With the Holidays Fast Approaching, Not Only Is It the Time to Tighten up Your Holiday Strategy and Boost Engagement with Your Core Customers, but Also to Find Ways to Bring Searching Shoppers to Your Site.
Enter Targeted Advertising Using Lookalike Audiences.
What is a Lookalike Audience?
Lookalike audiences enable ad platforms, such as Facebook and Google Ads, to take a list of email addresses or phone numbers (known as a seed list), and find a second group of people, using proprietary algorithms, that resembles your original list. Translation: you can target potential new customers by finding the common thread between your current customer segment and serving up ads to similarly situated people.
Why You Should Care About Lookalike Ads
During the 2018 holidays, eCommerce grew a staggering 16.7% to $126 billion in revenue. This is by far the biggest growth across all revenue generated from retail during the holiday season. Furthermore, for the first time ever, smartphones drove over half the traffic and accounted for 31% of the revenue. Since people are looking to the internet to do most of their shopping, it’s important you’re serving up relevant ads and creating brand awareness on the platforms that they use on a regular basis — Google and Facebook.
Take Down the Competition by Targeting with Lookalike Audiences
The competition during the holidays for advertising space is pretty high. With more companies expanding into advertising during the holidays comes more bids, driving up the costs to beat out your competition. By being judicious and targeting key audiences that, in theory, should convert, you’re limiting how quickly you may blow through your advertising budget. If you’re planning on including advertising on Google and Facebook during the holidays as part of your strategy, make sure to up your lead generation game and beat out your competitors by creating segmented customer seed lists that meet the following criteria:
- Ideal list size is 2,000 contacts — Go much bigger and the algorithm may have trouble finding the common thread, creating a larger but inaccurate pool of potential leads.
- Use metrics to guide you — Instead of just chopping your list into sections, take a look at your key metrics and figure out what type of customer you want to bring to your site and how to find them (more on that below).
- Take behavior into account when building your seed list — You might be interested in creating a seed list of your best customers; however, think about how you can narrow this down. Do you want a list of all your best customers or just best customers who shopped with you during the holiday season? Taking your segmentation one step further, and looking at user intent will help you pull the right people into your seed list to create a more stringent list for the algorithms to dissect.
Lookalike Audience Seed List Suggestions
As mentioned above, your lookalike audience is only going to be as good as the seed list you provide. To that end, it’s imperative that you’re actively thinking through how each audience list you’re creating is built, utilizing any and all behavior, customer, and purchase data that you have at your fingertips. While there are no bright-line rules for how to create your seed lists, here are a few examples of segments you can use to get started:
Holiday Best Customers
Step 1: Pull a list of your best customers, either using RFM analysis, your personalization platform, or CRM.
Step 2: Segment this list even further by limiting the purchasing window to best customers who made purchases during the holiday season. Research shows that the top 10 shopping days during the 2018 holiday season were: Cyber Monday, Black Friday, Thanksgiving, November 25, November 24, November 27, December 10 (Green Monday), December 11, December 17, and December 9. While this information may help you decide what time frame you want to limit your segment to, you should take a look at your data and see where you saw spikes during the holiday season and filter accordingly.
Holiday Biggest Spenders
Step 1: Pull a list of customers who spent the most using RFM analysis, your personalization platform, or CRM.
Step 2: Limit this segment using a set time frame reflecting your holiday buying season (see above for my thoughts on that).
Most Loyal Customers
Step 1: Pull a list of customers who have purchased the greatest number of times from you using RFM analysis, your personalization platform, or CRM.
Step 2: You can limit this segment to the holiday time frame or leave this segment broader, casting a larger net for new loyal customers who will stick around after the holidays.
Lookalike Audiences: Only as Good as Your Seed List
The important thing to remember when creating lookalike audiences is that your seed lists have to be buttoned up. Make sure you’re using all your available tools to create seed lists that are informed by data. Once you’ve got your seed list(s) created, work with your designers, or our agency, to create jaw-dropping display ads, and simply follow the prompts in Google Ads or Facebook to implement your highly-targeted, relevant ads to boost your lead generation efforts.