience quickly and double down once you dial in on the most effective creative for that audience. You can also optimize ad spend by minimizing the cost to find your audience.

Eliminate Guesswork

Lookalike audiences aren’t a sure thing, but they’re one reliable method to find people likely to respond to your ads. By targeting people with similar behaviors and attributes as your current customer base, you increase the likelihood of conversions.

Expand Your Audience

Once you’ve exhausted your warm market, your sales funnel needs fresh leads. Lookalike audiences help you find them with a lower cost of acquisition than many other types of targeting.

How Do Lookalike Audiences Work on Social Media?

TikTok

When you set up an ad campaign on TikTok, you first choose one of your custom audiences, which consists of users who have already engaged with your brand. Then, you create a lookalike audience based on that custom audience. You can choose from a narrow, balanced, or broad audience, depending on the reach you want to achieve. A narrow audience will be the closest match to existing customers or your source audience. Make sure to “exclude custom audience” from the campaign if you don’t want to retarget those users.

Meta

Creating a lookalike audience on Meta’s Facebook or Instagram is similar to TikTok. First, upload an audience, which may include existing clients or website visitors. Then, choose where you want to find the lookalike audience, and use the slider to select the size. The larger the audience, the more people you will reach, but your overall campaign cost may also rise.

How Do Lookalike Audiences Differ From Custom Audiences?

Lookalike audiences are all about expanding your reach. Custom audiences are made up of people who have already engaged with your brand on a specific platform; lookalike audiences are people who share characteristics with your custom audience, but it should exclude them.

When to Use Lookalike Audiences vs. Interest-based Targeting

Lookalike audiences can be effective when you already have a large group of customers. Meta, e.g., recommends building your lookalike audience from a source audience of 1,000 to 5,000 people, although you can start with an audience as small as 100 people. If you’re a start-up with no data on your customers, you might be better off using interest-based targeting to find people your brand resonates with, until you have a wider audience to build from.

Benefits of Using Lookalike Audiences

Reach High-Quality Prospects

Because you’re reaching people with similar characteristics to loyal customers, lookalike audience campaigns allow you to get better results faster, and with a smaller ad spend.

Reduce Cost-per-Acquisition (CPA)

Click-through and conversion rates rise when you show ads to a highly qualified audience.

Scale at Will

It’s not always easy finding new leads. Lookalike audiences can optimize your funnel, taking people from “prospect” to “loyal customer” faster, because you’re already targeting people who are more likely to convert.

How to Create a Lookalike Audience

From Website Visitors

To create a lookalike audience from website visitors, you can install tracking pixels on your website. Then, you can build a lookalike audience based on specific actions those visitors took, whether that’s opting in to an email list or making a purchase.

From an Email List

You can upload data directly from your CRM to create a lookalike audience.

From People Who Watched Your Video

Depending on the platform you’re using for advertising, you can choose a custom audience based on engagement. Choose “video” and then choose the length of time people watched for. You can then use that custom audience to create a lookalike audience on the platform.

Where to Source Your Audience

You can source custom audiences for lookalike audiences from a variety of places:

• Your CRM.
• Social media interactions.
• Articles they’ve read.
• Their email.
• Their mobile ID.
• Pixels that track what they did on your website.

Location and Size Targeting

The success of your lookalike campaign depends not just on the accuracy of the lookalike matching, but the location and size of your audience. Location targeting matters more for local businesses, like restaurants or retail locations, but national advertisers are typically better off aiming for a wider reach and narrowing the audience size instead.

Location Targeting

Again, national brands may want to start with a broader reach. However, you might want to narrow campaigns based on geography under certain circumstances. For instance, a national clothing retailer wouldn’t advertise winter coats to customers in Florida. That would be an example of a national company narrowing a campaign to a specific region.

Even if you have a national brand, you can narrow your targeting by location to reduce ad spend and find closer matches at higher percentages.

Size Targeting

Size targeting is crucial and enables advertisers to control costs while attracting new leads. You can adjust the size of your campaign by percentages: A campaign might be shown to the top 1%, 2%, or 5% of platform users who match your criteria for a lookalike audience.

As you increase the percentage, the users may not be as close of a match, which could reduce conversions. A 1% audience is likely to be a very close match to your ideal customers. As you increase the percentage to expand reach, your return on investment (ROI) might drop.

However, if you’re in a niche market, you’ll need a larger audience to reach enough people. Experiment with different-sized audiences to find enough conversions at an acceptable customer acquisition cost (CAC).

How to Test and Optimize Lookalike Audiences for the Best Performance Results

A/B testing is one of the best ways to optimize lookalike audiences. When you’re A/B testing, remember to change only one parameter at a time for the best results.

Change the Audience Size

Changing the audience size can give you a broad or narrow reach. An audience size of just 1% will get you a closer match — the more you broaden your reach, the less “alike” your lookalike audience will be to your source audience.

Experiment With Different Source Audiences

Where you get your source audience from also matters — you might find better results compiling an audience from your CRM or tracking pixels on your website, based on content they’ve viewed.

Use A/B Testing for Creative

Once you’ve homed in on an effective lookalike audience, switch up an element of your creative to refine your results even further. This might involve ad copy, graphics, or even the advertising format, such as a carousel ad, a short video, or a static ad.

Be Aware of Overlap

If you’re sourcing your lookalikes from different audiences, there might be some overlap. This can drive up campaign costs and also lead to ad fatigue if the same people keep seeing the same ad.

Be Patient

Don’t rush to switch up your creative, reach, or your source audience. Give a new campaign time before you gauge its effectiveness.

How to Scale Campaigns Using Lookalike Audiences

Increase Your Lookalike Percentage

Having success with a narrow lookalike audience of 1% to 2%? It’s time to scale up and expand your reach. You should use A/B testing to find the best return on ad spend (ROAS) and find out when your reach is so broad that the lookalike set isn’t a good match.

Update the Seed Audience as It Grows

The right seed, or source, audience can make or break a lookalike advertising campaign. To successfully scale and find new leads, refresh your seed audience every few months as your loyal customer base grows.

As successful lookalike audiences become customers in your CRM or visitors to your website, update the seed audience to include others who look like them. Your lookalike audience should evolve and grow as your customer base grows, to maintain accurate targeting.

Be aware of overlap, however, especially if you’re seeding your lookalike audience from different sources, including your CRM, videos, emails, or your website.

Increase Your Budget

Increase your budget slowly and gradually, making sure to track key performance indicators (KPIs) so you can slow down or shift gears if you reach a point of diminishing returns. Once you’ve dialed in a successful audience, increase the budget by 10% to 30% every few days. Those with smaller budgets can increase by 30% to see a change, while those with a larger budget might see a lift with a 10% increase.

Add More Regions

It’s smart to begin your lookalike campaign in a single state or region. Create additional campaigns using the same seed audience and percentage reach, but targeting different states or regions.

Alternatively, you can reduce percentages and broaden geographic reach. However, treating each region separately allows you to tailor ad creative and even language for a specific geographic audience.

More Lookalike audiences Tactics

Finding the right audience using lookalike tactics isn’t always easy: Marketers can approach and scale their lookalike campaign in many ways, and the data you can use to create your lookalike audience is virtually endless. The key is finding what works best for your brand.

Value-based vs. Standard

When algorithms use your source audience to choose the standard lookalike audience, users in the first percentile have more in common with your source audience than those in the tenth percentile. Other factors, such as cost per acquisition, how recently the customer made a purchase, the customer’s average order value, or customer lifetime value (LTV), don’t come into play.

However, value-based lookalike audiences consider these other factors. While decreasing the lookalike customer pool, using a value-based lookalike audience can increase your ROAS. By considering factors such as average order value, most-recent order, or customer lifetime value, you can find the lookalikes most likely to convert.

Tap Into CRM Data

Performance marketing platforms allow marketers to upload real-time, first-party data from their CRM, eliminating a need for cookies and capturing the most reliable data related to customer interactions.

Use Offline Conversions to Build Your Source Audience

You can use APIs to track real-world actions — like in-store purchases and phone orders influenced by online or SMS ads — to expand your source audience. As a result, you can find more accurate lookalikes that represent a wider cross-section of your customer base.

Key Takeaways

Lookalike audiences share characteristics with audiences who have previously purchased from or otherwise engaged with your brand. Using lookalike audiences is a cost-effective way to increase your customer base and build brand visibility, but the success of a lookalike campaign depends on effective targeting.

Frequently Asked questions (FAQs)

What does a 1% lookalike audience mean?

A 1% lookalike audience encompasses users who are the most similar to your existing, or source, audience, based on characteristics that may include demographics, interests, or behaviors.

What are Facebook lookalike audience terms?

Facebook lookalike audience terms relate to the ways you will identify and find your lookalike users. You can create a lookalike audience from your source audience based on demographics, behaviors, or interests.

How do lookalike audiences work on LinkedIn vs Facebook?

You can create a lookalike audience for a Facebook ad campaign by uploading a custom audience from your own data, or choosing leads through the Meta Business Suite. LinkedIn, meanwhile, has shifted from traditional lookalike audiences to “predictive audiences” based on the marketer’s data from lead gen forms or contact lists.

Can I create a lookalike audience in Google Ads (Customer Match)?

Yes, you can create a lookalike segment in a new Demand Gen campaign in Google Ads. Choose a seed audience based on your existing CRM or email, website, or app activity, or YouTube content engagement. Then, determine whether you want a narrow, balanced, or broad reach to find users who are a similar match.

Can you help me set up an A/B test for 1% vs 5% lookalikes?

You can set up an A/B test for 1% vs. 5% lookalikes by initiating two campaigns, both from the same source list and using the same creative, set at different reach percentages.

How and when should you layer lookalikes with interest targeting?

Layering lookalike audiences with interest targeting can help marketers scale a successful campaign. However, be wary of narrowing the audience so much through interest targeting that you can’t reach enough prospects effectively.

Should I use purchases or add-to-carts as my source audience?

Source audiences for lookalike audiences can vary. If you’re running a value-based campaign, using analytics like “purchases” can be an effective way to build a lookalike audience. If you’re just starting out or don’t have a large customer base, using customers who added an item to their cart but haven’t converted to a sale yet, might make sense for a broader reach.