Lookalike audience

Lookalike Audience generally means an "algorithmically-assembled group of social network members who resemble, in some way, another group of members".[1] In digital advertising age, it refers to a new targeting tool for digital marketing, first initiated by Facebook, which helps to reach potential customers online who are likely to share similar interests and behaviors with existing customers.[2]

Pros and Cons

Lookalike audiences anatomize existing customers and their user profiles to find the commonalities between the existing audience. This helps to find highly-qualified customers who previously would have been diificult to identify and reach.[3] This expands the potential audience in different countries and applies to new differentiated audience segments;[4] This appriach saves time and lowers advertising costs for the acquisition of a new audience.

Lookalike audiences might have limited effects on small companies or startups because of the small sample size of their existing audience, which would inevitably lead to insufficient data drawn from the current audience and interference from outliers. Namely, there would be no high bounce rate with these companies' websites.[5]

How It Works

Facebook as an example takes three steps to build a lookalike audience:[6]

  • Choose the custom audience to build a lookalike audience from, which ranges amongst page fans, visitors to the website, and customer lists. A minimum of 100 people is basically needed in the customer group in order for Facebook to create a lookalike audience.
  • Customize the audience size. Larger audiences give wider reach, but a smaller lookalike audience is more targeted, which means ads are seen by fewer people, but they are better aligned to the features of current customers.
  • Target specific demographics. Country, age and gender are all available.

Technical Support

In case of Facebook, their "Power Editor" reduces cost per action (CPA) for their advertisers. It has been said to be counterintuitive and complicated to use.[7]

Progressive or Unethical?

It has been proved by scholars that the tool of lookalike audience, to some degrees, does well in generally advertising results.[8] And it is also listed as an important trend of pay-per-click (PPC) by Delhi School of Internet Marketing.[9] However, debates about such a 3rd party behavioral targeting used for digital marketing never stop either because using big data of customers is anyhow against online privacy settings.[10]

References

  1. ↑ "CUSTOMER ON FACEBOOK - NCMA" (PDF). google.com.hk. Retrieved 18 March 2018.
  2. ↑ "How to Use Facebook Lookalike Audiences | WordStream". www.wordstream.com. Retrieved 18 March 2018.
  3. ↑ "What's a Facebook lookalike audience and why is it important?". Bigcommerce. Retrieved 18 March 2018.
  4. ↑ "The Power of Lookalike Audiences". Online Advertising School. 5 December 2016. Retrieved 18 March 2018.
  5. ↑ "Lookalike Audiences: Why You Can't Ignore Them - South Agency". South Agency. 24 April 2017. Retrieved 18 March 2018.
  6. ↑ "Ticketfly Community". community.ticketfly.com. Retrieved 18 March 2018.
  7. ↑ "Facebook Ad Targeting: 2 Ways to Get New Customers". Retrieved 18 March 2018.
  8. ↑ "Advantages of WCA Facebook advertising with analysis and comparison of efficiency to classic Facebook advertising" (PDF). google scholar. Retrieved 18 March 2018.
  9. ↑ "DSIM- Digital Marketing Blog". Digital Marketing Blog - DSIM. Retrieved 18 March 2018.
  10. ↑ "Facebook Custom Audience Terms of Service: Are You Breaking the Rules? - Jon Loomer Digital". Jon Loomer Digital. 31 October 2013. Retrieved 18 March 2018.
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