Facebook's Latest Industry Report Highlights the Strength of Lookalike Audiences
Facebook's Insights team have released a new report into how automotive marketers can best reach prospective buyers on the platform, and while the insights provided are focused on the automotive sector specifically, they provide some interesting considerations for any brand looking to market high-end products or services relative to certain life-stages and cycles.
Facebook conducted their new study with Oracle Data Cloud, examining 64 US automotive campaigns that ran between February 2015 and March 2016. Oracle compared the performance of Facebook advertising against the leading publishers in the sector, looking at overall reach and focus, and ultimately how they resulted in the increased exposure of relevant ad content to prospective car buyers.
The comparison showed that while niche auto-buyer websites reach a higher percentage of US car buyers, they're typically not able to deliver the reach that Facebook can. Now, that probably goes without saying - Facebook, of course, has the biggest audience of any platform in the world - but combined with their other key measurements, Facebook performed well in providing both reach and relevance for automotive sellers.
But the more interesting data - at least from a general marketing perspective - came in relation to how auto-sellers have achieved best results on Facebook.
As per Oracle:
"Our top finding is that auto advertisers should use CRM data and website converters to build a high-quality seed audience and then use lookalikes to find more people like them to balance scale and quality."
As you can see from the charts, Facebook's Custom Audiences provided the highest concentration of quality audiences on Facebook, but at limited scale, while interest-based targeting provided the highest scale but with lower quality. Lookalike Audiences, meanwhile, delivered an optimal balance of the two.
Again, this makes sense - by using Lookalikes, Facebook advertisers can target users similar to those on their e-mail lists and who've already made a purchase. And logically, the profiles of prospective car buyers will be similar, in terms of related interests, income, living situations, professional affiliations, etc.
But when you think about it from that perspective, the same rings true for any major purchase - the people who buy furniture are largely going to fit similar characteristics, the same with houses, the same with whitegoods. Using Lookalike Audiences - and ideally, Lookalike Audiences segmented by product categories - can be a highly effective tactic to drive better results on Facebook, and the lessons brands can learn from such activations can provide significant insights for improving campaign performance.
Indeed, Facebook notes the effectiveness of this approach in the closing notes of their report:
"Reviewing results from an ODC-measured US automotive campaign, Jenny Reed, VP Media Director of 22squared, explained that "using the Oracle Data Cloud data, paired with Facebook and Instagram's scale, Southeast Toyota and 22squared pinpointed tactics that influenced real shopping behavior. The ability to do that at scale has now changed the way we look at both our social and tactical strategies."
It's an interesting consideration - many businesses are already aware of the potential of Lookalike Audience targeting but it can be challenging to actually develop your lists and cultivate them in a way to maximize their overall effectiveness. The data here suggests that extra effort is definitely worth it, and that brands - particularly in these higher-end product sectors - can see significant improvement in campaign performance by making increased investment in this area.
For auto-sellers, the data is definitely worth consideration, but in a wider sense, it also may be worth re-assessing how you can collect and utilize CRM and e-mail subscriber data to improve your results.
You can read the full "Fueling Your Media Strategy: Reaching Auto Buyers Online" report here.
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