How much audience overlap is too much?

My experience running FB ads is the following : 

• when I ran LaL targeting adsets, it was key and mandatory to avoid any overlap between adset as the audience is not that large, especially in tier 1 non US country like western Europe. 
• For other targeting, i try to avoid big / obvious overlap. I can't confirm the potential CPM increase but from my perspective, this is more related to common sense to avoid them as much as possible.  

Audience overlap isn't really much of a concern on Facebook -- Facebook has 1.56BN DAUs as of Q1 2019 -- but it can become problematic when you start using very broad lookalike scoping (eg. 10%) on AEO and VO campaigns that are running simultaneously (see more in this answer: What is the difference between AEO and VO bid types on Facebook?).

VO and AEO campaigns naturally tend to iteratively reduce / hone targeting to the same groups of people, and running campaigns with those types of bid strategies on the same audiences will magnify the impact of the simultaneous targeting.

EDIT: re-reading this answer a few weeks after writing it, I think the point I was trying to make isn't clear.

Audience overlap doesn't have to be / shouldn't be a concern on Facebook: Facebook's penetration is large enough that, if you are smart about campaign construction, you don't need to be concerned with audiences overlapping (and thus driving up your CPMs).

But what does being smart about campaign construction mean?

• If you are running multiple AEO / VO campaigns, you are either targeting very specific segments that are independent of each other, or you are running fundamentally different creatives;
• You aren't using broad Looaklike (eg. 5%+) audiences in the same geos across multiple campaigns;
• You aren't running test campaigns against the same custom audiences as live campaigns with significant budgets;
• With multiple AEO / VO campaigns, you are using very strong signal events (eg. purchases) and not up-funnel events like registration or tutorial complete. If you have multiple event-optimized campaigns running, make sure the events are down-funnel enough to really segment users.

The point I was trying to make with the original post was that audience overlap doesn't have to be a real liability on Facebook -- it's certainly possible to avoid that problem with just a little bit of planning and strategy. Obviously if you are spinning up multiple VO campaigns with 10% LaL audiences based on payer seeds and targeting up-funnel events in the US, you'll run into problems with overlap.

Facebook advertising isn’t as simple as it may seem. Whatever your level of experience may be, you’re likely to make a few mistakes. A common error among users, which we are going to discuss, is by far the most frequent mistake made that can defeat powerful outcomes for advertising. This indiscretion is “Audience Overlapping.”

This article is going to explain what Facebook audience overlapping is, and why it’s considered to be the silent killer of your ad performance. We will also dive into how you calculate audience overlap percentage and how you can overcome the problem.

What is Audience Overlap?

Audience overlap occurs when people promote content to two or more similar target audiences. Overlapping audiences is not necessarily a bad thing, but it can lead to inadequate delivery of your ads, which can affect your desired results. Not understanding how to recognize and prevent audience overlapping can cause you to waste a lot of your time and money in going after the same person.

To better understand this problem, let’s look at the structure of a Facebook campaign. Every campaign has multiple ad sets, and each set has numerous ads. Different ads are competing with one another under a single set. This is not a problem, as you want to display multiple ads to your audiences with the same goal in mind. This way, you can calculate the performance of your ads. With these calculations, you can evaluate the efficiency of your ads, and can enhance your Facebook marketing strategy.

Nine times out of ten, audience overlapping can occur when you are creating your 2nd and 3rd ad set. At this point, the structure of your different sets may have similar interests. Let’s look at an example:

You own a company named XYZ that sells cosmetic products online, and you have created three different ad sets with “unique” audiences.

• Your 1st target audience is interest-based. You know that a large portion of your customers are concerned about their face, so you created a targeted audience interested in face wash products.
• You based your 2nd targeted audience on demographics. Your audience is made up of 20-to-45-year-old women, which are your best female customers.
• You then created your 3rd audience, which is a 1% look-a-like to your previous customers. You completed this by uploading your current list of customers to Facebook.

These targeted audiences are part of a commonly-structured Facebook campaign. Let’s look at how an audience overlap error may arise in this situation.

Your three audiences will most likely have several shared interests between them, such as:

• Among the audience interested in face wash, you will probably find women who are between 20 and 45 years of age.
• Among the women who are 20-to-45-years-old, there will be some who are interested in face wash.
• While many of your customers may be similar, your look-a-like audience will also contain both sets of women — those who are between 20 and 45 years of age, and those who are interested in face wash.

When you start to compete against yourself, the expenses you are putting toward your ads increase. The frequency in which your ads are getting displayed also becomes limited. As a result, you pay more than what you should be paying.

Stop paying Facebook to advertise against yourself! Once you do this, you will see a dramatic improvement in your ROI.

How to Discover Audience Overlap?

If the size of your target audience is too small, you will saturate your audience with your advertising quickly. But, if you have multiple audiences in the millions, people will belong to more than one audience, thus creating the overlap. So, how do you check for this audience overlap issue, and how do you identify which audience set you should target?

The audience overlap tool that Facebook provides is all you will ever need! With this tool, you can check the percentages when your different audiences begin to overlap. This tool is in the audience section of the Facebook ads manager. Simply follow these steps:

• Locate the audience section in the Facebook ads manager
• Select the audiences you wish to compare. (You can select up to 5 at one time)
• Click “action” then “show audience overlap”

The tool will show both the “overlap” and the “% overlap of selected audience.” The “overlap” column shows the number of people in the selected audiences. The “% overlap of selected audience” column compares the number of people in both audiences to the total number of people in the selected audience. This allows you to see the overlap percentage.

Due to privacy reasons, the audience overlap tool does not allow you to analyze an audience that is less than 1,000 people.

How can you avoid advertising against yourself?

The most frequent question asked while calculating the overlap is, “How can I avoid pitting my Facebook ads against each other?”

We have listed the two most promising solutions for your problem:

1. Consolidation of overlapping ad sets: If you have more than one ad set that targets similar audiences, then you can combine these sets into one larger budget, acquiring better results.

1. Enhance your targeting: By using the audience’s age, gender, location, interest, and/or behavior-based targeting, you can assure each ad set has the precise targeting method.

Both the consolidation and refinement methods are effective means to fixing your marketing problem. By making a few simple adjustments to your advertising strategy, you can stop paying more and start receiving better results.

Go ahead and try it! If you have any questions, shoot us a message on Facebook at www.facebook.com/Cibirix/ or contact us directly at www.cibirix.com. We’ll be glad to help!

What is a high audience overlap?

What is not a bad percentage for audience overlap between ad sets?

How do you deal with overlapping the audience?

How big should a custom audience be?