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Facebook’s Lookalike Audiences: The Key To Better ROAS

Written by: Carolyn Berk, Content Marketing Associate

Wish all your customers behaved like your best customers? Believe it or not, this dream can become a reality thanks to Facebook’s Lookalike targeting capabilities. Here’s all you need to know about Lookalike Audiences on Facebook and Instagram, and how they can help you increase your return on ad spend (ROAS) by delivering your ads to the most qualified audiences.

Lookalike Intro - Lookalike AudiencesWhat are Lookalike Audiences?

Lookalike Audiences allow you to push your ads to new people who are likely to be interested in your products and services because they have interests and online actions in common with the customers you care about (frequent buyers with high average order value, for example). Lookalike Audiences can be based off cohorts from a variety of sources, such as people who have used your app, people who have made purchases on your website, or people who have liked your Facebook Page. For the best possible results, choose groups of people who have been particularly beneficial to your business, such as users who have made in-app purchases in your mobile game, or customers who have spent the most on products from your online store. That way, you’ll be targeting your ads to people who are likely to perform similar revenue-driving actions. Advertisers frequently use Facebook’s Custom Audiences to segment target groups of customers based on demographics, interests, and actions.

Taking Lookalike Audiences One Step Further

Lookalike audience nestingTo avoid oversaturating new prospects with Lookalike ads, and unintentionally driving up bids, savvy online advertisers employ a strategy called Nested Lookalikes.

The concept is very similar to Russian nesting dolls. You take an audience that represents the 1% of the US population that looks most like your best customers, exclude it from the next group of people that are slightly less similar (2% or 3%), and so on.

As you move from ring to ring, you exclude the segment before it. Then you test each audience to see where the best performance is. Typically, 1% shows the most promising returns, but sometimes our customers are surprised by the results; the 1% cohort is okay, while 3% is the best.


Lookalike Audiences Deliver Results

Whether you’re looking to grow your subscriber base, see a higher return on ad spend or boost your conversion rates, Lookalike Audiences deliver. Take a look at how they’ve helped one Nanigans customer achieve impressive results:

A leading online retailer wanted to acquire new shoppers who would spend as much money as some of its most loyal customers. To do this, the brand used Facebook’s Lookalike Audiences to reach users with similarly high value and increase its customer base during the competitive holiday season.

Even during the most cutthroat time of year for ecommerce, the retailer was able to achieve the following results:

Lookalike Audiences holidays

In addition, Facebook became their top performing channel for new customer acquisition during the holidays.

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