How to Use Facebook Custom Audience for Better Ad Targeting: A Step-by-Step Guide

How to Use Facebook Custom Audience for Better Ad Targeting_ A Step-by-Step Guide

Facebook, having 1.47 billion daily active users, is one of the biggest advertising platforms with the enormous potential audience. In fact, the number is so colossal that you need to intelligently target your advertisement to ensure it gets in front of the right eyes, at the right time. This not only helps reduce your ad spend, but also improve conversions and maximize ROI.

Source : Techcrunch

Facebook isn’t just about social interactions anymore. The dominant social environment generates extensive data, which can be mined to create unmatched targeting opportunities. However, amidst the clutter of 2.23 billion monthly active users, finding your way to the right audience is cumbersome.

One of the ideal ways to ensure that the ads reach your target audience is to make them seen by people who have already interacted with your brand in the past. This means, targeting ads to people who are a part of your contact list. Trends suggest that it is always less expensive and easier to sell to existing customers than attracting new ones. This is also true for social media marketing and Facebook advertising.

Facebook lets marketers better target their customers by providing an intuitive tool called Custom Audience. If your contact list includes old customers informations, buyers, subscribers on your website, guests, or emails gathered at an event, Facebook will compare your data with theirs to help you reach the right audience you want. Custom Audience provides some of the best targeting options, providing highly defined groups of prospects who already have a relationship with your business.

What more!

Facebook Custom Audience can also be used to build lookalike audiences such as followers, potential fans, and customers who share common characteristics with your existing fans and customers. This is extremely powerful, and very profitable for a lot of businesses, however I will get back to this later on.

What is Facebook Custom Audience?

What is Facebook Custom Audience

Custom Audiences help strengthen your existing connections and target your Facebook ads to people who are already there in your contact list. Using this powerful tool, you can seamlessly target ads to the audience you have created on Facebook, Audience network or Instagram. You can copy and paste, upload, or import your hashed contact list, and Facebook will then use the data to match the people on your list to people on Facebook.

Once you have built your Custom Audience, your data will be encrypted to protect customer relationships, and you can reach more people on this social networking platform in the most targeted manner.

Tip: Always remember to update your custom audiences as your audiences changes and grow, over time. You can create as many as you like, so try and split-test new audiences with the old ones, to see which performes better.

Types of Custom Audiences

Facebook offers a variety of custom audiences that you can build with customer data available with you, and the number is increasing every day. Discussed here are the most common types of Facebook custom audiences:

Customer List Custom Audiences:

 These include a list of phone numbers, emails, subscribers, guests, or Facebook user profiles. Your customer list tells Facebook about your existing relationships that cannot be precisely mapped via Facebook pixel or engagement.

For instance, there is a list of old customers or newsletter subscribers. These people have clearly expressed their interest in your business, but the social media giant Facebook has no way to know such prospects unless you upload the list.

When you upload the data, Facebook will use its “hashing” process to keep the customer information private, while still allowing it to identify matches with user profiles. It can typically match 60-80% of the contacts on your list depending on what kind of data you provide.

Typically you will have a higher match percentage from the US and other western countries as well as Europe compared to Asia and other third world countries.

Here, it is essential to know that you can upload data of only those customers who have allowed you to market to them. You cannot upload a purchased customer data or list that you have gathered from competitive websites. If someone unsubscribes from your emails, you have to remove them as well from your Custom Audience. Before you take the leap, read Facebook Custom Audience terms and conditions that adhere to the current rules.

Website Custom Audiences

For a more comprehensive and simple approach to create website Custom Audiences, you can integrate a Facebook Pixel tracking code on your website. This will help the social media tool to automatically match your website visitors to their Facebook user profiles. The data can be used to target all website visitors, or to smartly remarket to prospects who have visited a specific product category or the product page.

You can also set the historical time period for Custom Audience to know how far behind you want to track. You can either choose to target only the most recent web visitors or prospects who visited since last six months.

To leverage the full potential of rich data source, install Facebook Pixel on your website today for more targeted audiences. Make sure you your Facebook analytics data already.

Engagement Custom Audiences

 Engagement custom audiences allow you to target prospects that have already interacted with your brand via Facebook, Instagram or Audience Network. You can have data for the most recent interactions, or maximum up to 365 days back in the line.

The engagement custom audiences allows you to create the following engagement-based audiences:

  1. Video views (25%, 50%, 95% viewed of your videos)
  2. Lead forms (people who have completed or engaged with your lead forms)
  3. Fullscreen experience (people who have opened your collection or canvas ad)
  4. Facebook page (people who have liked or in other ways interacted with your page)
  5. Instagram business page (people who have liked or in other ways interacted with your page)
  6. Events (people who have interacted with events you have create)

Mobile App Custom Audiences

 Facebook also allows you to create audiences based on how people behave or what actions they take when they use your mobile app, either on the desktop or mobile devices. For harness this opportunity, you have to first register your app and set up the SDK on Facebook for Developers.

Next, you can build a Custom Audience of prospects that have interacted with your app in some way or the other.

Such type of Custom Audience is a great way to improve the performance of app engagement campaigns. This is because you can laser-target people who have already downloaded your app but may not be using it, people who have reached a certain level on your app, or people who made in-app purchases.

Lookalike Audiences

 When you have built your Custom Audience, Facebook may also help create a comprehensive “Lookalike Audience” to target your ads in a more in-depth and effective manner. The tool will identify characteristics, patterns and behavior that your existing audiences have in common, such as gender, age or interests. Based on the traits, they will create a huge list of similar Facebook user profiles that have most likely never interacted with your brand before.

In the next part of this article, we will discuss in details how to create these Custom Audiences through a step-by-step process, and then provide some tactics on how to leverage them at their best.

A Step-by-Step Guide to Create Facebook Custom Audiences

To begin creating Custom Audiences, first, open your Facebook Audiences tab in Adverts Manager, and click Create a Custom Audience button under Custom Audiences.

facebook business manager - custom audiences

To access custom audiences, make sure you have selected the “audiences” in the “assets” tab as shown above.

Step-by-Step Guide to Create Facebook Custom Audiences

Next, you can choose from here what type of Custom Audience is best match for your business.

How to Create “Customer List” Custom Audience

When you click on “Create” a “Custom Audience” button under “Custom Audiences” as discussed earlier, Facebook will prompt you with this:

How to Create Customer List Custom Audience

  1. Select the “Customer File” option as highlighted in the image.
  2. Choose whether you want to add customer list from your own file or import from MailChimp
  3. Accept Custom Audience terms of service by clicking on I Accept
  4.  If you have a MailChimp account, enter your login credentials as directed and follow few simple steps
  5. If you do not have a MailChimp account, create your list of either phone numbers or email addresses using your customer data. To have the highest and most relevant matches, follow Facebook’s data formatting practices
  6. Upload the list in .TXT or .CSV format. You can also copy and paste the list into the box provided. Make sure you name your audience properly to define who are included in the list. For instance, email subscribers. Then click Next

Facebook will have your Contact List Custom Audience built in about 30-60 minutes. Of course if you have a huge list or a lot of data, you’ll have to wait a little more.

How to Create Website Custom Audience with Facebook Pixel

Before you move on creating website Custom Audiences, you need to install Facebook Pixel. Follow the instructions provided in the link mentioned earlier in the article to integrate a Facebook Pixel tracking code to your website. Then follow the steps mentioned below:

How to Create Website Custom Audience

  1. Click Website Traffic as highlighted above
  2. Pick the pixel you want to use to create your audience
  3. Choose whom to target from the drop-down menu: people who had spent a certain amount of time on your website, people who have visited specific pages, or all website visitors
  4. Next, set your desired period, from 30-180 days
  5. By clicking on the Include More button, you can better define your Custom Audience. This allows you to collate data based on the particular device someone uses to visit your website or the number of times they visited your website
  6. Give a simple and relevant name to your audience, and click Create Audience Facebook Ads 

Facebook will build your Website Custom Audience in almost half an hour.

In 2016, Facebook released product upgrades that aid in in-depth targeting based on the “intensity of interest visitors display” when they are on your website. Based on how much Facebook has rolled out for your particular ad account, you can use advanced targeting to reach the most interested prospects even before you know them.

Here’s how to go about advanced website Custom Audience. Note that this section is designed only for marketers who have vast experience with Facebook’s Custom Audiences:

Custom Audience Facebook

Website Traffic >> Choose Custom Combination. To access these features, you need to turn on Advanced Mode. In this mode, you can target:

  • Frequency – How many times a person visit your website or a specific page, or performs an action.
  • Aggregate Value: It is the total amount of time a web visitor has spent on a particular page or a combination of pages.
  • Dynamic Date: Target people who have visited over a range of timeframes, and not just a set of previous dates.
  • Devices: This includes iOS, Android, desktop, and other mobile devices.

These combinations are a powerhouse of opportunities, but make sure you do not get lost amidst the crowd. To start with, keep it simple, and once you catch up the speed, you can experiment with all the combinations.

How to Create App Activity Custom Audience

Mobile has emerged as one of the most dominant platforms for effective Facebook ads today. No wonder it makes sense creating Custom Audiences based on app activity. Follow this step-by-step guide to build mobile app Custom Audience for successful targeting.

How to Create App Activity Custom Audience

  •  Click App Activity tab under the option of Create a Custom Audience
  • A page will open as Create a Custom Audience from your App
  • Provide the Name, Description, and add the mobile application from where you want to create a Custom Audience
  • Under the drop-down menu and choose one of the following:
    • Action Taken or Action Not Taken 
    • Most active users (25%, 50%, 75%, 95%)
    • Users by purchase amount
    • Users by segment
  • Choose the preferred user action/no action you want to tap to build your Custom Audience. Currently, there are 14 actions/no actions you can target, with the most popular ones being – Recently Opened Your App, Recently Completed a Purchase, Completed Large Purchases, and Achieved a Certain Level in Your Game.
  • Remember you can flex target all the custom audiences as well, which means if you click the “include more” or “exclude” button at the right, you can combine one or more filter criteria as you like. This can be matched with “any” or “all” depending on how you want to create your audience (another example is shown later in the article)

facebook custom audiences - creating new audiences

  • Once you have selected the preferred Action Taken/Action Not Taken, click Create Audience.
  • Wait until Facebook creates your Custom Audience based on app activity

How to Create Engagement Custom Audience

Facebook has recently introduced a new Custom Audience tab – Engagement on Facebook. The tool helps create Custom Audience based on how people interacted with your Facebook page or ads. Here’s how to build your Engagement Custom Audience.

1. Click Engagement on Facebook. A pop-up will come showing “What kind of engagement do you want to use to create this audience?

2. Choose the preferred engagement Custom Audience from the options available – Video, Lead Ad, Canvas, or Page

3. For video engagement Custom Audience, pick the appropriate options based how much of your video users have seen: from 3 seconds to at least 95% of the video

video engagement Custom Audience

4. For lead engagement Custom Audience, you can choose users based on whether they have just opened the lead form or have submitted it

5. Building canvas engagement Custom Audience is ideal to re-target all users who have checked out and played around your Facebook Canvas ad, but have not signed up yet. You can choose from the options like People who have opened this Canvas or People who clicked any links in this Canvas. You can create Custom Audience up to 365 days in the past.

People who clicked any links in this Canvas

6. By creating Page engagement Custom Audience, you can target people who interact with your Facebook or Instagram pages or ads. So, you can actually gain valuable insights from all those likes, shares and comments. Choose the right option under the drop-down menu Include:facebook custom audiences - creating new audiences

  • Everyone who engaged with your Page: This includes every person who visited your Page or was engaged with your Page’s content or ads at some point of time on Facebook, Instagram or Messenger.
  • Anyone who visited your Page: The Custom Audience will include anyone and everyone who visited your Page irrespective of the actions they took.
  • People who engaged with any post or ad: This option includes only the users who have engaged with any ad or post on your Page. The type of engagement includes all reactions, comments, shares, link clicks, and even carousel swipes.
  • People who clicked any Call-to-Action button: This engagement Custom Audience will include only the users who had clicked any Call-to-Action button on your Page.
  • People who sent a message to your Page: The option includes only the audience who had sent a message to your Page.
  • People who saved your Page or any post: The tab will include people who have saved your Page or any post on your Page.

Here, it is important to know that your page engagement audience has to be a minimum of 20 people to let Facebook create Engagement Custom Audience for you.

How to Create Lookalike Audience

How to Create Lookalike Audience

1. Once you have created your Custom Audiences, go back to main menu under Reach the People Who Matter to You (see the beginning of Step-by-Step Guide to Create Facebook Custom Audiences in this article)

2. Click Create a Lookalike Audience under the tab Lookalike Audience highlighted in the above image. A pop-up will emerge showing “Find new people on Facebook who are similar to your most valuable audiences

3. Pick the Source, i.e. choose a specific Page, Custom Audience or a conversion tracking pixel

4. Choose the Country that you want to target particularly

5. Set the Audience Size from 1% to 10% of the country’s total population, with 1% being those people or Facebook user profiles that most closely match the contacts from your source

6. Click Confirm button

Facebook Custom Audiences are excellent for re-engaging and leveraging people who had already interacted with your brand at some point of time. However, lookalike audiences have a massive reach, allowing you to target thousands of new users who do not know about you yet but are most likely to convert as your leads. For instance, you can build a Custom Audience with 15,000 of your existing customers, and have a Lookalike Audience of 200,000 users who are closely similar to your current audience and are ready to be targeted. So, you can image the how powerful this unique Facebook feature can be in effective targeting.

4 Tactics to Use Your Custom Audience

 Now that you have built one or more Facebook Custom Audiences implement them in action to get the best results and conversions from your ads or Page posts.

Discussed here are 4 ways you can use your Custom Audiences for successful targeting and higher ROI:

  • Reach your probable repeat customers: Existing customers who have interacted with your brand sometime or the other already trust you. So, marketing to them can deliver higher conversion rates and better ROI than trying to target new audiences who have not purchased from you before. It is way easier to persuade a satisfied customer to buy from you the second time than to acquire a new one. Use your Customer List Custom Audience to target your old & existing customers – send special offers, invite them for a second purchase, or let them know about the updated version of a product that they already use.
  • Custom Audience for Re-marketing: You can also use Custom Audience to remarket your ad or message to remind people about products they have shown interest in or have been abandoned in shopping cart etc. Resending the message or ad to them will help keep your brand on the top of their minds, encouraging them to make a purchase finally.

For instance,, Asia’s leading online shopping store for baby and kids’ products, use Custom Audiences to target ads to people who have abandoned products in the shopping cart. This strategy allowed Firstcry to increase their website conversions, with growth in Return on Ad Spend on Facebook.

  • Grow your Facebook followers: People who are already interacting with your brand would make good Facebook page followers. While some of them are already following your Page most likely, but there are many who might not be aware of your Facebook Page. Using either Customer List Custom Audience or Website Custom Audience, you can promote your Page to a highly targeted group of audiences who are already interested in you. However, make sure you exclude all people who have already liked your Page, or else you will end up paying to reach your existing Facebook followers.
  • Improve mobile app engagement: If you already have an ad in place to increase your mobile app engagement, why would you pay to target the ad to people who are yet to download the app. By using App Activity Custom Audience or Engagement Custom Audience, you can have a comprehensive list of people who have already downloaded your app. This way you can target the ad effectively, and get the best results for your budget.


Facebook Custom Audience is a powerful tool to laser-target your audience for better reach and marketing. It is only when you are able to reach the right audience with the right message and at the right time that you can increase your conversions, improve sales, and earn higher ROAS.

The above-mentioned guide will help you create unique Custom Audiences based on your needs, and types of customers. Make sure you keep the Terms of Service and guidelines in mind to know whom to target and how. Use these Custom Audiences in an intelligent manner to drive outstanding business results.

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