How to EFFECTIVELY Use Facebook Custom Audiences

Facebook Custom Audiences Cover2

Why Do You Need to Level-Up your Facebook Ad Targeting Game?

Facebook ads are powerful. It’s actually one of the most efficient digital marketing strategies especially when it comes to ad targeting. It is the most popular social network for advertising with 92% of social marketers preferring Facebook. Facebook also accounts for 9% of the total digital ad spend and 18.4% of the total global mobile advertising spend. The social network’s advertisers more than doubled in this year – within just a span of 18 months. This means that competition within the advertising network is also increasing. With this competition in mind, what can you do to make the most out of Facebook ads? The answer is simple and often overlooked: Facebook Custom Audiences.



Facebook Custom Audiences for a Customer-Centric Approach :

There are lots of advanced strategies in order to optimize ad targeting and delivery. That’s why, more often than not, social marketers overlook the potential of simple targeting techniques. Case in point, Facebook Custom Audiences actually allows you to create highly relevant and personalized ads to customers that matter than most.


Facebook Custom Audiences doesn’t just let you target people that fit into specific categories but it allows you to target “people who already know your business”. These people are customers in the making or are already your loyal customers! This type of ad targeting campaign strategy is called “Customer-Centric Campaigns.”


What are Customer-Centric Campaigns?

Customer-Centric Campaigns are proven to increase customer lifetime value. Customer lifetime value is the estimated net profit a customer can give your business over the course of your business relationship with them. There are four main factors that affect CLV:

  • The frequency of the customer’s purchase
  • The amount of each purchase
  • The projected amount that the customer will spend over the course of your business relationship
  • The projected length of your business relationship with this customer


Customer-Centric Campaigns increase CLV through these key strategies:

  • The identification of your most valuable customers and the search for similar customers (Lookalike Audiences)
  • Drive sales and retention onexisting customers by understanding customer needs
  • Create a positive brand experience and engagement through personalized customer outreach


There are more customer-centric strategies but these are the most important in ad targeting. If your Facebook ad campaign or your business, in general, isn’t adopting a customer-centric approach, then you are missing on the 60% boost in profits.


So how can Facebook Custom Audiences help you create a customer-centric approach? This is through the creation of a custom audience with the use of the data you have in hand of your existing customers. You can use four data types for the creation of custom audiences:

  1. Customer file
  2. Website traffic
  3. App activity
  4. Engagement on Facebook


But before you can create custom audiences, you need to create customer segments from customer data and upload it to Facebook.


How to Create Facebook Customer Segments :

centric approach, delivers high ROI. Customer segmentation doesn’t just involve dividing customers into groups, though. It also involves digging deeper into your customer database and analyzing customer behavior. You should be able to understand the customer behavior involved and the ROI of each segment. In order to make this easier, you can define your customer segments as follows:

  • Core and advanced. Core segments focus on the customer journey; from potential customers to lapsed customers. Advanced segments, on the other hand, give insights about the core segments. For example, advanced segments may answer if the lapsed customers were at one point actually high-value customers or if recent buyers are repeat customers or not.
  • Top down and bottom up. These customer segmentation definitions are mostly based on the method of “physical” segmentation. In top down, core segments are further broken down into smaller segments. The basis of the segments are data from insights that prove if one segment works for a certain campaign objective or not. Bottom up segments are the predefined “ideal customers” that match a certain campaign objective or a specific targeting option.


Customer Segmentation Models :

These customer segment definitions fit on these customer segmentation models:

 customer segmentation models

The core and advanced segments fit on the “Customer Lifecycle Stage” model; while the top down and advanced segments can fit on the “Customer Persona” model or the “Behaviour” and “Demographic” models. You can adjust or even create your own customer segmentation model based on your business’ needs, customer size, and customer data you have in hand.

Data Points Sources :

Speaking of customer data, where would you get the customer data you can use in segmentation? And what data points should you use? There are four data points that you most probably have access to:

  1. Type of product purchased. This data point is available in your transaction history and can give you insights on any upsell and cross-sell opportunities.
  2. The value of thepurchase. You can segment customers based on the value of their purchase. You can create high-value, mid value, and low-value segments.
  3. The date of purchase. This will give you insights on product demand and seasonality and purchase frequency.
  4. Newsletter segments. This may include advanced segments like responsive subscribers, recent subscribers, and non-responsive subscribers.

Creating the Customer Segments

The creation of customer segments can sometimes require further market research; especially for data that aren’t at your disposal. For this article, we will create thecore and advanced segments (seven in total).

Core Segments:

Potential Customers :

This segment is usually pulled from newsletter subscribers. As earlier stated in the newsletter segment data point, you can use segments like email respondents, recent subscribers, and non-responsive subscribers.

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For these people to actually subscribe to your mailing list, there’s a great chance that they are interested in your business or product. They wanted to know more or be updated on any new information or offers. But not all of them are interested enough to open all these newsletters. According to an e-commerce industry benchmark, only about 16.75% of promotional emails are opened.


There’s a lot of lost acquisition opportunities when it comes to email marketing. But if you take advantage of this customer segment, and use it for a Facebook Custom Audience, there’s agreat probability that you can achieve higher ROI. You can use all three newsletter segments to achieve this.


One-time Customers

These are customers with only one purchase transaction with your business. You’ll want to retain these customers so that they’ll continue making purchases. Filter your purchase history to a certain length of time (180 days or a year depending on the number of customers you want to include). Include all customers that made only one purchase within that time span. You can pull the data for this segment from the “date of purchase”.



Repeat Customers

The customers who fall under this segment purchased something from your business more than once. The data for this can also be pulled from the “date of purchase”. Just filter the purchase history to find customers that made consecutive purchases or made more than one purchase in a span of a month or two (or even six months). You can also use the “type of product” data point to decide what relevant products to offer to them for upselling and cross-selling purposes. You can use this segment for retention drive campaigns.



Lapsed Customers

Six months or a year is the perfect length of time to determine if a buying customer had lapsed. They differ from first-time or even one-time customers in a way that they’ve have specific purchasing patterns but then they suddenly stopped purchasing from you altogether. You failed to retain these customers in a way so you need to reactivate those using retargeting campaigns. You can filter the “date of purchase” and the non-responsive subscribers sub-segment in the newsletter segments.

Advanced Segments:

First-time Customers

The recency of first-time customers can be filtered to the past month or so. The main objective is still retention. You don’t need to wait for these customers to lapse. You should immediately turn them into repeat customers.


Recent Customers

Recent customers are either one-time customers that made repeat purchases or repeat customers that continued their patronage to your business. The data should only include purchases from within a month or so. This advanced segment can be used for the objective of retention and the increase of CLV.

High-Value Customers

This segment includes both repeat and lapsed customers. You can filter by the “value of purchase”, and “date of purchase” data points. These customers should be in the top 20% of high spenders in your business. They either purchased a lot of products or purchased the most expensive ones. They can also be both. You’ll want to retain or reactivate them.

You can use these segments, later on, to create Facebook Custom Audiences for customer-centric ad campaigns. Note though that these segments can be used with different campaign objectives.

How to Create Facebook Custom Audiences ?

After you are done with customer segmentation, it’s time to create Facebook Custom Audiences. Keep in mind though that Facebook offers audience insights for the minimum size of 1,000 audiences. This can compromise user data, so you need to keep your segments below the minimum if possible.

But back to the custom audiences creation, head to “Audiences” in your Facebook Ads Manager. Under “Create Audiences”, select “Custom Audience”

facebook audiences
facebook audiences


A dialog box will then appear, prompting you to select from the four data sources:

Facebook Custom Audiences Data Sources
Facebook Custom Audiences Data Sources


The data from the segments you have just created would fall under “Customer File”. You can either upload a CSV file,paste the data of your customer list or leads, or import email addresses from MailChimp. But take note of the data type and data formats. You can also include calculations for CLV in your data upload.

facebook audience upload data
facebook audience upload data

And then you’re done!


Before you start creating customer-centric campaigns, make sure to head to “Audience Insights” to learn more about the users in your segment. Facebook will match your upload customer data with their users. Match rates are said to be more than 60%. After that, you can use your custom audience for ad targeting.


To sum up,

Facebook is said to deliver an average of 89% ad targeting accuracy. This is in comparison to other online advertising networks with just an average of 38%. With this data alone, there’s no excuse for not making the most out of Facebook’s targeting options. Facebook Custom Audiences alone offers a lot of options to expand and personalize an ad campaign. What are the tips or hack you are using in order to make the most of the Facebook Custom audiences ?


Mustapha Ajermou
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