Do you think Facebook knows your customers better than you?
By: Kate Tyshchenko
Tags: Advertising, Marketing, Data Science, Digital Marketing, Facebook

Knowing your customers is vital for your business’ very existence. Since, I am a bit of a data junkie, overtime I collected a lot of data on my users. In fact, I was confident I knew my customers better than anyone else. I knew what they do for living, whether they have kids, their marital status and where they order their pizza from.

So manually building customs audiences to target on Facebook seemed like a no-brainer. Wrong!

If knowing your customer is mantra #1 in a book of entrepreneurship, mantra #2 would be A/B testing everything. Even if you think you know something and you are confident in that information — A/B test it anyways. You might and probably will be surprised.

In general, I believe that A/B testing is a good mind-set to adopt even for early stages startups as well as for larger companies no matter what type of business, B2B or B2C, you are in because it will undoubtedly save you time and money.

Even though I thought I knew exactly who my “perfect customer” is I wanted to check if Facebook might do better job on creating an ideal target audience for me.

For those of you who aren’t as familiar with it — Facebook has a tool called Pixel, which is a snippet of code that you place on your website. It collects data on interactions & conversions from Facebook ads. It works by placing cookies and tracking users as they interact with your website and ads. Basically, more people interact (click, like, add stuff into a cart etc.) and convert — more Pixel learns about type of people and their behaviors, who are interested in your business. What do they do? How old they are? What devices they use? What is their education level? What do they like?

Thus, my question was — who knows my “ideal customer” best — me or the Facebook Pixel.

I set up a campaign with 2 sets of ads, both optimized for conversions (if you are interested what that means — here is a good article). One targeted my laser-focus understanding of an ideal customer. It was pretty specific and had things like sex, age, education level, if they had kids, their interests, marital status, travelling patters and other. It pretty much accumulated all the knowledge I had gained about my customers at the time.

Example of Facebook ad targeting options

The second one was created using so called Facebook Lookalike Audiences. These are people who are similar to those who have already converted in the past. All I had to do is to give Facebook a list of my current clients as a starting point for the new Lookalike audience. Facebook then generated an audience similar to the original one, which was not limited by my educated guess of “my ideal customer”. It was much broader.

I run the ads for 10 days, but it quite obvious from the beginning that Pixels targeting was going to out-perform my manual efforts. It did 10% better in terms of clicks and impressive 43% in terms of conversions. Conversion cost was also much better.

The entire Pixel experience also makes advertising on Facebook much faster and easier. Instead of manually guessing my customer demographics and A/B testing every piece of the puzzle it adds a layer of preciseness to my advertising campaigns. Pixel knows exactly who are those people who already converted and finds me more people who are most likely to convert next. This means that I can reach my ideal prospects faster than ever and at least in my case gives me the highest ROI.

Pixel is a brilliant tool which FB put a lot of work into. And in my opinion, this is the most powerful digital marketing tool on the market right now.

This story is published in The Startup, Medium’s largest entrepreneurship publication followed by +442,678 people.

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