One of the biggest difficulties faced by new advertisers that have a small audience is to find out the most effective target group. Facebook has provided one more tool to advertisers with the addition of Lookalike Audience that are value based.
While I am writing this article, select Advertisers have got the feature of value-based Lookalike Audience and Lifetime Value (LTV) Custom Audiences.
Dedicated help center pages are available for this feature and this is an indication that it has been introduced not just for testing, but as a new roll-out.
Let us take a good look as to what is meant by Lifetime Value Custom Audiences and value-based Lookalike Audiences, how they can be created and how they might be used.
Lifetime Value (LTV) Custom Audiences
Customer Lifetime Value is the profit that will be earned by you from a given customer during the lifetime of the relationship.
All the customers are not created equal. There is difference in customers even if they make the same purchase. More value is provided by some customers as compared to others.
Some customers are only limited to just one purchase, but there are others who just keep coming back again and again. They are almost ready with their credit card to be swiped.
It is important to tell Facebook about the lifetime value as it will enable it to find out more such potential customers.
We will dig deeper one how to create thing later on, but first you should understand it clearly that the Lifetime Value Custom Audience is not about targeting a new set of audience. In this case you already have a set of customers, but only a new column of data is framed here.
The main objective is to create a cold audience that has the potential to convert to positive results in future.
Value Based Lookalike Audience
The first objective is to provide a lifetime value for all customer to Facebook within a data Custom Audience. Don’t just provide a list of most valuable customers, but provide a list that enable to differentiate between the least valuable with the most valuable.
It is only then it will be possible to form a value-based Lookalike Audience. This will enable Facebook to concentrate on those that will give the most value when it finds other with similar characteristics across Facebook.
The end result is to form a cold audience that has a good chance of converting to promising results.
Create LTV Audiences
To start the process of creating Custom Audience, first select “Customer File.”
In case this feature is available to you, an option for “Customer file with lifetime value (LTV)” will be visible to you.
One this has been selected, you will be asked to go through a similar process that is needed to create a custom audience through a customer file.
A couple of differences will be noticed here.
First a column needs to be included that has a range of customer values. Second, a final step will be required to create a Lookalike Audience.
Here also, the main objective is to create a Lookalike Audience once again.
These tips from Facebook will help you:
1. Represent Value Only in Dollars: For example, do not include rankings or ratings. A dollar value should be assigned to each customer.
2. Negative Values Should Not be Used: Particularly to differentiate between undesirable customers. These will not be counted by Facebook.
3. Full Range of Customers Should be Included, Starting from Low to High: This enables Facebook to chaff out customers that are undesirable from the great ones.
4. Make sure the Same Currency is Used Throughout: Otherwise, it will be assumed by Facebook that the same currency will be used.
5. No Other Punctuations Except for Decimals for Cents: This file should contain as much customer data as possible that can be aligned with Facebook user. Match rate can be increased by using 15 identifiers.
How to Calculate Lifetime Value?
This entire process works on the assumption that you know how to calculate lifetime value of your customer. In the most cases this process is done manually. And so far as I know, this thing is not easy to execute.
In case you have any doubt, it is better to keep it simple. When the customer file is generated, put in columns for purchased product and the price of that product. The value of such purchased can be added by using a formula.
With some CRM software, it is much easier as compared to others.
Create a Lookalike Audience that is Value-based
Since Facebook has a client list including values, you will have the capacity to create a Lookalike Audience of those like your most significant clients. You’ll have to choose the nation for every group of onlookers you make.
As of now, I don’t have a screen snatch for this procedure. In any case, I accept it’s the same than making a Lookalike Audience off of whatever other source.
Instructions to Use Value-Based Lookalike Audineces
Facebook prescribes that you utilize this gathering of people for bring down channel focusing on. For instance, utilize it for advancing an item as opposed to advancing a blog entry or pick in.
Facebook additionally says that your cost per result might be higher than common at first, yet that you should concentrate on the general profit for promotion spend. Since Facebook is creating a crowd of people of individuals well on the way to have a high lifetime esteem, your concentrate shouldn’t be fundamentally on a solitary activity.
This is all hypothesis, obviously, that should be demonstrated, in actuality. Furthermore, how we utilize a component isn’t generally as it’s expected.
My suggestion: Experiment. Attempt it for advancing substance. Attempt it for advancing pick ins. Attempt it for advancing items. You could possibly get awesome introductory outcomes. In any case, you won’t know until the point that you attempt.
In any case, Facebook’s point concerning return on advertisement spend (ROAS) is a decent one. In the event that the concentration of making these gatherings of people is on lifetime esteem, we should look past the underlying activity and screen what these individuals do through the span of days, weeks, or months.
Eventual fate of Lifetime Value Audiences?
When I initially caught wind of this, I accepted it would be founded on the Facebook pixel. I’m astounded that the procedure is totally manual, constraining promoters to figure and transfer client esteem.
It’s to some degree astounding this is vital. Facebook knows who hits a transformation page. They have the ability to dole out a lifetime — or if nothing else long haul — estimation of a solitary client over days, weeks, months, or years.
The confinement could be “lifetime.” They can discard site information following six months for Website Custom Audiences, so they might not approach more than that as of now. Requiring more could be a capacity issue (however I’m absolutely no tech individual).
Notwithstanding, gone ahead… This could without much of a stretch be streamlined for the sponsor who has routinely utilized Custom Conversions and occasions.
Do you have esteem based Lookalike Audiences? How are you utilizing them, and what sorts of results would you say you are seeing? On the off chance that you don’t have them, in what manner may you utilize them?