Lookalike audience

What it means

A lookalike audience is an advertising audience that an ad platform builds from people similar to existing customers or website visitors. The company uploads a source list or uses tracking data, and the algorithm looks for users with similar characteristics and behaviour.

Unlike retargeting, which reaches people who have already visited the site, a lookalike audience is used to find new prospects. The platform knows the demographics, interests and behaviour of its users, so it can find people who resemble the company's best customers.

Audience size is usually set as a percentage of the population of a given country. A smaller audience is more precise and closer to the source; a larger one reaches more people but with a weaker match. The quality of the result depends mainly on the quality and size of the source data.

How it works in practice

The best source is real paying customers, ideally the most valuable ones, not all website visitors. If people who merely clicked an ad are used as the source, the algorithm will look for more clickers rather than buyers, and the cost per acquisition will rise.

Results of lookalike campaigns are compared with other targeting methods, such as interests or keywords in PPC campaigns. Platforms increasingly rely on automated targeting, so a lookalike audience is often just one of the signals given to the algorithm.

For B2B firms such as an accounting practice, the source list may contain contacts of existing clients, steering ads towards similar companies and entrepreneurs. Results are best judged by actual enquiries and signed contracts, not just clicks.

What to watch out for

Uploading customer lists is processing of personal data and a transfer of data to the ad platform. A legal basis is needed, customers must be informed in the privacy policy, and website tracking requires cookie consent. Data are usually hashed before upload.

Without good first-party data, lookalike audiences lose precision, especially as browsers and regulation restrict tracking. A company should build its own customer database with valid consents rather than rely solely on data collected by advertising platforms.