2017-04-09T08:47:05+00:00 April 13th, 2017/Facebook/By /

Facebook: Intro to the Facebook Pixel and Lookalike Audiences for Affiliate Marketers

Facebook has been one of my go to traffic source for the past 10 years.

Yes they can be frustrating sometimes – I have Post-traumatic stress disorder from seeing so many red boxes.

But I keep coming back like a crack addict because they keep releasing new amazing features.

I remember the gold rush when the mobile newsfeed first came out, and I remember taking advantage of video ads when affiliates were being lazy.

But one of the features that sets Facebook apart from everyone else has been their pixel.

I know it can be scary if you’re not a technical person, but realize that the Facebook Pixel is just a piece of HTML code.

People talk about it like it’s The Enigma, but it’s super simple.

You just copy & paste the code it into your landing pages.

What IS complicated is the technology behind it.

The funny thing about Facebook is the more new features they bring out, the less I have to do as a marketer.

The algorithm behind the pixel is so advanced that it’s not even worth me trying to compete against it. They deploy machine learning and it’s efficient.

I wanna introduce you to how the pixel works, and how you can use it to your advantage.

How Does The Facebook Pixel Work?

pixel

There’s a problem with most traffic sources…their targeting sucks.

Most traffic sources will let you target a combination of SITE ID, country, and maybe devices. That’s about it.

And Facebook has been dominating for several years because they have information on demographics, behavior, and interest.

But imagine if you could target people you don’t have information on, but are likely to buy.

This is exactly what the pixel does.

I don’t wanna make this like a lecture or something, so I’m going to use an example to show you how the pixel works.

Imagine this scenario:

Let’s say your campaign is already up and running on Facebook and you want more conversions.

There are only two steps to get it set up:

#1 Set up a Facebook pixel in the Ad Manager.

The Facebook pixel available inside your ad account will look something like this:

facebookpixel

The blurred out numbers are the unique identifiers for my specific pixel. Sorry, you can’t have those 🙂

This code is just the “base code”.

#2 Add your “Event Code”

The event is the actual action you want to record people doing.

Let’s say you’ve got a Shopify store and you want to build an audience of people who have purchased products from you.

You would copy and paste the “Make purchase” event code onto the page your buyer sees once they have made a purchase.

These are the 9 events you can place on your page that will record data.

Screen Shot 2017 03 08 at 4.40.34 PM

If someone clicks through to see your website, you would have the “View content” event code on all of your content pages.

Then if they add a product to their cart, it would trigger the event code “Add to cart” that you put on your shopping cart page.

You can probably start to see what’s happening…

In the background, Facebook is building up a list of actions that every single user is doing on your website.

They are doing market research and analysis for you.

This is a marketer’s dream.

You don’t have to guess about your audience anymore. Facebook does it all for you.

Once you’ve placed event codes in all the places you want to capture data from, you’re done.

Guys, don’t freak out about the actual “how to install the pixel” part.

These instructions on Facebook show you step-by-step how to do it.

It’s super simple, it’s just copy & paste.

If you have trouble installing it, here’s the pixel troubleshooting section from Facebook.

My job is to show you how to make money from it, not how to install it.

Once you’ve installed the pixel, you launch your campaign.

Let’s say you run a campaign and get this data:

  • 50,000 people see your Facebook ad
  • 1,000 people click your ad and land on your ecom store
  • 40 people make a purchase on your store
  • 10 of those people make multiple purchases

Now you can do 2 things with the Facebook pixel:

  1. Retarget your ads to any combination of those groups of people, or
  2. Make up a new audience of people who are just like the ones who purchased

I’m gonna write a post on retargeting later, but point #2 is more interesting to me.

This is a huge breakthrough for marketers.

It’s like saying to Facebook “Just gimme the hottest of the hot leads, I want people who are EXACTLY like the ones who purchased”.

When you set the pixel up to do this, it’s creating an audience for you that looks just like the people who purchased. It’s called a “Lookalike Audience”.

You normally need about 1,000 hits on your event code to help the pixel gather significant data. You hear marketers talking about “building their pixel” – this is what they’re talking about.

Pro tip: Let’s say you run a campaign in the United Kingdom and get some data. You can make a lookalike audience in ANY other country in the world from that same data.

How The Facebook Pixel and Lookalike Audiences Work

facebook pixel and lookalike audiences
Let’s say you run your campaign and the pixel gathers data from 1,000 people.

Well, Facebook can analyze the 1,000 people and find things they have in common. Then they can find millions more just like them.

Facebook will take the data from the Pixel and match it with at least the top four interests and behaviors that those purchasers have in common.

Here’s an example of how it will do that.

Let’s say that you’re promoting a Yoga store.

The pixel might find that most people who clicked on your ad had these interests:

  • Meditation
  • Green Tea
  • Vegetarian
  • Austin, TX

(I just made that data up)

You would never have known to target that combination of interests. But Facebook knows the truth.

Now you can advertise to the audience of people that Facebook provides who are interested in all of those things.

But Facebook is not stupid and they’re not gonna give you e-mail addresses or names of individual Facebook users. (Because marketers ruin everything)

Each Facebook user has a unique User ID, like a customized URL.

That’s what they’re using on the backend for tracking and for making those Facebook pixel Lookalike Audiences. You won’t actually get the User ID but the User ID’s will be aggregated in your Ads Manager.

When you create an ad with Lookalike Audiences, you’re creating a hybrid audience with combinations of things you could never come up with in your head.

“You have zero chance of knowing that 99% of people who purchased your flashlights like country music, but Facebook knows that.”

This is what I mean when I tell you guys how advanced Facebook is.

But interest targeting is only one layer of the Facebook cake.

How Does Facebook Know So Much About People?

73568500 180336946

“If you’re not paying for it, then you’re the product.”

Facebook has three main categories for targeting:

  1. Interests
  2. Demographics
  3. Behaviors

I’ll explain each one in detail.

Interests and Demographics

Most of the Interests and Demographics are reported directly to Facebook by the Facebook User.

This “reporting” comes in the form of filling out a personal profile or by clicking on stuff when they’re on Facebook.

Remember that guys… Every link you click, or post you like goes into a database with your name on it somewhere at FB HQ :/

A Facebook User doesn’t see himself as “reporting” data but he’s reporting the fact that he lives in Topeka, Kansas, which is then getting recorded in Demographics.

Since he doesn’t think he’s reporting he has no reason to enter false information. So, what he’s reporting is probably accurate and true. And what he’s clicking on is something he’s genuinely interested in.

Every single page like, comment etc. is building a profile for yourself on your personal Facebook page.

Multiply those actions by 1.7 billion monthly active users and you can see that Facebook is the ultimate targeting machine.

interests facebook data

In this example of interests we can see that 20MM people have an interest in real estate investing.

Behaviors

This is where Facebook advertising gets interesting.

Facebook purchases data from third parties on consumer behavior.

All those loyalty programs at grocery stores and drug stores that require you to scan your card, Facebook gets all that info.

They also get all sorts of data on online purchases from companies that specialize in consumer data collection.

If you’re interested, here are some of the companies they get it from:

Acxiom – data from Australia, France, Germany, the UK and US

Acxiom Japan – specifically provides data from Japan

Epsilon – data from the US

Experian – data from Australia, Brazil, the UK and US

Oracle Data Cloud – data from the UK and US

Quantium – data from Australia

Some of those names might sound familiar, like the ones associated with credit reporting. This means Facebook has a pretty good idea about credit scores and income levels.

So what are behaviors?

Behaviors are a combination of Facebook User reported data and purchased third-party data.

It’s kinda like an equation.

User Behavior = User Reported Interests and Demographics + 3rd Party Data.

You can tell Behaviors are from purchased data because in the ad creation process there will be a Source listed.

The Source will say something like: Partner Category Provided by Epsilon

behavior facebook data

Here’s an example of behavior data. It’s not like Facebook has a status “I’m moving house”, but from 3rd party data and their algorithms they can calculate that some people have a higher chance of moving house than others.

How Does Facebook Build Lookalike Audiences?

facebook targeting featured

When you use Facebook Interests and third-party Behaviors together, the algorithm runs differently than if you had just chosen Interests.

AND Facebook passes on the cost of that third party data to you in the form of higher click prices (so it costs a little bit extra, but trust me, it’s worth it).

Sometimes, the combination of Interests and Behaviors makes sense, but it can take some getting used to.

Here’s an example:

Let’s say you want to target people who are looking at buying a new house.

When you target just by Interests, the algorithm is thinking:

I’m looking for Facebook users that are interested in real estate, or real estate investing, or real estate appraisals or any combination of those Interests.

You could also add other interests & demographics to tighten the targeting.

With Behaviors and Interests together this is what the algorithm is thinking:

“I have to find people interested in either real estate, or real estate investing or real estate appraisals or any combination of those three Interests AND they MUST match this Behavior of ‘Likely to Move’ based on information we bought from Epsilon…”

Side note: “Likely to Move” is something you can target by. Don’t ask me how Facebook knows that a user is likely to move houses.

My best guess is it’s a combination of comment data mining, login locations changing or how often their home town has changed + the third party data.

The Lookalike Audience is comprised of AT LEAST the top four Interests and Behaviors of the Facebook User.

That means that you get the benefit of the Facebook data (Interests) and Audience Insights (Behaviors) rolled up together.

Facebook is never going to reveal the exact formula that they’re using, but what they’re aiming for is “relevance”. They want the Facebook User to see the ad as being interesting to them.

So even though you could build up an audience using Interests, there’s no way you could ever use a combination of Interests AND Behavior targeting without the help of Facebook’s algorithm.

What Does This Mean For Affiliate Marketers?

Let’s say you have a Facebook Pixel installed on the Thank You Page of your email opt-in page or ecommerce store.

Once you have enough conversion data from that Pixel you can make a Lookalike Audience from it.

Then, you can run an ad to the Lookalike Audience because they are FAR more likely to buy from you.

That ad is going to be placed in front of the people most likely to be happy to see that content (because Facebook wants people to click, and they wanna get ad spend $$ from you).

Right there, you’ve eliminated one big level of resistance and suspicion.

Facebook made your ad relevant to the audience.

(Getting a low relevance score is something that some affiliates will face – this mostly fixes that problem)

The Facebook Pixel is Awesome

Can you see how powerful the pixel is?

This is one of the reasons Facebook is my main traffic source. They keep innovating and bringing out insane new technology that actually helps advertisers.

Yea it’s a pain in the ass that they are so strict, but the quality is so good that it’s worth walking on glass to make them happy.

How has the pixel been working for you?

Want more Facebook content? 

Here are a couple of other Facebook posts that you might wanna read next!

How to Prevent Facebook Banning Your Account

Ultimate Guide to Facebook + Ecommerce