Business growth is fueled by reaching new audiences and increasing your potential customer base. However, targeting new audiences, especially those beyond what you usually encounter or engage with, can be tricky and tough. So, to make ad targeting simpler for advertisers, AI-powered tools, such as look-alike modeling, have been developed.
What is Look-Alike Modeling?
Look-alike modeling is a tool that identifies people who look and act just like your target audiences. It analyzes your existing audience, identifies some characteristics (intent/ interest, geography, lifestyle, demographics, etc.), and based on these characteristics, finds users who are similar to your target audience. For example, let’s say you run an e-commerce store and you’ve identified that your best audience are people whose average purchase is over $100, buy books and stationeries and make a purchase at least twice a month; look-alike modeling would allow you to find more people like that.
Look-alike modeling helps a marketer identify a larger pool of potential customers within a small amount of time.
Why is Look-Alike Modeling Important?
Look-alike modeling can positively impact your company’s bottom line since it saves you both time and money. You are not only reaching out to a larger number of potential customers at a lower acquisition cost, but you are also saving a lot of time and effort which you would have to otherwise spend manually growing your list of target audiences. And, needless to say, a broader customer base increases your chances of getting more conversions.
Look-alike modeling is a great way to make the most of the copious amount of data available and to push your ads in front of the right audience.
How Does Look-Alike Modeling Work?
There are three steps involved in building a look-alike audience:
Step 1: Collecting Data
The first step in building a look-alike audience list is to collect relevant audience data like geography, demographics, purchase pattern, etc. Some of the common data sources are CRM systems, marketing automation platforms, second and third-party data providers, tracking pixels and web-analytics tools.
Step 2: Defining the Attributes of Your ‘Seed Audience’
Seed audience is essentially a set of your best-performing audience, which can be used to model your look-alike audience. Now, once all the required data is collected, attributes and behaviors of your ‘seed audience’ must be defined. With more attributes and behaviors defined, the chances of finding the right audience increases, thus improving the overall campaign targeting.
Step 3: Analyzing Data to Identify Your Look-Alike Audience
Finally, the data collected by defining the attributes of the seed audience’ is uploaded into a Data Management Platform. The DMP analyzes the seed audience and then applies algorithms to the collected data to find user profiles that match the seed audience; this becomes your look-alike audience!
Now, analyzing this large amount of data can be a complex process. But there are plenty of DMPs available that can do the job for you. Some of the most prominent ones available in the market right now are Salesforce Einstein,1 Lotame Audience Optimizer2 and Adobe Audience Manager.3 These DMPs help users to create a lookalike audience based on the insights of the campaign performance.
Harnessing the Power of Look-Alike Modeling
Look-alike modeling is an invaluable tool for businesses looking to expand their customer base and enhance their marketing efficiency. By leveraging AI-powered tools to identify new audiences that closely resemble your most valuable customers, you can streamline your advertising efforts and achieve significant cost savings. This approach not only broadens your reach but also improves the likelihood of higher conversion rates, ultimately boosting your company's bottom line. The process of collecting data, defining attributes, and analyzing information to create a look-alike audience ensures that your marketing campaigns are highly targeted and effective.
Partner with MarketStar to maximize your impact and achieve business goals through innovative marketing strategies and advanced data analytics. Our expertise can help you transform your marketing efforts, ensuring you reach the right audience and stay ahead in the competitive market. Let MarketStar guide you towards new opportunities and help you achieve unparalleled growth.
References:
https://www.salesforce.com/in/products/einstein/overview/
https://www.lotame.com/back-basics-look-alike-modeling/
