What are the Difference Between Facebook Custom Audiences and Facebook Lookalike Audiences
Facebook advertising provides businesses and marketers with an incredibly powerful platform to connect with their target audience. With over 2 billion monthly active users, Facebook enables you to reach people all over the world. Facebook Custom Audiences vs Facebook Lookalike Audiences is a key advantage of Facebook advertising, as it allows you to go beyond basic demographics and target users based on their interests, behaviors, and characteristics. This is made possible through Facebook’s detailed user data and advanced targeting options.
Two of the most popular and effective Facebook targeting features are Custom Audiences and Lookalike Audiences. Both allow you to create laser-focused target audiences beyond location, age, and gender. However, Custom Audiences and Lookalike Audiences work differently and are best utilized for different purposes.
In this detailed guide, we will explore what Facebook Custom Audiences and Lookalike Audiences are, how they work, their key differences, and when to use one vs. the other for the best results.
Key Takeaways
- Custom audiences allow you to target your existing customers, website visitors, email subscribers, etc. Lookalike audiences help find new potential customers who are similar to your existing customers.
- Custom audiences are based on first-party data like email addresses or device IDs, while lookalike audiences are based on custom audience data or page likes.
- Custom audiences give you more control over who you target, while lookalike audiences help you expand your reach. Using both together produces the best results.
- Custom audiences are great for remarketing. Lookalike audiences help you find new customers. You can create different tiers of lookalikes based on engagement.
- Custom audiences have no minimum audience size requirement. Lookalikes require at least 100 people in the source audience for a 1% lookalike and 1000 for a 2% lookalike.
- Custom audiences can be created fairly quickly, while lookalikes take up to 72 hours before they are ready to use. Frequency capping is easier with custom audiences.
- Use custom audiences to engage your existing customers and lookalikes to find more people like them. Test 1%, 2%, and 5-10% lookalikes for the best results. Analyze performance to optimize targeting.
A Head-to-Head Comparison Between Facebook Custom Audiences vs Facebook Lookalike Audiences
While both Custom Audiences and Lookalike Audiences enable highly targeted Facebook advertising, there are some important differences between how they work:
| Custom Audiences | Lookalike Audiences |
|---|---|
| Based on your 1st party data | Derived from your Custom Audiences |
| Directly target known contacts | Find new audiences who share qualities with your existing audience |
| Offline data like emails/CRM can be used | Based only on online data and site engagement |
| More control over who is targeted | Facebook determines lookalike composition |
| No minimum audience size | Require 100+ people for 1% lookalike |
| Take minutes to create | Take up to 72 hours to generate |
| Best for remarketing | Best for finding net new audiences |
What are Facebook Custom Audiences?
Facebook Custom Audiences allow you to target ads to specific groups of people on Facebook that you already have some information about. For example, people who have visited your website, subscribed to your emails, interacted with your Facebook page, or bought from your physical store.
The main benefit of Facebook Custom Audiences is that it enables you to reconnect and re-engage people who already know your business in some way.
Some Key Ways Custom Audiences are Used
- Remarketing: Use remarketing to target people who have already visited your website or interacted with your content and nudge them to convert or purchase.
- Email list targeting: Reach people on Facebook who have subscribed to your emails or newsletter.
- Loyalty targeting: Engage people who have bought from you before to get repeat purchases.
- App engagement: Reach people who have used your mobile apps to drive re-engagement.
- Local store targeting: Target people who have visited your local brick-and-mortar store location.
- Page engagers: Market to people who have already liked, followed, or engaged with your Facebook Page.
The key to creating effective custom audiences on Facebook is having customer data about the people you want to target. This allows Facebook to identify and target those specific people within its platform.
Custom Audiences can be created by uploading Customer lists (like emails, names, or phone numbers), integrating Facebook pixel or SDK data, or targeting people connected to your Facebook page or Instagram profile. We’ll cover how to create Custom Audiences in more detail later.
First, let’s understand how Facebook Lookalike Audiences work and how they differ from Custom Audiences.
What are Facebook Lookalike Audiences?
While Custom Audiences allow you to target people you already know directly, Lookalike Audiences help you find new people on Facebook who are similar to your existing customers.
Lookalike Audiences use your Custom Audience data to identify common qualities and attributes of those people, such as demographics, interests, and behaviors. Facebook then finds new people on its platform who share those same attributes and adds them to the Lookalike Audience.
This enables you to reach new potential customers who are likely to be interested in your business because they resemble people who are already engaged with you in some way.
Some Examples of How Lookalike Audiences are Used
- Find new website visitors: Target people similar to those who have visited your site before to drive new traffic.
- Get new subscribers: Grow your email list by targeting lookalikes of current subscribers.
- Attract more buyers: Find people with similar traits as previous customers to get new sales.
- Grow app adoption: Increase app installs by targeting lookalikes of current app users.
- Expand page followers: Get more page likes and followers by targeting lookalikes of current followers.
The main power of Lookalike Audiences is the ability to expand your reach beyond existing contacts. This enables you to run campaigns to attract new cost versions cost-effectively.
Now that we understand what Custom Audiences and Lookalike Audiences are at a high level let’s explore how they work and how they differ.
How do Custom Audiences Work?
Custom Audiences allow you to upload lists of customer information, such as emails or phone numbers so that Facebook can identify those people and enable you to target ads specifically to them.
Here are some key facts about how Facebook Custom Audiences work:
- You provide the data: First-party customer data comes from your CRM, website, and email lists, etc. Facebook does not share this data.
- Data is hashed and anonymized: When uploaded, any personally identifiable data is encrypted through a process called hashing to protect user privacy.
- Matching happens behind the scenes: Facebook matches the hashed data against user profiles on its platform to identify your audience members.
- You target anonymized profiles: You only target anonymous user profiles, not actual names or emails. User privacy is maintained.
- Multiple data sources can be used: You can build audiences using your website traffic, CRM data, offline data, and more. Audiences can also be combined.
- Audiences can be reused: Custom Audiences stick around, so you can easily target them again in future ad campaigns.
Being able to target people you already have information on directly gives you significant flexibility and control over your Facebook advertising. Custom Audiences remove a lot of guesswork because they are built on real data from customers who have already engaged with your business in some way.
Next, let’s look at how Facebook generates Lookalike Audiences for you.
How do Lookalike Audiences Work?
While you directly provide the customer data for Custom Audiences, Facebook generates Lookalike Audiences for you automatically based on that data. Here is an overview of how Lookalike Audiences are created:
- Based on Custom Audiences: Lookalikes are derived from either your customer lists or your existing Custom Audiences.
- Analyze source audience: Facebook analyzes the source audience to identify common characteristics and patterns.
- Find similar users: Machine learning algorithms identify other Facebook users who match the attributes of your source audience.
- Generate new audience: The matched users are added to a new Lookalike Audience that you can target.
- Adjust match percentage: You choose how closely matched the lookalikes should be from 1-10% usually. A higher % means more similar.
- Audience expands over time: The Lookalike Audience will grow as the algorithm continues finding new matching users to add.
Lookalike Audiences tap into Facebook’s huge amount of user data and leverage machine learning to uncover key similarities among groups of people. This enables you to reach new customers who are likely to be interested in your products or services based on similarities to your current customers.
Now, let’s compare some of the key differences between Custom Audiences and Lookalike Audiences.
Custom Audiences vs. Lookalike Audiences: Key Differences Between Them
While both Custom Audiences and Lookalike Audiences enable highly targeted Facebook advertising, there are some important differences between how they work:
Data Source
- Custom Audiences: These are built using your first-party data, like customer contact lists, website visitors, purchasers, etc. You directly provide the customer information to Facebook.
- Lookalike Audiences Are derived from your existing Custom Audiences or Page Likes. Facebook generates new audiences that match the characteristics of your source Custom Audience.
For custom audiences, you supply user data directly. For Lookalikes, Facebook creates new audiences by analyzing your Custom Audience data.
Audience Composition
- Custom Audiences: Give you full control over who exactly is included since you provide the exact contact details. You know the audience matches your data.
- Lookalike Audiences Are determined algorithmically by Facebook based on identifying similar traits among users. You don’t know exactly who is being targeted.
Custom Audiences allow precise targeting of known contacts, while Lookalikes find audiences that probabilistically match desired traits.
Data Type
- Custom Audiences: These can be created using your business’s customer data, both online (web visitors) and offline (CRM).
- Lookalike Audiences can only use online engagement data since Facebook has to analyze user activity patterns. Offline data cannot be used.
Custom Audiences provide more flexibility in using both online and offline sources. Lookalikes rely only on online data that Facebook has access to.
Audience Size
- Custom Audiences: There is no minimum audience size. You can create hyper-targeted segments of any size.
- Lookalike Audiences: A minimum source audience size of 100 for 1% lookalikes and 1000 for 2% lookalikes is required. The audience has to be large enough for pattern analysis.
If you have limited customer data, Custom Audiences may work better for creating tight segments. Lookalikes work best when you have a large source audience pool.
Creation Time
- Custom Audiences: These can be created in minutes once you upload contacts or integrate your data sources. Just set the parameters, and the audience will be ready.
- Lookalike Audiences: Take up to 72 hours to generate since Facebook needs time to analyze data and find matching users algorithmically.
Do you need audiences ready quickly? Custom Audiences are faster to activate, while Lookalikes take more time. Plan if using Lookalikes.
Use Case
- Custom Audiences: Excel at remarketing and engaging previous customers, website visitors, existing contacts, etc.
- Lookalike Audiences: These are best for finding new audiences and expanding your reach among potential new customers.
Combine Custom Audiences for re-engagement and Lookalikes for new customer acquisition for optimal results.
These are some of the key differences that highlight when each audience type works best. It would help if you leveraged both as part of a robust Facebook advertising strategy.
Next, let’s walk through how to create each audience type.
4 Simple Steps for Creating Custom Audiences
Creating effective Custom Audiences is easy and only takes a few steps. Here is a step-by-step guide:
Step 1: Collect Customer Data
First, you need to collect relevant customer data from your business to upload. This could include:
- Email addresses from your newsletter/CRM
- Phone numbers of known customers
- Mobile app user IDs
- Website visitors via Facebook pixel
- Previous purchases tracked by Facebook pixel
Make sure to collect data only in compliance with privacy regulations and include opt-in where applicable.
Step 2: Organize Data in Supported Format
Facebook needs data in a specific format to create audiences. You can provide:
- .csv file with one column for identifier (email, ID)
- .txt file with one identifier per row
- Excel .xls file formatted correctly
One identifier per customer. This information is optional.
Step 3: Navigate to Audiences
Go to the Audiences section in Facebook Ads Manager.
Click the “Create Audience” button followed by “Customer File”.
Step 4: Upload Customer Data
Give your audience a name and upload the formatted customer data file. Select the appropriate data type for each column.
Step 5: Review & Save Audience
Facebook will process and match your data. Review the audience size and details. Click save to create the audience.
Once created, the Custom Audience can be selected when setting up ads to target customers. You can reuse the audience at any time.
4 Simple Steps for Creating Lookalike Audiences
Here is a simple four step process to create effective Lookalike Audiences:
Step 1: Select Source Audience
In the Audiences section, click “Create Audience” and choose “Lookalike” as the type. Select your source Custom Audience.
Step 2: Choose the Lookalike Percentage
Choose the desired closeness of lookalike matching from 1 to 10%. 1% is very broad, while 10% is very similar. Test different percentages.
Step 3: Set Audience Location
Select the geographic location to find lookalikes. Focus on your target countries or cities.
Step 4: Name & Save Lookalike Audience
Give your new audience a descriptive name. Facebook will now process it for up to 72 hours before it’s ready to be used.
Once available, target your new Lookalike Audience the same way you would a Custom Audience when setting up your next advertising campaign.
Tips for Using Custom & Lookalike Audiences Together
Here are some tips for using Custom and Lookalike Audiences together for maximum impact:
- Use Custom Audiences for remarketing to re-engage with existing contacts and customers.
- Create Lookalike Audiences from your best-performing existing Custom Audiences to find more people like them.
- Test lookalikes with different percentage matches like 1%, 3%, 5%, or 10% to see what works best.
- Analyze audience performance regularly and tweak targeting based on results.
- Build different tiers of lookalikes like website visitors > customers > repeat buyers to target.
- Combine Custom and Lookalike Audiences in campaigns to scale your reach.
- Focus Custom Audiences on conversions and Lookalikes more on the top of the funnel.
Leveraging both audience types together will allow you to maximize Facebook advertising results. You should test them continuously to expand your reach and hone in on the audiences that drive the most valuable outcomes.
Now, let’s go over some tips for making each audience type as effective as possible.
Proven Tips for Improving Custom Audience Performance
Here are some tips to get the most out of your Facebook Custom Audiences:
- Expand your data sources: Pull in customer data from all possible sources, such as email, web, mobile, offline, etc. More data = larger audiences.
- Keep audiences up-to-date: Add new data frequently to keep audience membership current. Update old audiences with the latest data.
- Segment into smaller audiences: Don’t just have one big audience. Divide into segments like email subscribers, purchasers, loyalty members, etc.
- Try combining audiences: Blend different audiences for more nuanced targeting, like high-value subscribers + recent purchasers.
- Apply additional targeting: Layer on interest, behavioral, and demographic filters to refine audiences further.
- Analyze performance: Review custom audience performance regularly. Double down on ones driving strong results. Tweak those that aren’t.
- Remarket across the buyer journey: Use custom audiences at each stage, from awareness to consideration and conversion.
- Use across ad formats: Leverage custom audiences beyond feeds for Instagram ads, Messenger ads, video ads, and more.
Focus on growing your customer data over time and crafting audiences that enable you to engage users in the most relevant way at each step of their journey.
Proven Tips for Improving Lookalike Audience Performance
Here are some tips to improve Facebook Lookalike Audience targeting:
- Test multiple lookalike percentages: Try 1%, 2%, 3%, 5%, and even 10% lookalikes to find the optimal balance of similarity.
- Experiment with different source audiences. Building lookalikes from your email list, purchasers, page engagers, etc., can produce varying results.
- Geotarget lookalikes: Use location targeting to find lookalikes in your most valuable geographic regions.
- Create tiered lookalikes: You can make lookalikes off other lookalikes. Try browsing visitors > converters > repeat purchasers.
- Monitor and update frequently: Analyze performance and refresh old lookalikes with new source data to keep improving.
- Blend with other targeting: Combine your lookalikes with interests, behaviors, and demographics for layered targeting.
- Focus on cold audiences: Use lookalikes more for new customer acquisition rather than remarketing existing contacts.
- Promote broad offerings: Lookalikes work best for services/products appealing to a wide audience vs. niche offerings.
Lookalike Audiences take more analyzing and refining to maximize performance. But the benefit of effectively expanding your reach can be well worth the effort.
Final Thoughts
Facebook Custom and Lookalike Audiences provide powerful ways to zero in on your ideal target audience. Custom Audiences allow you to re-engage directly with existing customers. Lookalike Audiences enable you to expand your reach to new potential customers.
Using both together can maximize your Facebook advertising performance and give you a “second bite at the apple” with people similar to current customers—Focus Custom Audiences on conversions and Lookalikes on top-funnel growth.
Be sure to analyze performance frequently and refresh your audiences with up-to-date data. With some optimization, you can achieve fantastic ROI by leveraging Facebook’s unique ability to apply your first-party data for razor-sharp targeting.
The combination of Custom and Lookalike Audiences gives you zero waste reach of potential customers on the world’s largest advertising platform. Utilize them together as part of an effective Facebook marketing strategy.
FAQs about Custom Audiences vs. Lookalike Audiences
What is the minimum size for Custom Audiences vs Lookalike Audiences?
- Custom Audiences have no minimum audience size. You can create very small, targeted segments.
- Lookalike Audiences require a minimum source audience of 100 people for 1% lookalike and 1000 people for 2% lookalike.
Can I combine Custom and Lookalike Audiences?
Yes, you can combine Custom and Lookalike Audiences in the same ad campaign to target both existing and new audiences. This is a great way to maximize the impact of your ads.
Which works better for remarketing – Custom or Lookalike?
Custom Audiences work much better for remarketing to website visitors, previous purchasers, email subscribers, etc. Lookalikes are focused on finding new audiences.
How often should I update/refresh my audiences?
Custom Audiences should be updated frequently as new customer data becomes available. Lookalikes work best when refreshed regularly (every 1-3 months) using recent Custom Audience data.
What gives a better performance – broad or narrow Lookalike Audiences?
Testing is key, but broader lookalikes (1-5%) tend to capture more potential customers. Narrower ones (5-10%) hone in on the most similar “lookalikes.” Balance broad reach with precision.
Can I create different tiers of Lookalike Audiences?
Yes, you can create multiple tiers of lookalikes from each other. For example, you could build 1% lookalikes from an email list and then make 2% lookalikes from those 1% lookalikes. This stacks lookalikes.
Should I use Custom or Lookalike Audiences to reach new customers?
Focus on using Lookalike Audiences to reach new potential customers while leveraging Custom Audiences more to re-engage with your existing contacts and customers.
