Facebook ‘Lookalike Audiences’ help advertisers reach users similar to current customers, others in their database

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Facebook is testing a new feature called “Lookalike Audiences” that helps advertisers target users similar to those in their Custom Audience databases, a spokesperson from the company tells us. Advertisers in the beta have seen lower costs per action than with traditional targeting options.

Lookalike Audiences can be created after an advertiser has uploaded a list of first-party data, such as customer email addresses, phone numbers or user IDs to make a Custom Audience. Facebook’s algorithms analyze the Custom Audience and produce another audience segment that is likely to have a similar customer profile. The advertiser can then create any Facebook ad type and target it to the Lookalike Audience. No personally identifiable information is shared back with advertisers and Lookalike Audiences can only be used within Facebook, not exported for email marketing or other ad targeting.

The feature is in limited beta from the Power Editor tool in the U.S. Lookalike Audiences cannot yet be created through the main self-serve ad dashboard or the Ads API. Advertisers can optimize for reach, which will return Lookalike Audiences that are larger but a bit less precise, or optimize for similarity, which will return audiences that are smaller but more similar to the advertiser’s existing Custom Audience. Lookalike Audiences can be combined with other interest or demographic targeting options, so an advertiser could limit its ads to a similar audience that lives in Ohio, or a similar audience who is not already a fan of the advertiser’s page, for example.

Lookalike Audiences could be a powerful new targeting opportunity that helps advertisers achieve their goals and makes ads more relevant for users. CEO Mark Zuckerberg alluded to this type of innovation on the company’s fourth quarter earnings call last week.

“There’s a big opportunity in front of us to make every ad that we’re showing a lot better,” he said. “The biggest ways we’re going to do this are by improving targeting and relevance so we can show everyone content that they care more about and by designing better ad products that aren’t just about links and text and images. For targeting, I’m most excited about the work that we’re doing on Custom Audiences.”