Meta Ads Custom Audiences Explained

What Are Custom Audiences?

Custom Audiences allow advertisers to reach people who have already interacted with their business, whether that’s through their website, social media, app, or customer database. Instead of targeting cold audiences (people who have never heard of your business), Custom Audiences lets you focus on users who already know your brand, increasing the likelihood of engagement and conversion as well as maximising ad spend efficiency.

How Custom Audiences Work

Meta’s Custom Audiences enables your business to retarget users who have already engaged with your business, using first party data collected from different sources. This allows you to serve highly relevant ads to users who are already familiar with your brand, increasing the likelihood of conversions. 

Types of Custom Audiences & Their Use Cases

One of the most common methods is website visitors, tracked using the Meta Pixel. This small piece of code is added to your website and collects data on user behaviour, allowing you to retarget visitors based on their actions. For example, you can create an audience of users who viewed specific pages, such as a hotel’s wedding venue section, or those who added an item to their cart but didn’t complete their booking. This ensures that potential customers who showed initial interest can be re-engaged with targeted ads, increasing the chances of conversion.

Another powerful source for Custom Audiences is customer lists, which can include email addresses, phone numbers, or data from CRM systems. By uploading this data to Meta, you can match existing customers with their Facebook and Instagram accounts to serve relevant ads. This is particularly effective for loyalty programs, past guests, or users who signed up for a newsletter, allowing you to tailor campaigns for re-engagement, such as promoting a special offer to previous hotel guests.

For businesses with a mobile app, Custom Audiences can also be built based on app activity using Meta’s Software Development Kit (SDK). This allows you to target users based on their in-app behaviour, such as people who installed the app but haven’t booked a stay, those who frequently browse offers but don’t convert, or loyal users who engage regularly.

Beyond website and app interactions, social media engagement is another key data source. Meta allows businesses to create Custom Audiences based on user interactions with their Facebook or Instagram pages, posts, videos, or ads. This means you can retarget people who liked, commented, or shared your content, watched a video ad, or sent a message via Messenger or Instagram DM. 

While Custom Audiences offers an excellent way to re-engage high-intent users, it’s absolutely crucial to prioritise data privacy and consent. With regulations like GDPR and CCPA, it is paramount that your business collects and uses customer data ethically. Transparency is always key, users should be aware that their data may be used for marketing, and they should have the option to opt out if desired.

Benefits of Using Custom Audiences

Meta’s Custom Audiences offers a powerful way to refine ad targeting, ensuring that marketing efforts are directed toward people who are already familiar with your brand. This results in more effective campaigns, lower ad spend waste, and higher conversion rates. Here are some of the key benefits of using Custom Audiences:

1. Retargeting potential customers who have interacted with your business

One of the biggest advantages of Custom Audiences is the ability to re-engage users who have already shown interest in your business. Whether they’ve visited your website, interacted with your social media content, or even engaged with a previous ad, Custom Audiences allow you to target these users with tailored ads. This is particularly useful for hospitality businesses, as potential guests often browse multiple options before making a booking. Retargeting keeps your brand top of mind, increasing the likelihood of converting interest into action.

2. Reducing ad spend wastage by targeting relevant users

Traditional advertising often casts a wide net, meaning a significant portion of your budget may be spent on users who have no real interest in what you’re offering. Custom Audiences help reduce this inefficiency by focusing on users who already know your brand. This means less money spent on cold audiences and more budget allocated toward high-intent prospects, ultimately improving return on ad spend (ROAS).

3. Boosting conversion rates through audience segmentation

Custom Audiences allow for precise segmentation based on a user’s past interactions with your business. Instead of showing the same ad to everyone, you can create tailored campaigns for different audience groups. For example:

• Retarget cart abandoners with an exclusive discount to encourage them to complete their booking.

• Show first-time website visitors an ad that introduces your brand’s story and USPs.

• Target past guests with a special offer to encourage repeat bookings.

4. Personalised messaging based on user engagement

People respond better to ads that feel relevant and timely. With Custom Audiences, you can tailor ad messaging to align with how a user has previously interacted with your brand. Someone who watched a promotional video might see an ad highlighting guest testimonials, while a user who clicked on a special offer page could receive a reminder about the limited time deal. This level of personalisation increases ad effectiveness, making users more likely to take the next step.

Best Practices for Custom Audiences

Creating Custom Audiences is just the first step, optimising them for performance is where the real impact happens. By following these best practices, you can ensure your Meta Ads reach the right people at the right time, improving engagement, reducing wasted ad spend, and increasing conversions.

1. Keep audiences fresh by regularly updating customer lists

If you're using customer lists (such as email addresses or phone numbers), it's essential to keep them updated. Over time, people change email addresses, opt out of communications, or become inactive, which can affect the relevance of your targeting.

2. Use exclusions to avoid targeting converted customers unnecessarily

If someone has already booked a stay, made a reservation, or signed up for an offer, they probably don’t need to see the same ad again. Failing to exclude converted users can lead to wasted ad spend and a poor user experience. You can set up exclusion lists in Meta Ads Manager to remove users who have already completed the desired action (e.g., booked a stay, or registered for an event).

3. Combine custom audiences with lookalike audiences for scalability

Custom Audiences are fantastic for retargeting, but they’re limited to users who have already interacted with your business. To scale your ad campaigns, you can create Lookalike Audiences based on your Custom Audience. This helps you reach new potential customers who share similar characteristics with your existing audience. A great example of this is creating lookalike audiences based on your best performing Custom Audiences (e.g., past guests, frequent customers, high-spending users).

4. Test different audience segments to refine ad performance

Not all Custom Audiences will perform the same. Testing different audience segments can help you understand which groups respond best to your ads and where to allocate your budget for maximum return. A good way of approaching this is by segmenting audiences based on different behaviours, such as website visitors vs. email subscribers, past customers vs. new leads and social media engagers vs. video viewers.

Custom Audiences vs. Lookalike Audiences

Meta’s Custom Audiences and Lookalike Audiences are two powerful tools that serve different purposes within Meta Ads. Custom Audiences allows you to retarget users who have already engaged with your brand, such as website visitors, past customers, or social media engagers, helping to re-engage warm leads and encourage conversions.

On the other hand, Lookalike Audiences are designed to expand reach by finding new customers who share similar characteristics with an existing audience. Meta’s algorithm analyses behaviours, demographics, and interests from a Custom Audience source and finds new users likely to be interested in the business, making Lookalike Audiences a highly effective tool for discovering new potential guests or diners.

While Custom Audiences focus on warm leads who are already familiar with your brand, Lookalike Audiences help introduce your business to a new but relevant audience. This makes them ideal for scaling ad campaigns without losing targeting precision. Custom Audiences are best used for remarketing, loyalty campaigns, and re-engagement, while Lookalike Audiences work well for finding new potential customers who match the profile of high value guests or diners. By combining both, your business can create a full-funnel strategy that nurtures leads while continuously attracting new customers.