Localogy Insider invites experts in a field relevant to our community to share practical advice on how to do the business of local better. In this ExpertTake, Tiger Pistol‘s Laura Kraay offers the first of a three-part series on best practices for creating Facebook audiences. 

Facebook’s overall cost of advertising is down between 20% and 40% across (dependent on placement) its family of apps. At the same time, previously passive users are becoming more active and engaged. This is the perfect recipe for businesses that want to re-engage their communities with social, gaining brand impressions while usage is at its peak and competition is at its lowest.

Will messaging shifts be necessary? Of course, depending on the state of your location. Is it open, closed, delivering, or shifting to online sales? Engaging with consumers and the community on a personal level will establish a long-lasting relationship. And ads should be created with messaging and creative in mind to drive these connections, creating a foundation for recovery once locations are fully open again.

Creating the perfect ad leads to the next step — who are you going to show it to?  Here we’ll go over terminology and best practices for creating audiences for your social ads. If you’ve been asking questions about audience size, detail targeting, or Facebook custom and lookalike audiences, this is the guide for you.

Audience Size

When creating audiences, keep an eye on the Potential Reach. Facebook ads can run with a minimum audience of 1,000, but if an audience is too small, Facebook may have trouble finding users to show your ad to. This means your ad might underperform or be shown at a high frequency, causing ad fatigue among users seeing the ad over and over again. While there is no real “sweet spot” for audience size, we recommend trying to create an audience of at least 50,000. If you’re really in a pinch and are creating an audience in a lower populated area, try and keep the size to at least 10,000.

Detail Targeting

When adding detail targeting options, you can select from a variety of Facebook interests. Use OR targeting instead of AND (also called narrow) targeting when you want your audiences to be larger. Let’s talk Dogs, Cats, and Pets to illustrate the point.

In OR targeting, you would fall into the audience if you liked any one of those options (dogs, cats, or pets), but for AND targeting, you have to like all three. That’s why AND targeting produces a smaller audience. You can see the remarkable difference this can make in this illustration, where the audience difference between OR and AND is 590,000 people.

In general, it’s best not to overuse detail targeting. A broader audience may lead to potential new customers — you never know who may be interested.

Curious about detail targeting but want to use it to greater purpose? Learn how the conversions objective optimizes the delivery of your Facebook Campaign specifically towards a conversion event, rather than driving general traffic to your site or for brand awareness. This means you can still use detail targeting, but also further optimize for those people more likely to take a specific action on your page like “Add to Cart” or “Sign Up.”

Custom Audiences

Looking to apply remarketing strategies? That tactic begins with custom audiences. To create a custom audience, you will need to provide Facebook with identifiers about your customers (like email addresses or phone numbers) or have a Facebook Pixel installed on your website.

Whether the uploaded identifiers or the data from your Pixel, this information is compared with the information on Facebook profiles. The overlapping group becomes your custom audience. To ensure the information remains secure, it undergoes a hashing process before it’s sent to Facebook. (Hashing turns the information into randomized code.) After the custom audience is created, Facebook deletes the information.

This is a great way to show your ads to people who may have already interacted with your business. For example, having a Facebook Pixel installed means you could create audiences from your website traffic. Specific pages or events can also be used. A retail location who wants to focus on their summer shoes could select users who visited the “Sandals” section of their website.

You can also use custom audiences to exclude people from viewing your social ads. A fitness center whose objective is to get new members might exclude a custom list created from membership email addresses and names. This would ensure that their current customers aren’t in the ad’s audience, ensuring the business doesn’t waste its precious ad dollars.

When Beekeeper’s Naturals wanted to increase orders for its product sampler box, they showed video ads to a Custom Audience of people who had visited the Beekeeper’s Natural website within the last 30 days, added the product to their cart, but did not purchase it. In return, they saw a 39% increase in sales of a specific product bundle. They also had a 4.5X increase in return on ad spend. Custom audiences offered them the ability to show their ads to users who had already shown a demonstrated interest in the product.

In order to upload a list successfully, you’ll need at least 100 matches. This means your list might have to be a bit larger than 100 because it’s matching the information you’re providing with that on a user’s Facebook profile. If your list is uploaded, but you worry it’s a bit small for retargeting just yet, a lookalike audience might be more suited to your needs.

Lookalike Audiences

A Lookalike Audience offers a way to reach new people who are likely to be interested in your business because they’re similar to your best existing customers. How does it work? Like a custom audience, you need to upload a data source. (It undergoes the same hashing process mentioned above.) Facebook then finds users with similar characters or qualities to that of your source.

In the “Power of the Facebook Pixel” Chris Mayer explains how this works in the case of a Lookalike Audience created from website traffic:

“A golf-related e-commerce website might have a lot of users visiting their website, who also like the PGA Tour Facebook Page, and/or are ‘interested in’ golf. The Lookalike Audiences will account for this. Facebook will literally find more people who like the PGA Tour Facebook Page, are also “interested in” golf, and share similar traits and demographics as the website visitors.”

Although Facebook doesn’t reveal which traits are generated, the value lies in its ability to optimize your audience. Clothing retailer Trina Turk was hesitant to turn to Facebook advertising because they were unsure if they could target enough people willing to spend money on a luxury brand. They first ran a dynamic campaign for broad audiences. Utilizing that campaign’s learnings “the team created and reached out to lookalike audiences based on the new shoppers who clicked through to the website from the dynamic ads.” Their year-over-years results for the following period speak to the power of the Lookalike Audience:

• 75% increase in return on ad spend
• 33% decrease in cost per purchase

These results are dramatic, so it’s important to highlight the two-part campaign here. Running a broad campaign helped them first get more website traffic. Just like with custom audiences, having an ample amount of data helps produce better results. If you’ve just installed your Facebook Pixel, first try running a broad or detail targeting campaign to further establish your base audience.

Hungry for more? You’re in luck. The next part of this series will explain how you can utilize A/B testing to find your most effective audience.