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Lookalike Audience

A Lookalike Audience is a new target audience that shares similar characteristics with the existing one.

What Does “Lookalike Audience” Mean?

A Lookalike Audience is a group of new people generated by advertising platforms that resembles an existing source group in relevant characteristics.

For example, a company provides the advertising platform with a list of existing customers who have already made a purchase. The platform analyzes this source group, identifies common characteristics and behavioral patterns, and then searches for users with a comparable profile.

The company is not yet familiar with this new group, but statistically, they resemble those who are already customers. Thus, the lookalike audience holds great potential because the advertising specifically targets people who resemble the proven source group.

Where did the lookalike audience concept originate?

The concept was established by social advertising platforms, most notably Facebook, which introduced Lookalike Audiences in 2013. It is based on the initial data and the numerous signals the platform uses to categorize its users and their behavior. This allows for the identification of detailed patterns and the targeted search for similar profiles.

Stricter data protection rules and tracking restrictions have altered the available data sources, but the technology remains relevant. Depending on the platform, the concept is now also used under different names or with more AI-based methods.

Why is the Lookalike Audience important?

Acquiring new customers in the digital environment is often expensive, and broad-reaching advertising can be imprecise. Budgets allocated to reach a wide audience often end up reaching many people who have no interest in making a purchase.

Lookalike audiences offer a targeted group that resembles existing customers and thus has a higher likelihood of showing interest. Instead of advertising blindly, the budget is directed toward people with a predicted higher match, which can make acquiring new customers more cost-effective.

Advantages

  • Lookalike Audiences tap into new target groups with a high probability of a match.
  • They can lower the cost of acquiring new customers.
  • They can reduce wasted reach compared to very broad advertising.
  • And depending on the platform, the target audience can be tailored in terms of similarity or reach—ranging from very narrow and precise to broader and with greater reach.

Challenges

The quality of the lookalike audience depends heavily on the quality of the source group. If you submit an inaccurate customer list to the advertising platform for analysis, you’ll receive an equally imprecise lookalike audience. Due to data protection regulations, using this data requires a high degree of care. Additionally, the process depends on the platform and its data, which results in a certain loss of control over the outcome.

Furthermore, the identified lookalike audience is only an approximation and not an absolute truth.

Example

An online retailer of workshop equipment provides an advertising platform with a list of its best customers. The platform uses this to create a similar target audience consisting of people with similar characteristics and behavioral patterns.

Advertising to this group generates significantly more purchases per unit of budget than the previous campaign, which did not differentiate among its recipients.

Related terms

Targeting Targeting refers to the practice of delivering ads specifically to a particular target audience, rather than randomly displaying them to a broad audience. Social Ads Social ads are paid advertisements on social media platforms that can be targeted at specific audiences. First-Party Data First-party data is the information that a company collects itself and directly from its customers—with their consent, of course. Target Audience The target audience is a group of people or organizations that a company wants to reach.