We all know that online ads are the best way to reach our target audience, but how do we precisely target the right prospects? When you first start your advertising journey, you select audience attributes and advertise to that audience, hoping for the best. But once you have a decent roster of clients, you can begin using lookalike audiences, also called similar or actalike audiences.
Lookalike audiences are a superpower for your team. You identify your best customers and then load the list of them as “seeds” to the advertising platform. The advertising platform takes over from there, advertising to an audience that looks like your seed users. This is magic for your return on ad spend (ROAS), driving it down while increasing the your ad’s quality score.
Lookalike audiences allow you to capture brand new revenue, reduce your team’s manual effort, and expand access to specific customer segments.
Let’s look at an early stage SaaS provider. They had a few hundred clients, but they knew which of these clients were the best based on lifetime value (LTV). They created a data warehouse model based on LTV and a few other factors that contains just these users, then they created a daily sync to their ad platform, regularly updating this lookalike audience.
The ad platform now continually updates the audience this early stage SaaS provider is advertising to. This had a massive impact on their ROAS and has lead to more robust growth, all while saving time and money.