Facebook now lets you create Facebook Lookalike Audiences based on customer lifetime value. If however, you are only interested in targeting a local area - say, 50-miles of Phoenix, AZ - then you will want to create a 10% Lookalike, so that when you drill down the geo-targeting at the Ad Set level of creating your ad, you will still have a good sized audience to target.
Basically a lookalike audience consists of a group of people that are very similar to another group of people. Like Facebook, Google's targeting feature creates similar audiences by using first party data in order to find commonalities between new audiences and your existing customers.
Just like Facebook, you're not restricted to finding similar users in the geo your list is based on. If your source is a remarking list of previous US customers, you can tell Google to target similar users in Australia if you wish. This type of audience requires a source audience of just 100 people, but, due to Facebook's matching algorithm, works much better when your custom audience is over 1,000 people.
The better you maintain your CRM, the better Facebook will be able to create a quality lookalike audience off of your customer list. Facebook creates a lookalike audience by analyzing a source audience to discover what things those people all have in common.
This is an extremely effective tool for targeting customers who have bought from the brand already, or expressed an interest in the brand before (i.e. signing up to a newsletter or entering a competition). Click the Create Audience menu and select Lookalike Audience.
For example, a Marketing 360® client who sells sports and health supplements had a customer list (emails and names) of 19,000 people. Customer List: For your customer list, although most people instruct Facebook to match users based on email address, you can enter 15 different matching points such as date of birth or phone number.
The big takeaway is to remember to utilize ALL of Facebook custom audience functions. Keep in mind: Even though they bear similarities to your customers, it's possible, even likely, that your lookalike audience is unfamiliar with your brand and that this could be their first touchpoint with your business.
If you have the Custom Audience with over 1000 unique users, don't hesitate to start with marketing to that base and feeding your funnel through those Custom Audience's Lookalikes. Lookalike audiences are used to targeting people who are similar to sets of customers that buy currently from your online store.
Lookalike Audiences are a helpful way to leverage what you know about your engaged audiences to find new prospects. After all, you want to emulate only your ideal customers. If you're not having success with Facebook interest targeting chances are that's because you're not using them like we're using them, so read on and I'll explain how to get the most out of interests.
This data can help guide you on the size of the audience you may want to target on Facebook. By breaking down your customer base into different segments, you can greatly increase the effectiveness of your lookalike campaign. Later, when you understand your strategy a little better, you'll have the audiences so you can start using them to target your ads.
Something to note: Since frequency caps limit the daily number of times you can deliver an ad to a user, lookalike audiences won't increase your overall reach. At the same time, the return on every new customer acquired is going down, as customers—more price-sensitive than ever—are lured away to low-cost competitors.