Lookalike Audiences And Budgeting For Facebook Ads And Google Ads

Reaching the right audience is essential for maximising advertising effectiveness. Lookalike audiences for Facebook Ads and Google Ads help businesses connect with new customers who share similarities with their existing audience, increasing the chances of engagement and conversions.

By leveraging data-driven targeting, SMEs can refine their marketing efforts, ensuring their budget is spent on high-potential prospects. This guide explores how to set up and optimise lookalike audiences across different platforms, allocate budgets effectively, and avoid common pitfalls to achieve better digital marketing results.

Key Takeaways

• Understanding how different platforms implement lookalike audience targeting allows businesses to refine their digital marketing strategies, with Facebook offering more control over audience size while Google relies on AI-driven optimisation for broader reach.
• Effective budget allocation is key to maximising ROI, requiring a balance between prospecting and retargeting while minimising audience overlap to avoid inefficiencies in ad spend.
• Singapore SMEs can leverage government grants such as the PSG and EDG to subsidise digital marketing costs, making it more affordable to implement data-driven strategies and scale advertising efforts efficiently.

Lookalike Audiences Across Different Platforms

Image Credit: Ortto

Lookalike audience targeting is widely used across multiple advertising platforms, but the way each platform builds and applies these audiences varies significantly. Understanding these differences can help businesses optimise their ad spend and choose the most effective channels for their marketing goals.

Definition of Lookalike Audiences and How They Work

Lookalike audiences are a powerful digital marketing tool that enables businesses to expand their reach by targeting new potential customers who share similar characteristics with their existing target audience. These audiences are generated using algorithms that analyse existing customer data—such as demographics, interests, and online behaviour—to identify users with comparable traits.

By leveraging lookalike audiences, businesses can improve the efficiency of their advertising campaigns, reaching individuals who are more likely to engage with their brand.

Facebook Lookalike Audiences

Facebook’s Lookalike Audiences are one of the most well-known and widely used forms of audience expansion. This feature allows advertisers to create lookalike audiences based on various data sources, including:

• Customer lists (e.g., email subscribers or previous purchasers)
• Website visitors (via the Facebook Pixel)
• Engagement with Facebook and Instagram content (e.g., likes, shares, video views)

Facebook’s algorithm then analyses these data points and identifies users with similar attributes, interests, and online behaviours. Advertisers can refine the audience size, choosing from 1% (most similar) to 10% (broader but less precise) of the selected location’s population.

This enables brands to reach new, high-potential customers while maintaining relevance. Recent research shows that businesses using lookalike audiences for Facebook ads see up to 70% higher conversion rates compared to broad targeting, making them an essential tool for businesses aiming to reach high-intent customers efficiently.

Google Similar Audiences (Now Optimised Targeting and Audience Expansion)

Google previously offered Similar Audiences, which functioned similarly to Facebook’s Lookalike Audiences. However, in 2023, Google phased out Similar Audiences in favour of Optimised Targeting and Audience Expansion to provide more flexible and automated audience growth options.

Key Differences from Facebook:

• Google’s Optimised Targeting automatically finds additional users likely to convert, even if they do not precisely match an existing audience list.
• Audience Expansion applies to Display, Search, and YouTube ads, broadening reach by identifying users with similar behaviours to the original audience but allowing Google’s AI to determine the best targeting parameters.
• Unlike Facebook’s fixed percentage-based approach, Google relies on real-time machine learning to refine audience targeting dynamically.

These changes mean Google’s audience expansion capabilities are now more automated, giving advertisers less direct control over the audience-building process but potentially increasing efficiency and reach.

Other Platforms (LinkedIn, TikTok, etc.)

For small and medium-sized enterprises (SMEs) looking to explore multi-channel advertising, understanding how different platforms apply lookalike targeting is crucial.

• LinkedIn: Uses Matched Audiences, allowing advertisers to create Lookalike Audiences based on contact lists, website visitors, and engagement data. LinkedIn’s approach is particularly effective for B2B marketing, as it focuses on professional attributes such as job titles, industries, and company size.
• TikTok: Offers Lookalike Audiences that function similarly to Facebook’s, enabling advertisers to find users with comparable behaviours and interests. TikTok’s algorithm prioritises engagement signals such as video views and interactions to enhance targeting.
• Other platforms (e.g., Twitter, Snapchat, Pinterest) also provide variations of lookalike targeting, though each has unique data processing methods based on user interactions.

Key Differences Across Platforms

Platform	How Lookalike Audiences Work	Best Use Case
Facebook	Matches users based on engagement, customer lists, and website visitors	General consumer targeting with refined control
Google (Optimised Targeting and Audience Expansion)	Uses AI to expand audiences dynamically across Search, Display and YouTube	Automated, conversion-focused audience expansion
LinkedIn	Matches professional attributes for B2B targeting	Ideal for businesses targeting professionals and decision-makers
TikTok	Uses engagement and interest-based matching	Best for consumer-focused brands seeking younger audiences

For SMEs, selecting the right platform depends on business goals, audience demographics, and advertising objectives. Facebook and TikTok suit B2C engagement, while LinkedIn is more effective for B2B marketing. Google’s AI-driven targeting is beneficial for high-intent searchers and automated audience discovery. By understanding these differences, businesses can optimise their multi-channel advertising strategies to maximise impact.

Step-by-Step Guide to Setting Up Lookalike Audiences

Image Credit: Ortto

Lookalike audiences are a highly effective way to expand your reach by targeting new users who share similarities with your existing customers. However, setting them up correctly is crucial to achieving optimal results. Here’s a step-by-step breakdown of how to create Lookalike Audiences on Facebook and Google, along with common mistakes to avoid.

Facebook Lookalike Audiences Setup

Facebook Lookalike Audiences allow advertisers to find new potential customers by analysing an existing audience and identifying users with similar characteristics. Here’s how to set them up effectively:

1. Choosing a High-Quality Source Audience

The success of a Lookalike Audience depends on the quality of the source audience (also called a “seed audience”). Facebook requires a minimum of 100 people from a single country to create a Lookalike Audience, but for better accuracy, a source audience of 1,000 – 50,000 users is recommended.

Common high-quality source audiences include:

• Customer lists – A database of past buyers (e.g., email subscribers, loyalty programme members).
• Website visitors – Users tracked via the Meta Pixel, particularly those who completed valuable actions (e.g., purchases, sign-ups).
• Engaged users – People who interacted with your Facebook or Instagram page, watched videos, or responded to ads.

For the best results, choose an audience with high engagement and strong conversion history rather than all visitors or followers.

2. Accessing the Lookalike Audience Tool in Facebook Ads Manager

1. Go to Facebook Ads Manager and navigate to the Audiences section.
2. Click Create Audience → Lookalike Audience.
3. Select your source audience (e.g., a Custom Audience from customer data, website traffic, or app activity).

3. Selecting Audience Size and Geographic Targeting

Facebook allows you to define Lookalike Audience size, ranging from 1% (most similar) to 10% (broader reach):

• 1%-3% Lookalike: More precise targeting, better engagement and conversion.
• 4%-6% Lookalike: Balanced approach, offering both relevance and reach.
• 7%-10% Lookalike: Broad reach but may include less relevant users.

After selecting the size, specify the geographic location where you want to find similar users. This is essential for businesses targeting specific regions or countries.

4. Refining and Testing Different Audience Sizes

• Test multiple audience sizes (e.g., 1%, 3%, and 5%) to determine which delivers the best results.
• Combine Lookalike Audiences with interest-based or behavioural targeting to improve relevance.
• Exclude existing customers to prevent wasted ad spend on people who have already converted.

Google’s Audience Expansion and Optimised Targeting Setup

Image Credit: Store Growers

Google’s equivalent to Lookalike Audiences includes Optimised Targeting and Audience Expansion, which help advertisers find new customers beyond their selected audience.

1. Using First-Party Data to Build a Seed Audience

Before enabling audience expansion, it’s essential to have a strong foundation using first-party data such as:

• Customer Match – Upload email lists to match users on Google platforms.
• Website visitors – Use Google Ads Remarketing Lists (set up via Google Tag Manager or Google Ads Pixel).

A high-quality seed audience improves Google’s ability to identify relevant users.

2. Enabling Audience Expansion in Google Ads

To activate audience expansion in Google Ads:

1. Go to Google Ads and select an existing campaign or create a new one.
2. In the Audience section, select your remarketing lists or customer lists.
3. Toggle Optimised Targeting (for Display/YouTube) or Audience Expansion (for Search).

Google will then automatically expand targeting to users with similar characteristics, increasing reach without manual intervention.

3. Choosing the Right Campaign Types

Lookalike-style targeting on Google works best for specific campaign types:

• Search Ads – Expands keyword-based targeting to reach users with similar search intent.
• Display Ads – Uses browsing behaviour and interests to find similar users.
• YouTube Ads – Targets users who watch similar content to your seed audience.

4. Analysing Performance and Optimising

• Monitor impressions, click-through rates (CTR), and conversion rates to evaluate audience expansion performance.
• Adjust bid strategies based on performance insights (e.g., lowering bids if CPA is too high).
• Regularly update first-party data lists to maintain audience relevance.

Common Mistakes to Avoid in Lookalike Audiences

Despite their effectiveness, Lookalike Audiences can underperform if not set up correctly. Avoid these common mistakes:

1. Using a Seed Audience That Is Too Broad or Too Narrow

• Too broad: If the source audience includes all website visitors, it may dilute the effectiveness of Lookalike Audiences.
• Too narrow: A small or overly specific source audience (e.g., only 100 users) may not provide enough data for Facebook or Google to find accurate matches.
• Solution: Use a balanced audience size (1,000 – 50,000 users) with clear intent signals (e.g., high-value customers or frequent buyers).

2. Not Updating Audience Lists Regularly

• Lookalike Audiences don’t update automatically unless linked to dynamic sources like the Meta Pixel or Google Ads remarketing lists.
• Stale data can lead to irrelevant targeting and wasted ad spend.
• Solution: Refresh customer lists regularly (e.g., monthly) and use dynamic audience updates where possible.

3. Ignoring Performance Metrics and Not Adjusting Strategy

• Simply enabling Lookalike Audiences or audience expansion doesn’t guarantee results.
• Regular monitoring and adjustments are needed to refine performance.
• Solution: Analyse metrics like cost per acquisition (CPA), conversion rate, and return on ad spend (ROAS) to determine which audience sizes work best.

Setting up Lookalike Audiences on Facebook and Google is a highly effective strategy for expanding reach while maintaining relevance. By choosing a high-quality source audience, refining targeting settings, and continuously optimising based on performance data, businesses can improve ad efficiency and drive better results.

Avoiding common pitfalls—such as using outdated audience lists or neglecting performance monitoring—will further enhance campaign success.

Budgeting Tips for Singapore SMEs

Image Credit: DollarSprout

For SMEs in Singapore, digital advertising can be a cost-effective way to reach new customers. However, managing Facebook and Google Ad campaign budgets wisely is crucial to maximising return on investment (ROI). This guide provides practical budgeting tips, covering allocation strategies, platform cost considerations, scaling techniques, and government support for digital marketing.

How to Allocate Budget Effectively

When allocating budget, it’s important to balance prospecting and retargeting efforts while minimising audience overlap. If too much budget is spent on multiple Lookalike Audiences that share similar characteristics, you may end up targeting the same users repeatedly, reducing ad efficiency and increasing costs. Here’s how how you can balance prospecting and retargeting:

• Prospecting (Lookalike Audiences): Typically, 40-60% of your ad budget should be allocated here to reach new potential customers who resemble your existing audience.
• Retargeting: The remaining 40-60% should be reserved for re-engaging users who have visited your website, engaged with your social media platform accounts, or interacted with previous ads.

Testing Different Lookalike Audience Sizes with Small Budgets

For SMEs working with limited budgets, it’s important to test various Lookalike Audience sizes to find the optimal balance between reach and conversion:

• Start with a 1%-2% Lookalike Audience (most similar users) for better targeting and higher engagement rates.
• Test broader Lookalike Audiences (3%-5%) to increase reach and compare cost per conversion.
• Run small test campaigns ($10–$20 per day per audience) before scaling up to avoid overspending on ineffective audiences.

Cost Considerations for Facebook Ads vs Google Ads

Facebook and Google Ads each have unique cost structures, and the choice of platform depends on business objectives and industry type. For SMEs, social media marketing on platforms like Facebook and Instagram often provides a lower cost-per-click (CPC) compared to Google Search Ads, making it an attractive option for brand awareness and customer engagement.

Average CPC and CPA in the Singapore Market

• Facebook Ads: The average cost-per-click (CPC) in Singapore ranges from SGD 0.50 – 1.50, while the cost-per-acquisition (CPA) varies depending on industry and campaign quality.
• Google Ads: The CPC on Google Search typically falls between SGD 1.00 – 4.00, but the CPA can be higher, especially in competitive industries like finance or legal services.

Which Platform is More Cost-Effective for Different Industries?

Industry	Recommended Platform	Reason
E-commerce	Facebook Ads or Instagram Ads	Lower CPC, visually engaging formats
B2B Services	Google Search and LinkedIn Ads	Higher intent from search queries
Retail and F&B	Facebook and Google Display	Cost-effective for promotions
Education	Google Search and YouTube Ads	Stronger search intent and video engagement
Finance and Legal	Google Search Ads	Higher conversion rate despite higher CPC

For SMEs, Facebook advertising costs are generally more affordable for brand awareness, while Google Ads provide better results for high-intent searches. Testing both platforms with a modest budget can help determine which works best for specific business goals.

Scaling Ads Without Wasting Budget

Once a campaign is delivering positive results, scaling up strategically can maximise returns without unnecessary spending.

Using A/B Testing to Optimise Ad Creatives and Audience Segments

• Test different ad creatives (images, videos, copy) simultaneously to identify the highest-performing version.
• Compare multiple audience segments, including different Lookalike Audience percentages and interest-based groups.
• Monitor key performance metrics (CPC, CTR, ROAS) and allocate more Facebook or Google Ads budget to high-performing ads.

With 70% of marketers reporting that A/B testing is essential for improving conversion rates, businesses should continuously test different ad creatives and audience segments to refine their strategy.

Adjusting Bid Strategies for Maximum ROI

• Use automated bidding (e.g., Facebook’s Lowest Cost or Google’s Target CPA) to optimise spending.
• Gradually increase ad spend (10-20% per week) instead of sudden jumps, which can disrupt performance.
• Monitor frequency rates (for Facebook Ads) to prevent ad fatigue, ensuring that audiences don’t see the same ads too often.

Government Grants and Support for Digital Marketing in Singapore

Singapore SMEs can leverage various government grants to subsidise digital marketing efforts. These grants help businesses offset costs related to advertising, content creation, and overall digital transformation.

Available Grants for SMEs

• Productivity Solutions Grant (PSG)
  • Covers up to 50% of costs for pre-approved digital solutions, including digital marketing software and tools.
  • Suitable for SMEs looking to implement CRM, social media management, and analytics platforms.
• Enterprise Development Grant (EDG)
  • Supports up to 50% funding for strategic brand and marketing development.
  • Ideal for businesses investing in long-term digital marketing strategies and consultancy services.

How to Leverage Government Support for Advertising

• Apply for PSG to subsidise marketing automation tools (e.g., email marketing platforms, social media marketing and management).
• Use EDG for brand development projects, such as website revamps, paid advertising strategies, or marketing consultancy.
• Work with pre-approved vendors listed under the grants to ensure eligibility and smooth approval processes.

For Singapore SMEs, careful budget allocation is essential to maximising advertising impact. By balancing prospecting and retargeting spend, choosing the right platform based on industry needs, and optimising ad performance through testing, businesses can achieve better ROI. Additionally, leveraging government grants can significantly reduce digital marketing costs, allowing SMEs to compete effectively in an increasingly digital landscape.

Need Help in Setting Up and Managing Lookalike Audiences?

Image Credit: SalesForce

Lookalike audiences for Facebook Ads and Google Ads offer a powerful way for SMEs to expand their reach and improve ad performance. By carefully selecting a high-quality seed audience, optimising audience size, and balancing budget allocation, businesses can maximise ROI while minimising wasted spend.

Testing different audience segments and leveraging government grants can further enhance digital marketing success. However, setting up and managing lookalike audiences effectively requires expertise. MediaOne’s team of digital marketing professionals can help you refine your strategy, optimise campaigns, and achieve better results. Call us today to boost your advertising performance with expert guidance.

Frequently Asked Questions

How long does it take for a Lookalike Audience to start delivering results?

Lookalike Audiences typically take a few days to optimise as the platform’s algorithm gathers data and refines targeting. Performance can improve over time, especially if combined with A/B testing and manual adjustments.

Can I create Lookalike Audiences without a large customer list?

Yes, you can use other high-quality seed audiences, such as website visitors (tracked via the Meta Pixel or Google Ads remarketing lists) or users who have engaged with your social media content.

How often should I refresh my Lookalike Audiences?

It’s recommended to refresh Lookalike Audiences every one to three months by updating the seed audience with recent customer data to ensure targeting remains relevant and effective.

What industries benefit most from Lookalike Audiences?

E-commerce, retail, and B2C service industries tend to see strong results, as Lookalike Audiences help reach new customers with similar purchasing behaviour. B2B businesses may find better success on LinkedIn or through Google’s Optimised Targeting.

Can Lookalike Audiences be used for lead generation campaigns?

Yes, Lookalike Audiences work well for lead generation, especially when paired with high-converting landing pages and compelling offers. Testing different audience sizes and ad creatives can help improve lead quality and reduce cost per lead.