Should Regulated Industries Market to Lookalike Audiences?

A topic that’s come up recently in the office? Running targeted Facebook ads in regulated industries. Specifically, running Facebook ads targeted to lookalike audiences for the banking industry. The question is: should we do it? Is this getting us into trouble?

It’s a sticky situation. As marketers for financial institutions, it’s important for us to know the industry regulations and to work closely with bank compliance teams to ensure we’re getting it right. When advertising loans of any kind, we know we can’t target by race, color, religion, national origin, gender, marital status, age, or whether a person is receiving public assistance. (See also: Regulation B.) So of course, we don’t target those intentionally.

Additionally, there has been a lot of news lately about Facebook’s recent changes in targeting due to lawsuits by the NFHA and others. The company has responded by saying that they will remove age, zip code, and gender targeting for housing, employment, and credit ads, and they’ll create a specific portal for anyone who wants to use these. However, it won’t be launched until December 2019.

And it’s lovely that they’re making changes and providing solutions, but it still leaves the question: what about using a lookalike audience?

Wait: what’s a lookalike audience?

In Facebook and other digital marketing platforms, you can find new customers to target who look just like your best current customers. All you do is upload a customer list (or pixel a page or app to capture traffic) into the platform of choice, and the algorithm goes out and looks for people who match your list.

Aside from providing the seed list, it’s really hands-off on the part of the marketer. We rely on the robots to do the work. After a few moments, the robots return with a list of people who are similar our existing customers.

According to Facebook, “When you create a Lookalike Audience, you choose a source audience (a Custom Audience created with your pixel data, your mobile app data or fans of your Page) and we identify the common qualities of the people in it (ex: demographic information or interests). Then we find people who are similar to (or ‘look like’) them.”

Sounds great, right?

But hypothetically: what if our existing customers are all young, white adults who live in upper-class suburbs? Does that mean that Facebook is only finding other white young adults in upper-class suburbs? After all, it does say “demographic information.” Even if we have the best of intentions, we might be getting ourselves into trouble. We might not have to add any extra targeting to our lookalikes at all and still find ourselves out of compliance.

So the real problem is what’s happening behind the scenes, the stuff we can’t see.

From my experience, Facebook in particular knows about regulations, and they don’t want you to get yourself into trouble. I learned this the hard way with the first hiring campaign I ever ran, way back when I was a new Facebook ad manager. I added a fairly broad age targeting to an ad set and it was immediately denied by the platform because it was a risk for discrimination—you can’t target by age when hiring.

Others might say, well, that’s exactly what Facebook wants you to think. They want you to trust them.

The optimist in me wants to believe that tech giants wouldn’t maliciously target people they’re not supposed to target. But they also need to make sure that they’re getting you results. After all, if you’re not getting any ROI from the platform, are you going to keep using it? And what if the users giving you results happen to fall into discriminatory territory? The ads are going to keep optimizing to get those users.

So what’s a marketer to do?

There are a few ways to use lookalike audiences that won’t fall into the danger zone of non-compliance:

First, use lookalikes to target more broadly for brand awareness, not special offers. That way, you’re steering clear of those compliance issues.

Second, if you have a robust content strategy on your banking site, you could always send lookalike traffic to helpful articles and informative pieces. Add lead forms and try to snag that conversion.

At the very least, make sure your pages are pixeled. Then, reach people who have visited certain pages with remarketing ads to stay at the top of their mind. If someone’s reading a blog post about business loans, chances are that person is a business owner—or is thinking about becoming one. You can then reach them with more targeted approaches, and you don’t have to worry about narrowing down your targeting at all.

Granted, remarketing might change by the time Facebook releases these new advertising portals, but until then, this is a safe strategy.

We’d love to hear your opinion.

Overall, the jury’s still out as far as solid answers are concerned on the issue of lookalike audiences for financial institutions. But if you’re a bank or a bank marketer with similar issues, we’d love to hear your opinion on the matter! Send us an email or join the conversation on our Facebook page.