#90 Are Lookalike Audiences Dead?
With changes to Facebook's ability to track pixel events and build a bigger audience of high-value customers to mirror, has the lookalike audience died?
In this episode, we'll discuss the best targeting options at the start of 2022 and the reasons you may want to consider changing your paid social advertising strategy.
The topic of conversation today is, are lookalike audiences dead? Are they gone? Are they totally useless today? Well, the answer is not so clear, but I am starting to lean that maybe lookalikes aren't the king that they once were.
I do have a couple of clients that lookalikes still today work very well for, and those clients seem to be the ones that have a lot of high volume. So, I'm talking, they're doing hundreds of orders per day. When you're on that type of volume, Facebook's pixel, the standard browser pixel, as well as the conversions API, if you're on Shopify and you have that connected, you're getting two possible signals there. One for the browser pixel, and one from the conversions API, which is called service side tracking. And that was put in to, hopefully, help with the struggles that Apple has brought upon us as ad buyers.
Now, as I just mentioned, Apple is mostly the reason to blame for this. Maybe in the past, you were able to easily get 50 to a 100 conversions. In a relatively new store, if you had a good product and you were able to make those audiences and make lookalike audiences right away. Now, if you're not producing that type of volume, you might have a tough time, even going into Facebook Ads Audience Manager and making a lookalike. It simply won't let you. You can do a lookalike off of an already made audience, like off of visitors. And I mean, even if you wanted to pick purchases, but you likely don't have enough people in those audiences. So, I'd advise against that.
I'm talking about the value based lookalikes, where you go to audience manager, you actually select the create lookalike button. You select the pixel, you select the country, and you select the event, which obviously most people is going to be purchases. That's what most people are looking for. And once you make that selection, you click to create, and it's going to show you how many conversion events for that specific event, in this case, purchases, have you had in the last 30 days or so. You need to have, at the very minimum on that stat, you need to have 100 events at the bare minimum, or else Facebook's not going to even allow you to create that lookalike audience. So, it's going to say no.
Now, you can try to go down to ad cart, you might have enough there. But what I'm getting at here is if you're not reaching that 100 conversion events, if you're not reaching that 100 conversion events in a 30-day period of time, lookalikes are not going to work for you. So, if you've been doing lookalike audiences and say, maybe earlier in the year, you were very successful with them, but your volume has dropped since then, your lookalike performance is going to go down. It's not a one time thing. It's not like you reach this one goal of getting a 100 conversion events in that 30-day period of time and then you're home free. You don't have to worry about it, the lookalikes are good to go.
You need to maintain that month to month in order for that lookalike to be effective. So, in that case, as I mentioned, if you're not pulling heavy volume every single month, lookalike audiences might be dead for you or dead for your client. That might not be the best way to go. And so, we're going back, we're going back to interest based targeting. And there's a couple of different ways that I've found interest based targeting to be successful. And one thing to remember when you get tips, whether it be from me or from anybody on YouTube or anywhere else, really, is that there is no blanket strategy for everybody. There is no blanket strategy that works for every single product or every single vertical. That's just not possible.
When I give these tips and I give this information, and when you hear things from other people, yes, you might want to give them a try, but because they don't work, doesn't mean they don't work entirely. They just may not work for you. And everything is different, no product is the same, basically. No creative is the same. No background data for pixel and conversion API data is the same. So, you have to go in with an open mind, anytime you try these things. So, when it comes to interest targeting, if you talk to a Facebook rep today, and I really advise that you try not to, because a lot of these Facebook reps, and I don't mean to hate on them, but a lot of them don't have a lot of experience in actual advertising in Facebook.
They go into Facebook, having never had their own store, having never had real legitimate spend in their own ad accounts. They have some training, a little bit of training here from Facebook, but they don't have most of them. There's probably some good ones in there, but they don't have the real qualifications to tell you what kind of campaigns you should be running and what you should be targeting. Yes, they know how the platform works and what you should do with the platform and the features of the platform. But in terms of marketing, targeting, audiences, creative, I wouldn't listen to them.
And so, if you talk to them now, what they're going to want you to do is basically combine all ad sets, all targeting all together in one big thing, and just target one main ad set. For some people that might work. But here's what's going to happen. If you do that, you're going to get the average best, not necessarily the average best, but the average cost per conversion across the account. So, if you have one ad set that's able to do $20 cost per acquisition, you have another ad set that's able to do $75 cost per acquisition, and you really need to be near that 25, you might find yourself on these combined audiences, more at that $50 cost per acquisition.
Now, for some people that might be okay, but if you have a very limited margin, that's not going to work for you. And you're kind of almost tapping out, you're almost giving up and just like, "It could be more profitable if I got this lower cost per acquisition, but you know what? I'm just going to stay in this zone here. I'm not losing money, I'm not gaining money. I'm in this average, that's good enough for me." If you want to be there, that's fine. And if you're happy being there, that's fine. And if you're able to continue your business and grow it that way, that's fine. But if you're looking for profit and if you're looking for growth, you're going to have to spend more time and do more detailed interest targeting.
Now, I kind of have gone back and forth on this over the last couple of months, because like I said, it depends on the brand and the company that I'm running ads for. For some, instead of combining all interest based targeting into one big ad set, what I've found effective for some is to take like-minded interest together and put those in one ad set. So, if we're talking, I don't know, about... Let's talk about Air Jordan sneakers, say you're selling Air Jordan sneakers. What I mean by groups is, so maybe you have a brands group that you target. So, this brands group we're targeting Nike, we're targeting Reebok, Under Armor. That's the brands group.
And then we have another ad set where we're targeting actual shoe shoppers. So, we're targeting people that go to shoe stores and are looking for shoes online. And then maybe we have another set who like certain basketball players. Because we're selling Air Jordan, so we're obviously going to target people that like Michael Jordan, maybe Tiger Woods, other Nike personas that we're aware of. So, if you get what I'm saying there, that's what I'm talking about in the interest targeting groups, instead of just one lumped together group.
What I have also found successful in some of the smaller spend accounts that I've done before and that I've worked on is first finding out what are indeed your best interest targets. What are the ones that you should be targeting? The only way to find that out is to test. And yes, you're going to waste money. That's the only way to really find out. So, what I'll do is I'll create a ad budget optimization campaign, so not campaign budget optimization, and I'll have one to two creatives. You don't want to go too much because it's going to spread it out.
I mean, if you really have one piece of good creative you're happy with, I would even try that first. And have multiple ad sets, I'm talking four, five, six, more, where you're targeting one specific interest that's very, very different from the other. So, you don't want it to be necessarily in the same realm, just different enough. So, where you're targeting one specific interest per ad set and then you put a budget on each of those ad sets, and let those run for three to five days or so, to see what gets you the conversion event that you're looking for.
If you're looking for leads or if you're looking for purchases, those are the things that you should pay attention to. You let that run. You're going to have ad sets that never get a single conversion, and it's wasted money. There's no doubt about it. But you might discover one or two ad sets that have single interest in there that work really well and work quickly. And that you might find that you can get a really good cost per acquisition from that one interest target that you've found.
Now, maybe you find two and that their cost per acquisitions are very similar. If you have two ad sets and the cost per acquisitions are very similar, you want ad sets that have more than one conversion event, ideally at least three in that period of time, in that week period of time. And if you're getting a cost per acquisition that is low, compared to what you've had before, or as good. Say it was $15 cost per proposition and you really have been doing 25, that's a win. That's $10. So, if you take those two ad sets and you've shown the history to Facebook that, that creative with that targeting is going to give you that cost preposition. That's a time where you can combine those two ad sets together and you're going to get that average cost per requisition for that creative and targeting combination.
And you should, by theory, stick with that same cost per acquisition on average, but increase your audience size. Another question I get asked is, should I disable that expand targeting box that you see whenever you do interest targeting? And as of right now, I'm a fan of keeping that checked, keeping that on. Because when you select your interest target, that's going to be the base of the targeting, but allowing it to expand from there, in my opinion is fine. It's only going to expand when it can find more purchases for you or the algorithm thinks so, but it's still going to keep that same interest based initial part, so you're not getting entirely lost, you're not getting entirely off that interest target subject matter. So, I'm a fan of keeping that on.
I mean, these are things that you're going to have to test and things that you're going to have to try. But if you're out of the lookalike game, because you're just not getting enough data, you're not getting hundreds of orders a day, 50 to a 100 orders a day and you can't keep that pixel and that audience updated with hundreds of people in a 30 day period of time, interest based targeting is going to be the way to go for you. Don't force the lookalike. They're not as good as they used to be, unless you have that heavy data.
So, there you go. That's it for today. And we hope to keep putting out awesome episodes. If you're not actually subscribe to our YouTube channel, our Dropkick Ads YouTube channel, go find that on YouTube. One of my 2022 resolutions here is to be more active on YouTube, make more video content. So, go there, subscribe to the videos. And we're going to talk about more stuff, all types of things there. So, go check that out. And we're going to try to get this podcast out every single week, if we can, and help you become an ultimate marketer.