Understanding Lookalike Audiences

What are Lookalike Audiences?

Lookalike audiences are a powerful advertising tool that allows businesses to reach new potential customers who are similar to their existing high-value customers. Platforms like Facebook and Google use algorithms to identify common characteristics among your source audience (e.g., website visitors, customer lists) and then find a broader group of people who share those traits, expanding your reach efficiently.

The Size vs. Quality Trade-off

When creating lookalike audiences, there's a crucial trade-off between audience size and quality. Smaller lookalike audiences (e.g., 1% of a country's population) are typically more similar to your source audience, leading to higher quality leads but limited reach. Larger audiences (e.g., 5% or 10%) offer greater reach but may dilute the similarity, potentially reducing conversion rates. Finding the optimal balance is key to effective campaign performance.

How to calculate Lookalike Audience Expansion?

The Lookalike Audience Expansion is a simple calculation to understand the potential reach of your lookalike audience based on a percentage of a target country's population. It helps you visualize the scale of your potential audience.

The formula is:

Lookalike Audience Size = Country Population × (Lookalike Percentage / 100)

Using the Lookalike Audience Expansion Calculator: an example

Let's walk through an example to see how the calculator helps you determine the potential size of your lookalike audience.

Step-by-step calculation:

• Scenario: You want to create a lookalike audience in Canada.
• Country Population: Canada has a population of approximately 40,000,000 people.
• Lookalike Percentage: You decide to target a 2% lookalike audience.
• Calculation: 40,000,000 × (2 / 100) = 800,000
• Result: Your lookalike audience size would be 800,000 people.

Frequently Asked Questions

• Q: What is a good source audience size for lookalikes?
  A: A source audience of at least 1,000 high-quality customers is recommended, but larger (e.g., 10,000+) is generally better for accuracy.
• Q: Can I create lookalikes from different source audiences?
  A: Yes, you can create multiple lookalike audiences from different source audiences (e.g., website purchasers, app users, email subscribers) to target various customer segments.
• Q: How often should I update my lookalike audiences?
  A: It's good practice to refresh your lookalike audiences periodically (e.g., monthly or quarterly) to ensure they remain relevant as your customer base evolves.
• Q: What's the difference between 1% and 10% lookalikes?
  A: A 1% lookalike is the most similar to your source audience, offering high quality but limited reach. A 10% lookalike is broader, providing greater reach but potentially lower similarity and conversion rates.