Lookalike audience

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 difficult to identify and reach.{{cite web|url=https://www.bigcommerce.com/ecommerce-answers/whats-facebook-lookalike-audience-and-why-it-important/|title=What's a Facebook lookalike audience and why is it important?|website=Bigcommerce|language=en|accessdate=18 March 2018}} This expands the potential audience in different countries and applies to new differentiated audience segments;{{cite web|url=https://www.onlineadvertisingschool.com/lesson/power-lookalike-audiences/|title=The Power of Lookalike Audiences|date=5 December 2016|website=Online Advertising School|accessdate=18 March 2018}} This approach saves time and lowers advertising costs for the acquisition of a new audience.

In order to be effective,{{Cite web|url=https://kenshoo.com/blog/lookalike-audiences/|title=How to Best Scale Lookalike Audiences|last=Shpivak|first=Etgar|date=June 6, 2019|website=Kenshoo|access-date=August 8, 2019}} a lookalike audience seed needs to be homogeneous. This is commonly achieved using a consistent behavioral pattern. The homogeneity of the lookalike seed has a greater influence on the audience's effectiveness than the size of this sample group. In Facebook, the minimal lookalike seed size is 100 users from the same country.{{Cite web|url=https://www.facebook.com/business/help/164749007013531|title=About Lookalike Audiences|access-date=September 28, 2021}} Facebook generally recommends creating a seed from an audience of 1,000 to 5,000 users.

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.{{cite web|title=Lookalike Audiences: Why You Can't Ignore Them - South Agency|url=http://thesouthagency.com/lookalike-audiences-cant-ignore|website=South Agency|accessdate=18 March 2018|date=24 April 2017}}

Marketers use many data sources to create lookalike seeds. Some examples of eCommerce lookalike seeds include:{{Cite web|url=https://blog.ladder.io/ecommerce-lookalike-audiences/|title=7 eCommerce Lookalike Audiences That Are Worth Testing|last=Levy|first=Elad|date=April 25, 2019|website=Ladder|access-date=August 8, 2019}}

• CRM-based – A seed based on an email or phone number list of customers who have had a past interaction with the business. This can be further segmented, for example customers with the highest lifetime value or past purchases of a specific product.
• Conversion-based – A seed based on users that have performed an action such as a Purchase or Lead form submission on the website.
• Engagement-based – A seed based on users segmented by their engagement, such as pages viewed, time spent on the site, video views, etc.{{Cite web|url=https://www.outbrain.com/blog/scaling-paid-campaigns/|title=Scaling Paid Campaigns via User Engagement Signals|last=Basis|first=Ehud|date=October 29, 2018|website=Outbrain|access-date=August 8, 2019}}

Facebook, as an example, takes three steps to build a lookalike audience:{{cite web|title=Ticketfly Community|url=https://community.ticketfly.com/s/article/Facebook-Custom-and-Lookalike-Audiences|website=community.ticketfly.com|accessdate=18 March 2018|language=en}}

• Choose the audience seed to build a lookalike audience from. This can range from page fans, visitors to the website, and customer lists etc. Generally the base audience should be composed of a minimum of 500 people. Larger pools will increase the accuracy of the lookalike audience.
• Choose the specific location (country or region) to find a similar audience in.
• Customize the audience size. Facebook offers a range of percentiles from 1% to 10%, indicating the size of the combined population of the locations selected. Larger audiences provide a wider reach, but a smaller lookalike audience is more targeted, which means ads are seen by fewer people, but they are likely to be better aligned to the features of the audience's seed.

One study has shown that the tool of lookalike audiences, to some degrees, does well in generally advertising results.{{cite web|title=Advantages of WCA Facebook advertising with analysis and comparison of efficiency to classic Facebook advertising|url=http://www.iaras.org/iaras/filedownloads/ijitws/2017/022-0019(2017).pdf|website=google scholar|accessdate=18 March 2018}} It is also listed as an important trend of pay-per-click (PPC) by Delhi School of Internet Marketing.{{cite web|title=DSIM- Digital Marketing Blog|url=http://dsim.in/blog/2017/07/19/7-ppc-trends-take-ahead-2017/|website=Digital Marketing Blog - DSIM|accessdate=18 March 2018}} However, debates over such a third party behavioral targeting being used for digital marketing hasn't stopped either, because using the data of customers is against online privacy settings.{{cite web|title=Facebook Custom Audience Terms of Service: Are You Breaking the Rules? - Jon Loomer Digital|url=https://www.jonloomer.com/2013/10/31/facebook-custom-audience-terms-of-service/|website=Jon Loomer Digital|accessdate=18 March 2018|date=31 October 2013}}

In 2019, limitations were put in place by Facebook to stop discriminatory targeting of audiences according to zip code, income levels and demographics (age and gender).{{Cite web|url=https://newsroom.fb.com/news/2019/03/protecting-against-discrimination-in-ads/|title=Facebook removes age, gender and ZIP code targeting for housing, employment, credit ads|access-date=August 8, 2019}} In June 2022, the U.S. Justice Department Civil Rights Division filed a lawsuit in the Southern New York U.S. District Court against Meta Platforms alleging that the Lookalike audience tool for targeted advertising on Facebook discriminates against users based on their race, color, religion, sex, disability, familial status, and national origin in its distribution of housing advertisements in violation of Title VIII of the Civil Rights Act of 1968. Meta Platforms settled with the Justice Department on the same day the lawsuit was filed.{{cite news|last=Feiner|first=Lauren|date=June 21, 2022|title=DOJ settles lawsuit with Facebook over allegedly discriminatory housing advertising|publisher=CNBC|url=https://www.cnbc.com/2022/06/21/doj-settles-with-facebook-over-allegedly-discriminatory-housing-ads.html|access-date=July 26, 2022}}{{cite news|last1=Nix|first1=Naomi|last2=Dwoskin|first2=Elizabeth|date=June 21, 2022|title=Justice Department and Meta settle landmark housing discrimination case|work=The Washington Post|url=https://www.washingtonpost.com/technology/2022/06/21/facebook-doj-discriminatory-housing-ads/|access-date=July 26, 2022}}{{cite press release|title=United States Attorney Resolves Groundbreaking Suit Against Meta Platforms, Inc., Formerly Known As Facebook, To Address Discriminatory Advertising For Housing|date=June 21, 2022|publisher=U.S. Justice Department|url=https://www.justice.gov/usao-sdny/pr/united-states-attorney-resolves-groundbreaking-suit-against-meta-platforms-inc-formerly|access-date=July 26, 2022}}

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Category:Digital marketing