When it comes to running ads on Facebook, there are three types of audiences you can target. They are:

  • Core Audiences
  • Custom Audiences
  • Lookalike Audiences

Without any question, the greatest power of Facebook ads comes from the ability to use custom audiences. The difference between targeting custom audiences and the other types of audiences is the difference between advertising to a “warm” audience vs. a “cold” audience. Custom audiences are audiences that have had some type of engagement with your business in the past. So, generally speaking, there’s a much higher chance that there is familiarity (if they remember their past interaction). Staying familiar and top of mind with people who’ve interacted with your business in the past can be tremendously important. They are the ones who are most likely to do business with you again and perhaps refer their friends.

Many professional marketers will say that email marketing is the most effective type of Internet marketing. That’s because it’s targeted to the people who are familiar with the business, and because the cost for it is extremely low. It’s the most bang for the buck. The highest conversion (and referral) rates come from those who know the business, the value it offers, and its credibility. Your email marketing is for staying top-of-mind with those people. It could be said that custom audiences are Facebook’s answer to email marketing – highly targeted and low cost (because it’s so well targeted). But instead of reaching people in their email inbox, these ads reach people in their Facebook News Feed and other potential areas, such as their Instagram feed, and in Messenger.

Now that I’ve explained why custom audiences are where the greatest power is in Facebook advertising, here are some overview descriptions of the three different audience types.

Core Audiences

Core audience targeting is the type of targeting that most people are familiar with if they have used Facebook advertising in the past. It allows you to choose who will see your ads based on:

  • Location – Geographic areas, such as countries, states, and cities
  • Demographics – Factors like gender, age, education level, and job title
  • Interests – The subjects that people have shown in interest in while using Facebook
  • Behavior – Various aspects of behavior, including shopping, purchasing, and device usage
  • Connections – Include or exclude people who are connected to your Facebook Page or event.

When it comes to demographics, interests, and behaviors, you can choose to narrow the audience by overlapping selections. For example, you can choose people who are interested in both volleyball and motorcycles, or people who like cruises and have made an online purchase recently.

As you build your core audience in Ads Manager, Facebook shows data about the potential reach of your ads based on your targeting selections.

Once your made all of the selections in building your core audience, you can then choose to save the audience. This allows you to use the same selections in the future without having to go through the process of building it again.

Custom Audiences

As I mentioned above, Custom Audiences are usually the most effective type of targeting for Facebook Ads. These audiences are built from previous engagement with your business in the past. There are two categories of sources for custom audiences: Your sources and Facebook sources.

Here is a list of some options for creating custom audiences with your sources:

  • Visitors of your website (the Pixel is needed for this)
  • Users of your app
  • An uploaded list of customer data (such as email addresses or phone numbers)
  • Offline sources, defined as people who have been to your store, called by phone, or had other offline engagement

Here is a list of some options for creating custom audiences with Facebook sources:

  • People who watched one of your videos on Facebook (or various percentages of it)
  • People who interacted with a lead form of yours on Facebook
  • People who viewed an Instant Experience in your Facebook ad
  • People who’ve engaged with products in your Facebook store
  • People who’ve engaged with your Instagram account
  • People who’ve engaged with your Events
  • People who’ve engaged with your Facebook Page and/or posts
  • People who’ve engaged with your On-Facebook Listings (Marketplace items for sale)

Keep in mind that there is a set window of time for most types of custom audiences. For example, your website visitor audience can include a maximum of 180 previous days. If a shorter window of time is desired, a custom audience can be created for that. For example, you might want to offer a discount through a remarketing ad to anyone who has visited your website in the last four days.

If you are planning to use custom audiences for your ad targeting, keep in mind there are rules that apply, as well as transparency features for ad viewers. For example, in the drop-down menu of each ad, ad viewers can click on “Why am I seeing this?” It may indicate whether the advertiser reached them through their phone number or email address.

Here is a statement from Facebook regarding the use of customer lists for custom audience building:

As always, advertisers who use Custom Audiences from a customer file are ultimately responsible for having any necessary permission to use and share people’s data. While these responsibilities haven’t changed, advertisers will start seeing more regular, detailed reminders of their obligation to help protect people’s privacy before they run their ads. We will also now require everyone on an ad account uploading Custom Audiences to accept the terms, rather than only requiring this from the admin on the account.

Lookalike Audiences

A Lookalike Audience is an audience that can be created based on qualities of other audiences you use for ad targeting. When you start the creation process of a Lookalike Audience, you choose a source audience (a custom audience) for Facebook to model. In order to get a good sample of who to target, Facebook recommends choosing a source audience with between 1,000 and 50,000 people. You can choose the size of the Lookalike Audience during the creation process. For example, do you want the audience to include 2,000 people or 20,000? In some cases, a bigger audience will necessitate a broadening of the modeling criteria.

Whether or not using Lookalike Audiences will be effective for your business can depend on many factors. For example, how good is the source audience? Are there clear common qualities that Facebook can find from the people in the source audience? Also, what common qualities are necessary for focusing your ad targeting? For example, If you want to target moms of toddlers who are interested in Gucci handbags, how confident can you be that Facebook will be that specific? Perhaps the Lookalike Audience will be built from all moms of toddlers, regardless of their affinity for Gucci handbags.

Use Lookalike Audiences with caution, and remember that Facebook’s way of modeling could be very different than you are expecting.

Which types of audiences should you use for your advertising?

As I mentioned above, a “warm” audience will almost always lead to more success than a “cold” audience. That’s why any Facebook advertising strategy should at least attempt to incorporate custom audiences. The advantage of a custom audience is that they are likely to be more familiar with the business, having engaged with it somehow in the past. One successful advertiser I know spends the larger part of his budget on driving traffic to his blog articles. Then he spends a smaller amount of his budget trying to convert those who engaged the most with his website and blog. So, he drives traffic with ads to create familiarity with his brand, creating a warm audience. Once those people know his brand, he uses ads more focused on doing business.

Core audience advertising might be necessary to help build traffic and familiarity. After all, you have to start somewhere. But it’s best if that investment is leveraged to help create custom audiences that can be targeted later.

Lookalike audiences are unpredictable. My tendency is to use them when there is a very clear and somewhat broad common quality in the source audience. And even then, proceed with caution. Do some testing to see how it goes. As with all advertising, the results will often surprise, and there’s no substitute for testing.

Join my “Learning Club” email list to be informed of upcoming free webinars, important marketing news, and other free learning resources available.