Businesses need to spend a lot on customer acquisition. Though it is a costly affair, gathering new customers is vital for your business growth. To tackle this, many marketers are going for lookalike modeling.
By creating lookalike models, you can target audiences who are similar to your existing customers. Hence, this strategy proves to be efficient and also helps in bringing down the expenditure.
So, identifying and targeting or retargeting relevant audiences forms the crux of this strategy.
Let’s understand more about lookalike modeling and how it works?
Let’s see the topics covered in this article
- What is Lookalike Modeling All About?
- Who are Lookalike Audiences?
- Why Creating Lookalike Audience Segments is Crucial?
- Lookalike Modelling Platforms
- How Does Lookalike Modeling Work?
- Benefits of Lookalike Modeling?
- AudiencePrime Lookalike Modeling
What is Lookalike Modeling All About?
Lookalike modeling is an approach where a brand extends its audience segments by adding new audiences who show similar characteristics as the original customers. By doing so, you can reach larger and relevant audiences who can turn into your potential customers. It will lead to the expansion of your customer base.
Who are Lookalike Audiences?
Customers who display traits and buying behaviours that are identical to your existing customers are lookalike audiences.
Lookalike audiences are formed and combined with seed audiences (existing customers) while targeting.
Why Creating Lookalike Audience Segments is Crucial?
Digital advertising mainly works on user data. Hence, various advertising strategies revolve around audience data and data analysis.
Similarly, audience segmentation plays a crucial role in lookalike digital marketing.
Here is the step-by-step illustration of creating lookalike audience segments:
- Choose an audience segment of existing customers who display similar characteristics. And these are called ‘seed audiences’.
- Identify other potential audiences who show similar traits as these ‘seed audiences’.
- Combine a small segment of seed audiences with potential & relevant audiences to form a segment.
- Now that lookalike audience segment is ready for targeting.
Lookalike Modeling Platforms
Wondering, how can you perform lookalike modeling? Simply, by opting for a platform which provides ‘lookalike modeling’ feature.
Ofcourse, there are many platforms which offer this feature, but AudiencePrime is a must-try!
Know why? AudiencePrime is a DIY advertising platform where you can gather your siloed data and leverage it for various ad tech strategies.
It not only has lookalike modeling features but data onboarding, audience marketplace and more!
How Does Lookalike Modeling Work?
Data plays an integral role in any online marketing strategies. Similarly, lookalike modelling works based on customer data. Hence, platforms like DMPs, DSPs & social media platforms are essential for the success of lookalike modelling.
Unlike other strategies, here you are targeting some lookalike audiences. Meaning, by deriving some insights from the existing data, you will choose some larger audience data and predict that they can be your potential customers.
However, the process is not that complex as it seems because it works with the help of algorithms. Yes, platforms which provide lookalike modelling features match data and find similar audiences by applying some machine learning algorithms.
These algorithms help in finding potential customers with similar characteristics and extending your audience segments. Now, you can reach all these audiences with targeted campaigns.
Benefits of Lookalike Modeling
Lookalike modeling is one of the unique adtech features in the industry today. It not only aids the brands in finding new audiences but also drives more customers. A business which reaches out to larger relevant audiences will have higher chances of improving conversions.
There are many benefits of lookalike modelling, such as:
Less Human Effort and More Efficient Work
Since the whole process is automated, it requires minimal human effort. Also, the creation of the model happens more systematically.
High-Quality Lookalike Audience Segments
Lookalike modelling works on ML-based algorithms which aid in maintaining accurate information.
Meaning, algorithms can trace accurate traits from extensive data sets when compared to any manually created model.
As a result, the ratio of potential customers will also be more.
Increase in Popularity of the Brand
The main idea of lookalike modelling technique is to reach new and potential customers.
When new audiences become aware of your brand/product, they tend to purchase with your brand more. Finally, leading to the popularity of your brand.
When you are targeting potential customers’ broad audience, even those who don’t know about your brand will become aware of it.
Since brand awareness is the first and crucial stage of the customer journey, your brand has more chances to extend the customer base.
Enhanced Audience Targeting
Lookalike modelling compares two different data sets – existing customers and suitable audiences from a larger database.
While doing so, the model identifies the significant and most accurate characteristics of your customer personas.
These traits are not only helpful for lookalike audience targeting but also for personalized retargeting.
Improved Audience Engagement
You can improve audience engagement because lookalike modelling provides you with accurate information about your audiences.
Therefore, you can create more relevant campaigns to engage your audiences as well as potential audiences.
Lookalike modelling is one of the unique and compelling ways to extend your customer base. Your brand needs to put constant efforts to engage and attract potential customers at every touchpoint.
And, lookalike modeling does that. It helps in bringing more visibility and improving the ROI for your brand through a completely automated process.
Hence, it is one of the most sought after ad tech features today.