Facebook is one of the world’s largest advertising platforms for a reason. Every month, more than 5 million companies purchase ads on the network. But too many of them don’t yet take advantage of one of its most powerful targeting tools: custom audiences.

The core concept is simple. You upload a list of your existing leads or other contacts, and Facebook dynamically matches that list with existing profiles on its network. This type of pre-definition ensures that every dollar you spend on advertising actually goes to an audience segment you know to be relevant.

That’s significant, considering that 62 percent of business owners say that their Facebook ads miss their intended target. With this guide, you can get on the good side of that equation, maximising your digital advertising ROI in the process.

3 Common Types of Facebook Ads Custom Audiences + 42matters’ Ads Audience Finder

The term custom audience actually describes not just one, but three distinct types of targeting within Facebook’s advertising platform. Before going into the specific setup of your campaign, you need to understand how each of them differs to choose the right one for your needs.

  1. Custom Audience From Your Contact List: The most common type is the one described above: add a list of existing contacts, and Facebook serves ads to users with matching email addresses.
  2. Custom Audience Through Recent Web Visitors: It’s Facebook’s way of describing retargeting. This type of custom audience shows ads exclusively to recent web visitors, thanks to a tracking pixel placed on the pages you want to retarget from.
  3. Custom Audience Through App Usage: Similar to retargeting, except for native mobile apps. Any recent app user can receive ads on Facebook that relate to the exact actions (event tracking) the user took within the app, thanks to having Facebook’s SDK integrated into the App.
  4. 42matters’ Custom Audience Finder: With the accuracy and granularity of data available on mobile apps unmatched thanks to mobile IDs, as well as 42matters’ audience profiling technology with over 180 million unique profiles in our database, you are able to now target users who are using specific apps.

The major benefit of the general concept is evident through these four types, with 42matters’ custom audience finder offering the most cost efficient and time saving targeting method. Each of them identifies an audience that has already expressed some type of interest in your business. Ads to these segments will inherently be more effective because you’re not starting at zero and can focus on conversions.

How to Set Up Your Custom Audiences

Of course, the core benefit of custom audiences matters little if you don’t know how to set them up. This is a major reason why, despite their advantages, many advertisers still don’t use this targeting method when advertising on Facebook.

But once you actually look into it, setting up your ads is relatively easy. Facebook has created a number of tutorials that can walk you through the process. For a list-based audience, simply follow a number of short steps:

  1. Save your contact list in .csv or .txt format
  2. Navigate to your Audiences tab in Facebook’s Ad Manager
  3. Click the Create Audience button
  4. Choose Custom Audience, then Customer List
  5. Upload your list
  6. Allow about 30 minutes for audience matching
  7. Select your new custom audience when creating an ad

For web visitor-based targeting, you will need to follow a similar process that also includes placing a Facebook pixel (a few lines of code) on your website. Building a custom audience from your app users requires registering your app and following a more complex process described on Facebook’s website.

Leveraging Lookalikes for Increased Reach

The benefits of custom audiences don’t end with the four above possibilities. In addition, the network also allows you to create lookalike audiences that can increase your reach without losing focus or relevancy.

A lookalike audience essentially increases Facebook’s freedom in finding relevant users for your brand. It takes your custom audiences, dynamically analyzes users for common data points, and expands the audience to other users on the network who also exhibit these commonalities.

A lookalike audience needs to be based off one of the first 3 custom audience groups mentioned above. Once you have created a custom audience in Facebook’s Ad Manager, take these steps to get started:

  1. Navigate to Ads Manager > Audiences > Create Audience.
  2. Select Lookalike Audience.
  3. Choose the custom audience you want to base your lookalike audience off. The custom audience you choose will have to include at least 100 Facebook users.
  4. Select the size and geographic region of your audience segment. The more defined your target, the more each user will have in common with your original custom audience.
  5. Allow for at least 1 hour to create the lookalike.

Once complete, you will be able to target ads to this audience in the same way you would with any other segment. You can easily increase your reach, without losing much of the relevance that attracted you to the targeting opportunities of custom audiences in the first place.

Custom Targeting to Maximizing Relevance

Of course, there are plenty of marketers who use all of the above and still fail to make an impact with custom audiences. These marketers tend to make a major mistake: they assume that creating the audience is the final step in the targeting process. Of course, it doesn’t have to be.

In fact, even after creating your custom audience, you still have the opportunity to optimize your targeting. Including and excluding specific demographics and locations is just as possible as it is with any other type of Facebook marketing. Based on that concept, WordStream outlines three simple strategies that can increase the ROI of this type of targeting by up to 300 percent:

  1. Eliminate Donkey Audiences: Believe it or not, a significant segment of your custom audiences will still perform below average. You can weed them out by looking at your audience insights, which tell you which segments of your custom audience are least likely to engage. Now, you can simply exclude these segments from your custom audience.
  2. Highlight the Unicorns: This is essentially the inverse of the donkey strategy. Unicorns are members of your custom audience who are most likely to engage. Focus only on these segments and adjust your ad message to maximise results.
  3. Clone Your Unicorns: Take the insights from your most engaged segments, and apply them to your entire marketing strategy. The result will lift the ROI of all of your channels, not just Facebook itself.

You can also optimize your lookalike audiences for maximum results. For example, AdEspresso ran an experiment looking to determine whether reach or relevance matters more for this segment. It found that more narrowly defined lookalikes result in a slightly lower click-through rate, but significantly decrease in cost per lead and are thus more effective.

How to Optimize App Data for Better Custom Audiences with 42matters

If all of the above seems complicated, you see why so many advertisers don’t take advantage of Facebook’s custom audience feature. But it doesn’t have to be that way.

That’s why we’re introducing an innovative custom Audience Finder tool powered by 42matters’ technology that allows you to leverage all of the feature’s benefits, while removing its most significant complications.

With our technologically-advanced tool, advertisers will have four distinct targeting options:

  1. Users of your app or set of apps
  2. Lookalike audiences for users of your app
  3. Users of your competitors’ apps
  4. Lookalike audiences for users of your competitors’ apps

The last two options are possible even if you don’t currently have a mobile app. You can target cross-device, for both desktop and mobile Facebook users.

The Benefits of 42matters’ Custom Audience Finder

Why should you try out our new tool? Here are just a few reasons to get you started:

  • Simplify custom audiences, leveraging a powerful tool more effectively for your business.
  • Save the time it would otherwise take to set up complex custom audiences.
  • Reach relevant users from the start based on their app preferences, interests, and commonalities.
  • Increase the quality of your app installs, leads, customers, and retention.
  • Scale your campaign to reach users across multiple channels and devices.

Improving your ROI is simple if the investment doesn’t increase while the return multiplies.

How Do I Get Started Maximising My Custom Audience Opportunities?

One potential step is to start digging into the native tools Facebook offers. An expert in custom audiences can use Ads Manager and Power Editor to improve opportunities, increase relevance, and maximise ROI. But that takes significant time and expertise, which many marketers simply do not have.

Instead, why not try out our new tool? Brands like Nielsen, Oracle, and Statista already rely on the data we have built in our database. Given that it is free for a limited time, you can leverage that same data for better custom audience success without increased investment. The time when simply placing an ad on social media to successfully market your brand are over. Start your free 14-day trial today!