A marketing team wants to scale its reach to new prospects most similar to its top 5% of purchasers. What is the most effective Lookalike Audience percentage range to balance similarity with reach for this specific goal?

A Lookalike Audience is a powerful targeting tool used by marketers to find new potential customers who share similar characteristics with an existing group of valuable customers, known as a source audience. In this scenario, the source audience is the marketing team's top 5% of purchasers. This is an excellent source audience because these individuals represent the most engaged and high-value customers, meaning they are highly likely to convert again or spend more, making them an ideal blueprint for finding new prospects. When creating a Lookalike Audience, advertising platforms allow marketers to select a percentage range, typically from 1% to 10% of the total population in the target country or region. This percentage dictates the balance between similarity to the source audience and the potential reach of the new audience. Similarity refers to how closely the characteristics of the Lookalike Audience members match those in the source audience. Reach refers to the total number of unique individuals who can be targeted with the ad. A 1% Lookalike Audience is the smallest in size but contains the people most similar to the source audience, offering the highest potential for conversion due to extreme relevance. As the percentage increases, for example to 5% or 10%, the audience size (reach) grows significantly, but the similarity to the source audience diminishes because the platform includes individuals who are progressively less like the original top purchasers. For the specific goal of scaling reach to new prospects most similar to the top 5% of purchasers while balancing similarity with reach, the most effective Lookalike Audience percentage range is 1% to 3%. This range provides an optimal balance for several reasons. The 1% segment ensures the highest degree of similarity, capturing the very best matches. Expanding to 2% and then 3% incrementally increases the audience size, providing greater reach without a significant drop-off in the quality or similarity of the prospects. This allows the marketing team to effectively scale their efforts by reaching a larger pool of highly relevant individuals. Beyond the 3% mark, the dilution of similarity typically becomes more pronounced, potentially leading to lower conversion rates and less efficient ad spend, as the new prospects become increasingly dissimilar to the high-value top purchasers. Therefore, focusing on the 1% to 3% range maximizes the likelihood of attracting new customers who genuinely mirror the desirable traits of the existing top performers.