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The Difference Between Audience Extension And Lookalike Audience
Digital media provides marketers with a unique riddle. On the one hand, the variety of media options allows marketers to reach out to prospective clients in a variety of ways. However, the negative aspect of having such a wide range of options is that very few marketers have larger budgets that allow them to cover all of their bases by utilizing every available digital option. Audience extension and lookalike audience can help by increasing your reach while remaining cost-effective.
But what is the difference between them, what are the benefits of each, how does audience extension work, What are the cons of Lookalike Audiences, Find out by reading on.
What Is Audience Extension?
The process of extending digital audiences is known as audience extension. It aids in the conversion of a publisher's traffic into an advertiser's audience, allowing publishers to monetize their site traffic by allowing advertisers to reach their visitors not only on their website, but across the internet.
Audience extension enables marketers to focus on the quality rather than the volume of impressions by expanding the scope of their advertisements.
This boils down to:
- Enhanced uplift: Ad campaigns can be more accurately aimed at users who, according to demographics and exhibited on-site activity, match the marketer's ideal customer profile and have a higher likelihood of conversion.
- Greater coverage: Instead of regularly buying a restricted amount of space on a single publisher's website, marketers can display their ads on other websites where their most pertinent audiences are found.
- At the same time, publishers are not required to sell their inventory to generate revenue from their valuable first-party data, which means they can provide an ad-free website experience if they so desire.
Understanding the Function of Audience Extension
The effectiveness of an audience extension campaign heavily relies on two key elements: the audience information utilized for targeting and the technology (often termed as a "tech stack") employed to implement the campaign.
As the purchaser of the ad, you'll utilize a demand-side platform (DSP) to make your purchase. This will be aimed at a potential customer base determined by demographic or firmographic data (such as business size, business location, and so on).
This is where data becomes important to the campaign. It is also what drives many marketers to purchase audience extension campaigns from reputable media partners. Why? One of the main aspects of a media company's operations is daily work on the audience database. Where will you be able to rent a more detailed and higher database?
You can just inform the media company about your desired target audience, and they will craft a specific audience segment from their broader audience pool to align with your criteria. This is akin to how email marketing targets a specific group or like placing an advertisement in a magazine that's only shown to a select portion of its readership.
The media company will import that audience segment into their DSP to determine which of those people can be reached programmatically, and they will start serving your advertising to these people via the technological network that they are a part of or have established. (You won't have to think up and try out your technology solutions anymore.)
What is a Lookalike Audience?
A Lookalike Audience, also known as a seed audience, is a method of reaching out to new people who are likely to be interested in your product or service because they share characteristics with a select group of existing prospects.
Existing prospect sources include:
- Customer list
- App activity by website visitors
- Prospects gathered offline
- people who interacted with your content
How does the Advantage lookalike work?
The ad delivery system dynamically evaluates performance while using the Custom Audience that you used to create your Lookalike Audience as a guide for ad distribution. Advantage Lookalike enables us to dynamically make updates that reflect where we're seeing the better performance, and we may even expand your audience further to include similar opportunities, if the system discovers better performance opportunities outside the percentage that you selected for your Lookalike Audience.
What are the features of audience extension?
Audience extension encompasses a wide range of factors, such as gender, age, age groupings, content interests, location preferences, brand affinities, pages visited, retail transaction data, household traits, income levels, education, professional status, social media engagement, geo-demographic groupings, loyalty card preferences, and additional elements.
After determining the features, the next step is to focus on specific values. If the residential area is a criterion, for example, specific zip codes may be considered. Additionally, you have the option to utilize pre-established brand and content affinity connections supplied by research firms to target specific audiences within your existing Data Management Platforms (DMPs).
The characteristics can be ordinal or nominal, numerical or categorical, free text, or any combination of these. Once these have been determined, algorithmic techniques, "similarity search" methods, clustering techniques, and index-based techniques can be used.
The success of the preceding steps determines the quality of the resulting lookalike audience. These lookalike audiences must be computed regularly if audience behaviors change dynamically, or they will become stale. The methods and metrics used to create and evaluate lookalike audiences differ wildly between vendors and channels.
What are the drawbacks of lookalike audiences?
- Even while one might increase reach, the segment's "fidelity" suffers as a result of the requirements being lowered. You must be able to decide which characteristics are essential and which may be relaxed as a marketer. It makes no sense to modify the requirement and target the opposite gender if gender is a significant component of your target market for your goods. You would be wasting money. To see what can be done, several minor A/B trials must be run. Use the same seed source, obtain similar subsets from several suppliers, then cross-correlate to triangulate across providers.
- It may be necessary to adjust campaign metric assumptions in addition to lowering the audience requirements. Since you cannot predict in advance how consumers will respond to your advertisements, performance requirements will need to be modified. Change may be necessary for even creatives.
- When you use "lookalike audiences" across channels, these effects are amplified. Understanding the trade-off between ad efficacy and reach is important.
At the end, The audience extension, as an advertiser, enables you to broaden the reach of your campaign by displaying your ads to audiences that share traits with your target audience. This is how the functions of both audience and lookalike audiences are summarized. Using an existing Matched Audience, such as website audiences, lead form audiences, video ad audiences, company lists, or contact lists, Lookalike Audiences assist you in finding people who share traits with your target audience.
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