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Imagine this: You’re a small business owner, excited to launch a new Facebook ad campaign. You create a Lookalike Audience, expecting to reach thousands of new potential customers just like your best ones. But after spending weeks and hundreds of pounds on ads, the results are disappointing, low engagement, few leads and no significant sales boost.
This isn’t just your story. Many SMEs struggle with Facebook Lookalike Audiences due to challenges like poor targeting, weak ad creative, or suboptimal setup. While research shows that well-optimised Facebook ads can deliver excellent results, campaigns often fail when businesses overlook key factors like audience segmentation and clear messaging. The good news? With a proper strategy, these obstacles can be overcome.
Users with active Facebook ad campaigns saw an average increase in page clicks of 96%, according to industry reports! Lookalike Audiences can be a game-changer when done right, but common mistakes, like targeting overly broad audiences or using poor source data, turn them into a money pit instead of a growth driver.
In this blog, we’ll explore why most SMEs waste money on Facebook Lookalike Audiences and share actionable tips to fix these issues. By the end, you’ll know how to create effective Lookalike Audiences that deliver real results for your business.
Facebook Lookalike Audiences is a powerful tool that helps businesses reach new people who are similar to their existing customers. By using data from your source audience, such as website visitors, email subscribers, or past buyers, Facebook’s algorithm identifies and targets users with comparable behaviours and interests.
The process starts with a source audience, typically a Custom Audience you’ve already created. Facebook uses this data to find users who share traits with the people in your source audience. For example, if your source includes loyal customers who’ve purchased high-ticket items, your Lookalike Audience will target users with similar purchasing behaviours.
For small and medium-sized enterprises, Lookalike Audiences offer a shortcut to reaching a broader yet relevant audience. They eliminate much of the guesswork involved in targeting, making them an attractive option for businesses with limited resources. However, their success hinges on how they’re set up; a poorly chosen source audience or broad targeting can render them ineffective.
Despite their potential, many SMEs find themselves disappointed with the results of Facebook Lookalike Audiences. Missteps in setup, strategy and execution often lead to wasted ad spend and missed opportunities. Here’s a deeper dive into the most common pitfalls:
Lookalike Audiences range from 1% (most similar) to 10% (broader) of the population in a target region. Many SMEs opt for larger percentages, hoping to reach more people. However, broader audiences often dilute relevance, leading to wasted ad spend on users who aren’t genuinely interested in your product or service.
This was evident in a campaign Mr Digital ran for CERT, a property sector client. By shifting focus to high-intent audiences, the campaign achieved a 68% reduction in cost per conversion within the first month. This example highlights the importance of refining audience size and targeting precision to minimise wasted spend and maximise results.
The performance of a Lookalike Audience depends entirely on the quality of your source audience. Many SMEs use generic sources like all website visitors or social media followers. These groups may include users with low intent, bots, or people who interacted with your brand out of curiosity rather than genuine interest. A poorly chosen source audience sends Facebook’s algorithm in the wrong direction, resulting in irrelevant targeting.
High-value source audiences, such as repeat customers, email subscribers who’ve engaged recently, or users with a high customer lifetime value (LTV), are the key to success. These data sets allow Facebook to identify traits that correlate with genuine interest and purchase behaviour.
Many SMEs take a “set it and forget it” approach to Lookalike Audiences. They create the audience, launch the campaign and assume the results will flow in. However, Facebook ads require constant monitoring and tweaking to achieve optimal performance. Without A/B testing ad creatives, audience sizes and messaging, SMEs miss critical opportunities to refine their campaigns.
Regular testing also helps identify underperforming segments and allows you to redirect your budget to higher-performing audiences. For example, testing different Lookalike sizes (e.g., 1% vs. 2%) can reveal the sweet spot where engagement and ROI are maximised.
Even a well-constructed Lookalike Audience can fail if paired with weak ad creatives. Bland visuals, unclear messaging, or irrelevant offers reduce engagement, causing your campaign to underperform. For Lookalike Audiences to succeed, your ad creatives must resonate with the traits of the targeted users. Personalised visuals, strong CTAs and offers that align with user interests can significantly improve results.
Another common mistake is mismanaging budgets. SMEs often spend too much on Lookalike Audiences without balancing their efforts with Custom Audiences or interest-based targeting. Diversifying your ad strategy ensures you’re not overly reliant on one tactic, spreading risk and maximising returns.
By addressing these mistakes and focusing on precise targeting, testing and creative alignment, SMEs can turn Facebook Lookalike Audiences from a costly misstep into a powerful tool for growth.
The success of your Lookalike Audience starts with selecting the right source. Here’s how to do it:
The more specific and valuable your source audience, the better your Lookalike Audience will perform. Examples of strong source audiences include:
Broad sources like “all website visitors” or “all email subscribers” can lead to diluted targeting. Instead, segment your source audience to focus on users with clear purchase intent or loyalty to your brand.
Regularly update your source audience to reflect your most recent and relevant data. For example, if you’re targeting a seasonal product, your source should include recent buyers or visitors with an interest in that product.
By choosing a high-quality source and refining your data, you’ll give Facebook’s algorithm the information it needs to build an effective Lookalike Audience that delivers results.
Testing and optimisation are essential for turning Facebook Lookalike Audiences into high-performing assets. Here are the best strategies to maximise their effectiveness:
A/B testing helps you identify what works best for your campaigns. Test different variables such as:
Monitor results carefully, focusing on metrics like click-through rate (CTR), cost-per-click (CPC) and return on ad spend (ROAS) to refine your approach.
Your Lookalike Audience size should align with your campaign objectives.
Start small and expand as you gather more data to ensure your budget is spent effectively.
Lookalike Audiences alone may not always deliver optimal results. Layering them with interest-based targeting can refine your audience further. For example:
This strategy ensures your ads resonate with users who align closely with your business goals.
Creating high-performing Facebook Lookalike Audiences requires more than simply generating them from your existing data. Strategic refinement, regular updates and careful testing are essential for maximising results. Here’s how to get the most out of your Lookalike Audiences:
Your Custom Audience is the backbone of your Lookalike Audience. The better the quality of your Custom Audience, the more accurate and effective your Lookalike Audience will be. To ensure high-quality results:
For example, a fashion retailer might build a Lookalike Audience using customers who’ve spent over £100 in the past 90 days rather than all past purchasers. This precision improves targeting and relevance.
A static Custom Audience can quickly become outdated, reducing the relevance of your Lookalike Audience. To keep your campaigns aligned with current trends and user behaviour:
For example, if you’ve launched a seasonal product, update your source audience with buyers who’ve recently purchased that item to create a targeted Lookalike Audience.
Lookalike Audience size plays a significant role in determining the balance between precision and reach. Adjust your size based on your campaign objectives:
Test different sizes to identify the sweet spot for your specific goals.
Don’t rely on a single Lookalike Audience for your campaigns. Instead, create multiple audiences based on different source data. For instance:
This diversification allows you to target various customer segments with tailored messages, increasing overall campaign effectiveness.
To further refine your audience, combine Lookalike Audiences with additional targeting criteria, such as location, interests, or behaviours. For example:
Layering improves targeting precision, helping your ads reach the most relevant users.
No Lookalike Audience is perfect from the start. Regular testing and optimisation are crucial for improving performance:
By treating your Lookalike Audiences as a dynamic tool that evolves with your business and campaigns, you can achieve consistent, high-performing results.
Even the most refined audience won’t convert if your ad creatives don’t resonate. Customise your visuals, messaging and offers to match the traits of your Lookalike Audience. For example, an audience based on high-LTV customers might respond well to premium product ads, while cart abandoners may need discount-focused ads to re-engage.
Facebook Lookalike Audiences can be a game-changer for SMEs, offering a powerful way to reach new, highly relevant customers. However, without the right strategy, they can quickly become a source of wasted ad spend.
By understanding and addressing common pitfalls, such as targeting overly broad audiences, using low-quality source data and neglecting testing, you can significantly improve your campaigns. Refining your Custom Audiences, regularly updating your source data and layering Lookalike Audiences with interest-based targeting are just a few steps that ensure your ads reach the right people at the right time.
Success doesn’t stop at audience creation. Continuous testing, optimisation and alignment between your ad creatives and audience traits are essential for driving results. Whether your goal is to boost conversions, increase brand awareness, or reduce cost-per-acquisition, a well-executed Lookalike Audience strategy can help you achieve it.
Struggling to get the most out of your Facebook Lookalike Audiences? Let our experts help you create high-performing campaigns that deliver real ROI. Contact us today!
Joshua is a Senior Content Writer with a diverse background in journalism and storytelling. He has a passion for crafting engaging and informative content that resonates with target audiences. Joshua's experience in writing and his understanding of digital marketing ensure content is both captivating and effective in achieving marketing goals.
Shiyas brings years of experience in digital marketing to his role as Client Success Director. He has a proven track record of developing and executing successful strategies across various online channels, with a focus on driving business growth and exceeding client expectations.
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