• by Dan Morris , November 13, 2013

Facebook is starting to get advertising right -- or at least Wall Street thinks so. Facebook is now focusing on offering advertising solutions for performance marketers, and is making sweeping changes to its campaign creation workflow, creative tools, mobile advertising capabilities, and targeting options.

Of all the major changes Facebook has made, none is more important than the introduction of Custom Audiences targeting. Custom Audiences provide marketers with a simple solution for targeting audience segments based on their own first-party customer data. By using Custom Audiences, online marketers can target Facebook users based on their purchase history or stage in the conversion funnel -- and then serve target segments with uniquely tailored creatives.

Sounds a bit like FBX retargeting, doesn’t it? It’s similar, but with one key difference: Custom Audiences allow marketers to leverage first-party data from their own CRM and customer databases, rather than relying on a third-party such as a DMP to create target audience segments for them.

Custom Audiences enable marketers to target audiences based on their own parameters. Marketers can create tightly knit audience segments like “Shopping Cart Abandoners,” “First Time Customers,” or “Repeat Customers” using data from their own databases, obtaining similar results to a retargeting campaign run through FBX. But they get the added benefits of knowing the size, characteristics, bid price, and CPC for each audience segment. 

Advertisers that want to experiment with Custom Audiences can use a few strategies to get started:

1.   Ensure your customer data contains the necessary fields. Facebook matches users to your customer audience lists based on a unique email address, phone number, or Facebook ID that you provide. Make sure one of these fields is present in your customer lists.

2.    Organize your audience segments by value. Perform an analysis of your customer database to determine appropriate “buckets” of customer segments you want to use to create Custom Audiences. Use purchase history, stage in the conversion funnel, average order value, and lifetime value criteria to inform your segmentation decisions.

3.    Upload customer data into Facebook to create Custom Audiences. Customer data can be uploaded in CSV or Plain Text with one entry per line. Facebook will then attempt to match your list across its database to find the appropriate users. On average, advertisers find the match rates of customer data to Facebook users to be about 50-70%. Once Facebook has run its match query, your audiences will appear as a broad category.

4.    Use a leading Facebook ads management platform to quickly deploy new campaigns. Use a bulk campaign-creation wizard to target multiple audiences at scale, but make sure to create just one custom audience target per campaign.

5.    Leverage a Data Management Platform (DMP) to provide audience segments. Make sure your ad management platform works with one or more DMPs that provide target audience segments. Combined Facebook Custom Audiences based on your own first-party data are highly effective, but combining Facebook audiences with third-party audience data can deliver even more reach and targeting precision.

Adoption of Facebook Custom Audiences is growing quickly, and for good reason. It also provides marketers with an effective way to retarget users on Facebook, with greater flexibility, transparency, and control than FBX retargeting. As Facebook continues to broaden its ad offerings, advertisers should expect more and more first-party customer targeting options to emerge. Get started now to stay one step ahead of the competition.