Techniques to build relevant Audiences for Facebook Advertising

Facebook Ads Playbook: Audience Selection Techniques

In order to understand why we use certain strategies for Facebook Advertising — we think it’s important for a brief lesson on how the Facebook marketing engine works.

Facebook Pricing and Pacing Dynamics

The lovely people at Facebook have already done a great job explaining how their system works but we’d like you to remember two simple rules that define their ecosystem:

  1. Each impression (when an ad unit is shown to a user) is priced based on how many other advertisers are currently bidding on each specific user / audience.
  2. Facebook uses a discounted pacing algorithm, which means they’ll attempt to give you the users within the audience that will be the cheapest (i.e. are the least sought after) as much as possible.

Because of these two dynamics, it then follows that the more you spend (and the larger the size of the people who you’d like to reach), the more expensive any campaign gets as you’ll be competing with more advertisers (#1) and you’ll slowly run out of the cheapest users within your audience (#2).

As a marketer, your job is to go to battle against all the other marketers in the ecosystem to win against those market dynamics. Through a rigorous process and approach (at least as of 2018), this is still possible.

The good news is that you don’t have to be the best copywriter, graphic designer, videographer, or even statistician to be a great Facebook Advertiser — you just have to be systematic, follow the data, and continuously double-down on whatever is working.

Audience Selection

In general, you should attempt to have a diverse audience strategy. This means you should:

  1. Go after multiple general audiences (i.e. if you’re going after millennials, attempt to go after specific segments of them)
  2. Find different ways of targeting the same audience (e.g. if you’re targeting teachers, target people who job titles of “teacher” in one campaign and in another campaign target people who have interests in teachers’ associations.

Why? Because when you have diversity of audience — you’re doing as much as you can to take advantage of Facebook’s discounted pacing, and finding more specific ways of targeting your audience (usually) helps with conversion rates since you can provide more optimized creative for each segment.

With that said, there are a few methods to use when it comes to coming up with targeting options:

Segmented Targeting

This is the most broad to target audiences. You should attempt to target your audiences based on interests they might have, behaviors they share, and/or their demographics. (e.g. age, location, etc.)

Broad targeting solves for the fact that you’ll just have more people in the bucket, which means there are potentially lots of cheap users for Facebook to target for you.

However, it also means that unless you’re selling Pepsi — there will likely be a lot of false positives. You’ll want to use “selective” creative (which we’ll describe more in future series) to filter folks out and other audience targeting options (described below) to help with this problem.

With all that said, consider the following when you’re creating audiences:

  1. Competition — who are your competitors? Target people who are following them.
  2. Popular Market Products — target followers of other products that your users are potentially using or buying.
  3. Employment — target specific job titles, employers or industries that fall within the users/buyers of your product.
  4. Interests — target interests directly related to your product.
  5. Income levels — use this to target the specific part of the market that you believe has the highest likelihood to buy your products (i.e. if you’re selling luxury goods, you should go after more affluent areas)

Custom Audiences

If you already have an existing set of potential users and customers (i.e. if you’ve had a newsletter) then you can use them on Facebook to create an audience.

Facebook attempts to match emails, phone numbers, names, and addresses to their dataset and lets you target those who were matched.

If you have such a list, this is likely the easiest way to get started and get easy wins. The main issue with this approach is that if you don’t have a substantially big list (the minimum is 100 on Facebook, but anything below 500 is rarely useful) then the upside is rather small.

If you do have a large list, then we even recommend segmenting the list with any internal data you may have (or enrich it using tools like FullContact) and targeting each segment separately with relevant content. For example, you may want to segment your list based on activity, recency, or any other factor you think is relevant.

Note that you can use custom audiences in Lookalike audiences described below as well.

Lookalike Audiences

Facebook gives marketers the ability to create audiences that look like other audiences (i.e. in their behaviors, interests, etc.) — which can be a great tool.

We end up using Lookalike audiences almost as soon as we have some success with other campaigns, or if we have access to custom audiences.

You can create Lookalike audiences based off:

  1. App Events or Pixel Events that have been fired before (i.e. Purchases, Add to Carts, Achievement Unlocked)
  2. Custom audiences — based on any internal lists / data you have.

Consider the following when creating lookalikes:

  1. Percentile — we’ve rarely had success beyond 1–2% lookalikes. Keep it simple here (unless you’re spending hundreds of thousands of dollars a month, in which case we really hope you know what you’re doing by now)
  2. Timeframe — if you’re scaling up your spend (or just have 10s of conversions per day), then we recommend limiting your lookalike window to the last 7, 14, 30 day increments (when based on App/Pixel events)
  3. Layer Audiences — you can narrow down your audience bu only targeting people who are interested in “X” within the lookalike to be even more specific. This usually helps increase the quality of users that come through the audience.

Retargeting

You can retarget users who have engaged with your ads in some way, have been on your website and/or app, or are existing customers of your’s.

You should retarget in scenarios where you’d like the user to take a specific action (usually the next step in your funnel, or a repeat purchase of some kind).

Sometimes it makes more sense to think about your advertising strategy in multiple steps:

  1. Awareness — campaigns that make your potential user aware of your product / service. You just want them to take some simple action here (watch a video, like a post, etc.)
  2. Engagement — now that you have a set of users that are aware of your service, you’d want them to start engaging with you through a more complex action (e.g. signing up for a newsletter, downloading an e-book, getting into a trial)
  3. Purchase / Conversion — with an engaged audience, you’d like to have them make the final action you’d like them to take (e.g. sign up)

For simple products or low-priced products, you can actually merge #2 and #3 when it comes to retargeting. But for complex products (like high-priced SAAS products), it may be worth using a more comprehensive strategy.

For the first step of this multi-step funnel approach, you can use all the audience ideas above. However, for the second two steps you can target people based on:

  1. App/Pixel Events — retarget users who have done something that constitutes as “awareness” (e.g. read an article, landed on a specific landing page, etc.)
  2. Engaged with an Ad* — retarget users who have engaged with one of your awareness ads (e.g. commented, liked, shared, watched, etc.)
  3. Custom Audiences — you can use custom audiences whom you believe to be past step #1 already (or whom you’d like to have repeat an action)

Structure & Learning

It’s important to keep track of audiences that have worked, ones you’ve already saturated (which we’ll explain in more detail later on), and ones that you’d like to test out. So we recommend the following:

  1. Audience Lists — either on Facebook and/or in a spreadsheet, keep track of all the audiences you’d like to test out each month. This helps existing and new members of your team learn about what you’ve done faster, and also take over the account easily if you need them to.
  2. Generate Ideas — outside of what you know about your users, you can use Facebook’s Audience Insights Tool to get event more data about them after you get some conversions. Use it to come up with other sub-segments of your audience you think you should be testing.

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