Lookalike audiences, which Facebook began beta-testing last month, will launch this week as a targeting option on the social network’s power editor, allowing advertisers to reach out to potential customers with similar characteristics to their current customers.
Facebook launched custom audiences last fall, which allowed brands to show ads to their current customers who were on the social network. Lookalike audiences extend this ability to other Facebook users with similar attributes.
Both custom audiences and lookalike audiences work off hashes, which are bits of text that uniquely identify data (such as an email addresses) but are designed to protect against reverse engineering that would reveal those data, so no customer information is shared with advertisers or any third parties.
The social network said in a post on the Facebook Studio blog announcing the launch of lookalike audiences:
Both online and offline, lookalike targeting has worked well for businesses, so we are excited to launch it as a targeting option on Facebook. This feature will be available in power editor starting this week.
Lookalike audiences builds off of a targeting feature we launched last fall called custom audiences. Custom audiences lets marketers take their current customer lists and show ads to those people on Facebook. Now, with lookalike audiences, Facebook can use attributes like interests or demographics and show ads to people who share common attributes as their existing customers. Advertisers can serve any type of Facebook ad to these new groups of people potential customers.
We’ve seen this new type of targeting drive a wide range of success metrics for direct response companies like Fab.com, including lower cost per checkout, lower cost per acquisition, larger purchase size, and faster and increased return on investment.
Steve Pole, chief technology officer of Alchemy Social, an Experian company, commented on this news in an email to AllFacebook:
Custom audiences have been providing great results for advertisers, but many have been struggling to get the reach that they need. This new system helps expand the reach potential, which should help advertisers scale out their performance. The only drawback for advertisers is a lack of clarity around how the lookalike group is formed; an advertiser may target a certain audience group because of their spending behavior on an ecommerce website, while Facebook may create a lookalike group based on their movie and music preferences. The advertiser currently has no way to tell Facebook why they chose that group, and to direct Facebook to find other users based on similar criteria. This presents an opportunity for SPMDs (Strategic Preferred Marketing Developers) to build expanded audiences using directly related third-party data.
Advertisers: Have you tried or will you try lookalike audiences?
Twins image courtesy of Shutterstock.