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How Much Should You Be Paying for Digital Marketing?

by Rocket on 
July 10, 2017 | 
Social Media Ads

Target the right people with Facebook's value-based lookalike audiences.

The first are senior marketers making a pitch for why their marketing budget needs to be increased. They know decision-makers are typically numbers driven and want to present them with a compelling argument.

Then there are the decision-makers themselves. Often, they look at marketing as a somewhat intangible expense they’d love to reduce to improve the bottom line. Being able to prove they’re spending too much seems like a great place to start.

First off, I’m going to give you the numbers you seek. But read on, it’s critically important to understand that there are some factors you need to take into account when deciding the percentage that’s right for your business.

facebook audience diagram

Facebook has roled out Value-based Lookalike audiences – a game-changer for those running complex Facebook campaigns to prospect new audiences of higher value.

Many marketers using the Facebook Ads platform know that one of the biggest challenges isn’t necessarily building out campaigns, setting budgets or even producing content. It actually is to ascertain the right audience relative to the level of commercial intent your ad is aimed at.

 

Why use Value-Based Lookalike Audiences?

Value-based Lookalike Audiences are essentially an extension to Lookalike Audiences. It allows you to find potential customers similar those of your most valuable customers – delivering you the best ROI.

Facebook insists that the best way to approach this is to upload a complete list of customers with the entire LTV (Life-time Value) – that includes the lower and higher LTV customers. It is important not to pull out the lower value customers as Facebook will then use this data to assist in isolating a list of high LTV prospects with better accuracy in a more quantifiable way.

How to Create a Value-Based Lookalike Audience

1. The first step will be to compile a customer file with customers who have low and high LTV values.

compile a customer file
  • Ensure that you use the same currency value for each customer.
  • Do not use negative values
  • Remember to include both low and high value customers. This will allow Facebook to deduce a better a match rate against potential high value prospects.

2. Head over to the Audience section within your Business Manager.

Audience section within your Business Manager

3. Under ‘Create Audience’, select ‘Custom Audience’.

‘Create Audience’, select ‘Custom Audience’.

4. Within the Create a Custom Audience Dialogue box, select ‘Customer File’.

Create a Custom Audience Dialogue box

5. Assuming this feature is now available in your Ads Manager platform, you will see the new LTV Section (as below).

Create a custom audience

6. The next screen will display some preliminary information about the new LTV feature. Click on ‘Get Started’ to proceed to uploading your new customer file.

preliminary information about the new LTV feature

7. This screen will be quite similar to the standard upload screen, however, you will notice a new section prompting you to include a new column for LTV (As we have covered this in step 1, we can continue to ‘Upload File’). Once you have uploaded your file, name your new Audience and click Next.

name your new Audience and click Next

8. Once you have uploaded your file, name your new Audience and click Next.

9. Facebook will then Upload, Hash and create your Audience.

10. Now It’s time to create your Value-based Lookalike Audience. Simply head back to the Audience section and create a Lookalike Audience.

Value-based Lookalike Audience

11. As you normally would, select your newly made LTV Custom Audience, Select your location, Audience Size (Use 1% for your first time) and then ‘Create Audience’.

Create a lookalike audience

How To Apply Value-Based Lookalike Audiences to your Facebook Campaign

Now that we’ve created an audience of high-value prospects, it is important to develop or tweak your existing strategy to encompass your new value-based lookalike audience at the lower end of your funnel, with strong Calls to action. As with any prospecting campaign, ensure that you have a custom Re-marketing audience specific to your high-value prospects – this way, you can tailor creative and content based on how you propose to re-engage your high-value prospects!

Remember, Test, Measure, Refine. Test, Measure, Refine. Vital to the success of your new campaign will be deploying different types of content in the early stages to understand how your new audience engages and to subsequently measure ROI to find the right fit for this segment.

Your value-based Lookalike audience will require you to evaluate performance over a longer period as we are driving high, long-term value prospects. Over time, if your new audience is performing well, you will see exponential increases in your ROAS.

Unfortunately, there is no set and forget formula here. Should you choose to embark upon implementing new features, ensure that you dedicate the time to really reap in the benefits here. Alternatively, if you require a helping hand with your Facebook Ads, feel free to get in touch on 02 8310 2393 or send us a message any time.

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