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The Solution to Dwindling Returns on Facebook Lookalike Audiences: Location Data

October 14, 2019 by Reveal Mobile

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Facebook continues its reign as most popular places to advertise by making it easy for marketers to boost posts and sponsor content. However, there appears to be trouble in Facebookville, particularly with its lookalike audiences feature. MarketingLand reports the 1% Facebook lookalike audience tool was “highly efficient for finding like-minded audiences once upon a time, but some marketers are seeing diminished outcomes.”  

Advertisers have depended on the effectiveness of Facebook’s lookalike audiences feature since its launch in 2013.  But without consistently reliable results from this “easy button” targeting, advertisers need to explore new methods of targeting using other features that Facebooks makes available and that are just as easy to use. 


Facebook lookalike audiences

Custom audiences, just as the name implies, enables marketers to target an even more highly curated audience using data sources they have access to or can get their hands on. Location data is one such type. Fundamental to geotargeting, location data enables marketers to get more out of their target audience on Facebook than they may have gotten with lookalikes. After all, location data allows marketers to target audiences based on physical places they visit in a given time period. Think car buyers, mattress shoppers, Kansas City Chiefs ticket holders, gym-goers — any audience that shows a clear and demonstrable affinity for a brand.  


Limited by Known Demographic Information

Digidust CEO, Pierre-Oliver Charles, told MarketingLand “the beauty of the 1% lookalike targeting was to help us reach the right people even when the demographics were not obvious”.  The same rings true with location data. Advertisers can build custom audiences based on the visitors to the locations they care about in the real world regardless of whether their demographic information is known or not.  Since location data is anonymous and non-discriminant, capturing mobile ad IDs that show up at physical locations gives marketers the ability to advertise to relevant cohorts of people simply based on those visits. If an advertiser knows demographic attributes, they can layer those on top of their custom audience of mobile ad IDs on Facebook.  

Restaurant IndustryDigidust uses Facebook to advertise.  “We work with a chain of restaurants, and our goal is not to build brand awareness but to bring more people to each of their locations,” Charles said. “In that particular case, the 1% lookalike audience that we base on their email databases works fine when we narrow it based on the location of the restaurants.” But what about those who go to the restaurant and do not provide their email addresses?  Using location-based audiences, Charles would be able to build the audiences for his client based on both the visitors who provided emails and those who did not, with even more scale.  Read a case study about how the Agency, Fresh West Vaughn used location-based audiences to increase conversion for their client Moe’s


Missing Out of Targeting Competitors’ Customers

Not only could a digital agency geotarget their clients’ current customers, but they could target competitive customers as well.  Using location-based audiences, agencies can deliver ads to the customers of their competitors, with the goal of converting them and to drive new and repeat foot traffic.  This sort of geoconquesting isn’t possible with a Facebook’s lookalike audience, perhaps another reason why marketers are beginning to sour on the capability.   


Over Saturation

The 1% lookalike audience has been viewed as something of a hack for advertisers, which has led to advertisers assuming these audiences will automatically perform better than otherGeofence Facebook Audiences That Convert audiences.  Because of this notion, the space is extremely crowded. When marketers are fighting for the same audiences, ads become less relevant, have a lower impression rate, and the cost per impression (CPM) rises.  Using a custom audience based on location data and mobile ad IDs, marketers can keep their audience uber targeted.  


Limited by New Privacy Practices 

When it comes to location data, privacy has become an increasingly hot topic.  Because of the changes Facebook and other ad platforms have made over the past few years, there is greater scrutiny over data, and it’s becoming somewhat less accessible to marketers. This may also be causing the dwindling results of the 1% Facebook lookalike audience. Using privacy-compliant, anonymous location data, advertisers do not run into any roadblocks that may be making lookalike audiences a less viable option. Custom location-based audiences are not based on any personally identifying attributes.  

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Cookie Clearing

Another roadblock to lookalike audiences is the ability people have to clear their history and cookies, deleting their online activity records.  Facebook custom audiences are built from a variety of attributes, including users’ browsing history. When cookies have been cleared, the advertiser’s audience becomes less reliable.  Location-based audiences are based on historical, real-world visits rather than a digital journey a person is used to deleting periodically. An actual visit to a physical location is a stronger indicator of interest and possible purchase than browsing on a website, providing an email address, or liking a page on Facebook.  


End-User Experience

Facebook is undergoing an overhaul with their privacy practices. According to MarketingLand, “diminishing returns advertisers are seeing from 1% lookalike audiences may just be the tip of the iceberg as the company transitions to a privacy-focused messaging platform.”  This shift may impact the way users interact with ads on social media, so marketers need to find a way to stay relevant. If the 1% Facebook lookalike audience is not the way to do it, advertisers need to find a new and better way to build their target audience. Location data is a viable and compelling solution. 


Getting Started With Location-Based Audiences

Reveal Mobile's Visit Platform is Flexible and ScalableThere are two ways to acquire location-based audiences: an audience marketplace or an audience provider.  Audience marketplaces, such as Adsquare, PushSpring, Kochava, provide their customers with pre-packaged audiences within specific time periods.  For example, an advertiser can purchase a list of all those who visited a Starbucks over the last 6 months, or “Target Shoppers” over the last 90 days.  With the list of MAIDs, the advertiser can easily import the CSV file into Facebook and serve ads to that audience, or layer Facebook targeting on top of the audience to get more specific.  


Audience providers are for marketers who need greater flexibility and more specificity when building audiences.  With audience providers, marketers have the ability to customize their lookback period and select precise locations that are important to them. As a result, the audience is more tailored and ads can be exponentially more relevant. For instance, if once quick-serve restaurant wants to target the customers of its competitors, the audience created with an audience provider can include only those locations the geoconquesting advertiser deems relevant for a specific time period — right down to the day.  Using this approach, advertisers can be fully confident their messaging will be delivered to the right people, driving far better results. With location data solutions available and easy to use for digital marketers, it’s little wonder that geofence Facebook lookalike audiences are on the outs.  Read more about how to get started with geotargeting.