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How Do Facebook Ads Work For Your Business

Social media is often referred to as a ‘gold mine’ of customer data – each click, like, comment, and share are compiled into massive data sets, allowing businesses to extract small nuggets of important information for their target audience. 

Facebook ads are undoubtedly the backbone of the digital marketing strategy of small businesses. Businesses that fail to embrace this shift to the social media realm will find themselves struggling to increase exposure and traffic, create new and long-lasting customers, and promote their products and services. 

This post aims to include Facebook ads in the resources of any small business – it provides a general overview of how Facebook ads work and suggests solutions that aid marketers in exporting Facebook data and deriving meaningful insights from that data.

How to advertise on Facebook

Facebook is the biggest social network worldwide, and thus, is the most popular place for social media marketing. There are many good reasons that Facebook has quickly worked its way into the marketing strategy of over 200 million small businesses; this cannot simply be ignored by marketers. 

Facebook ads are incredibly cheap compared to other ad networks. You can set the budget you would like to spend from the start, and Facebook uses it as efficiently and effectively as possible. The more you spend, the more people you are likely to reach. Furthermore, depending on your advertising objective, Facebook allows you to choose from various ad formats.

With so many active users logging in their accounts through a mobile device or desktop, and the average user spending more than 2 hours daily, your audience is definitely on Facebook. Knowing so much about its users, Facebook is almost unparalleled when it comes to targeted marketing. It offers you the opportunity to tailor your ad and message depending on the users’ demographics, locations, interests, and behaviors. Most importantly, once you find the audience that increases your sales or takes action on your website, Facebook records this information and searches for people who share similar characteristics. 

Types of Facebook ads 

Here is a list of multiple ad formats to choose from for Facebook business advertising:

  • Image
  • Video
  • Carousel
  • Collection

Check out a brief description of each type of ad and what they look like.

Image ads

This is a single photo that allows you to showcase your brand, product, or service. People can click anywhere on the image to visit your website. You can create image ads in Ads Manager or boost a post that includes an image from a Facebook page.

1 image ad

Video ads

Video ads start playing when the user places a mouse cursor over them. They can appear in streams, user feeds, or stories. Upload a video that you have created, or create one in Ads Manager.

2 video ad

Carousel ads combine up to ten images or videos in a single ad that the user can scroll through. Users can seamlessly transition through multiple products or services that link to different landing pages or view different features of a single product. You can create a carousel ad from your Facebook page or in Ads Manager.

3 carousel ad

Collection ads

Collection ads are designed to appeal to mobile users. Just like carousel ads, the goal is still to showcase multiple products, but in a mobile-friendly way that showcases all products at once. Here’s how to create a collection ad using the Ads Manager.

4 collection ad

In addition to the mentioned formats, you can also benefit from Poll ads, Slideshow ads, Instant Experience (aka Canvas) ads, Messenger ads, as well as Lead ads that are specifically designed for mobile devices. 

At the same time, you can categorize Facebook ads not only by design or format but also by their goal. For example, if you need to reach as many people as possible, you may need sponsored posts. Whereas to boost traffic to your website, you will most likely use conversion ads. Let’s see what options you have here.

How well do Facebook ads work?

What are the critical elements that help determine whether small businesses derive any benefits from Facebook ads, thereby getting a positive return on investment? Good question! Here are some best practices that could increase the chance of converting clicks, likes, and shares into paying customers. 

Understanding which industries benefit most from Facebook 

Facebook has listed several industries that primarily leverage this platform for advertising its products or services.

11 fb for industries

These industries seem to have embraced Facebook in their overall marketing plan. But this should not discourage any other type of business from harnessing the power of Facebook – with the right amount of attention, dedication, and time, any business can reap the benefits of Facebook marketing. 

Facebook’s latest ad benchmarks – click-through rate, cost per click, conversion rate, and cost per action – help businesses plan their ad campaigns better. You can check how different industries perform on each metric here

The average metrics are listed below: 

  • Average click-through rate – 0.90%
  • Average cost per click – $1.72
  • Average conversion rate – 9.21%
  • Average cost per action – $18.68

Figuring out your campaign goals

Identifying your ad campaign objectives is crucial for the overall success of your business. Some goals are listed below:

  • Boosting traffic to your website
  • Increasing brand awareness
  • Generating more leads
  • Increasing your sales
  • Encouraging users to contact you through your Facebook page
  • Increasing the number of video views or app installs

The more specific you are about your goal, the better your results will be.

Using precision targeting

Facebook Ads Manager offers you the opportunity to target a custom audience that meets the criteria of your ideal customers (location, demographics, age, interests, behavior, etc.). Over time, you will be able to measure the effectiveness of your ad campaign through tools like a lookalike audience or the Facebook Pixel. The ability to clearly define these criteria is what sets Facebook apart from Google Ads, which only target keywords but can hardly identify who is searching.

Conducting ad data analysis 

Ad data analysis is a crucial aspect of successfully running your ad campaign. It includes taking raw data and turning it into meaningful insights you can use to monitor your marketing efforts efficiently. Analytics helps you identify what ad campaign elements worked well and better understand your audience and how it responded to your products and services. You can use a variety of metrics, including website traffic, click-through rates, conversion rates, post engagement, and many others to analyze your ads. The analytics results allow you to determine whether your business is meeting its ultimate goals. The collected data serves as input to better plan your future ad campaigns.

Facebook Ads Reporting provides a simple way to track the performance of your ad campaigns. This free tool enables you to create reports by choosing the metrics and breakdowns you would like to view. You can also turn on email scheduling and select how often you would like to receive reports. 

Measuring the success of your ad campaign by collecting data and insights from Facebook is vital to identifying what is working well and minimizing ad spending. Building detailed daily reports through Facebook Ad Analytics is simple but can become more complex with the creation of weekly or monthly reports. 

The use of data integration tools like Coupler.io can help you tackle common issues encountered in Facebook Ad Analytics, including problems with report updates, bad filters, bad sorting, and lack of visualization options. 

Coupler.io offers a more flexible way to process and visualize data from Facebook Ads with a dedicated Facebook Ads integration. Importantly, you can quickly and easily extract the data and import it to Google Sheets, Excel, or BigQuery without a single line of code. Check out Coupler.io today!

Related Posts

How do Facebook sponsored posts work?

What are Facebook sponsored posts?

Sponsored posts are content that businesses pay to get more visibility and reach more people than they would get with just unpaid (organic) ads. They look like just ordinary posts in the Facebook Timeline, but the only difference is that they are labeled as such at the top of the post. Therefore, they do not disrupt the user’s social media activity – they even stop playing and do not appear in a side-to-side view as the user further scrolls down the news feed. 

Sponsored posts allow businesses to promote their sales and offers, get more visitors and boost traffic to their website, and showcase their brands, new products, or services. They offer businesses of all sizes an affordable option for any planned budget. 

How sponsored ads differ from Facebook ads

Unlike regular Facebook ads, sponsored posts can be created directly from your business account instead of logging in to the Facebook Ads Manager, which requires a bit more time to get familiar with. However, unlike their counterparts, Facebook Ads offer more specific targeting options, have richer formatting options, and have more placement options (instead of only being placed in the news feed). 

When sponsored ads are needed

If the goal is to increase awareness of your brand, products, or services at an affordable price, and promote page likes, comments, and shares, then sponsored posts are a great start. 

How do Facebook automated ads work 

What are Facebook automated ads

Automated ads offer businesses the opportunity to create a custom advertising plan that, in turn, creates personalized ads that adapt over time to help businesses derive better results. Facebook tests up to 6 different versions of your ad to identify the best-performing one.

5 automated ads 1

Facebook unveiled this feature primarily for small businesses that either lack the time or don’t have their own marketing team to create and run Facebook ads using the Ads Manager. The ads run continuously on an average daily budget. 

Automated ads allow small businesses to spend money more wisely than they would if they used poorly optimized manually established ads. They also recommend the use of a preset audience (smart audience), with the option of further tailoring this to a business’ preferences. 

How automated ads differ from Facebook ads

Despite their potential, automated ads lag behind regular Facebook ads when it comes to setting marketing goals. Unlike their counterparts that offer a pool of several different goals, automated ads only offer two options: 

  • Getting more leads 
  • Promoting the business address locally (Facebook recommends one for you)

However, they lack the ability to choose their own marketing goals, which discourages efforts to scale the ads. This would increase your daily budget to expand your target audience while maintaining a positive return.

When automated ads are needed

Automated ads offer a quick way to run an ad and a pretty good degree of audience customization without requiring any technical know-how. The process of creating ads based on the content derived from your Facebook Page is completely automated, thereby saving you time, money, and effort.

How do targeted Facebook ads work?

What are targeted ads

Targeting the right audience is crucial for optimizing your ad campaign. Understanding the people who are most likely to respond positively to your brand, products, and services makes the difference between making a measurable profit and breaking even.

Facebook ads target users based on their location, demographics, interests, behavior, and connections. Once these criteria are clearly defined, you can work out the message and value proposition that will resonate well with the target audience instead of conveying the same message to everyone. It also offers the opportunity to customize the audience that will reach your ad by dividing them into three types: core, custom, and lookalike audiences. 

Types of targeted audience

A core audience is a targeting option, where information about the users (e.g., location or demographics) is extracted from their Facebook profiles as well as their online and offline activity. This type of audience is a good input for new businesses that need to collect sufficient information about their prospective customers before adopting more advanced marketing strategies. 

A custom audience refers to people who have already interacted with your business either through your website, Facebook page, app, phone, or in-store. For example, you uploaded a video on your Facebook page. You can retarget the people who watched your video post for a sufficient amount of time (e.g., 30 seconds). 

A lookalike audience can only be crafted by a custom audience. It refers to people who might not have interacted with your business but are nevertheless likely to be interested in your brand or product as they share similar characteristics with those included in the custom audience list. 

Creating a targeted ad

Here is an example of how targeting options work to help us derive optimal results. We create our first core (saved) audience from scratch by clicking the Audiences section of Ads Manager and then Create a Saved Audience.

7 saved audience

The page calls you to: 

  • Add an audience name
  • Include or exclude custom audiences
  • Determine a location
  • Define age ranges
  • Select gender
  • Select people by language
  • Use detailed targeting

What is most interesting on this page is the detailed targeting. It lets you control who sees your ad based on the user’s interests.

For example, suppose you had a sports clothing business and would like to sell skiing equipment. Which additional characteristics could help you find more favorable customers? Well, since skiing involves traveling to ski resorts, you could try targeting people who travel. These selection criteria increase the visitor’s chances to make an online purchase.

8 detailed targeting

Facebook has also unveiled Ad Relevance Diagnostics that assess whether the ad matches the user’s search. It diagnoses underperforming ads across three dimensions: quality, engagement rate, and conversion rate. 

How do Facebook conversion ads work?

What are Facebook conversion ads?

When dealing with online advertising using Facebook Ads, you should focus on how to increase the conversion rate of your ads. This metric, which essentially defines the success of an ad, is a mishmash of different goals: 

  • Growing sales: purchasing a product from the website or subscribing to a service.
  • Calling the visitor to take action: from signing up for email lists to adding a product to the basket.
  • Just boosting traffic to your website. 

When Facebook conversion ads are needed

Conversion ads encourage prospective customers to visit your website and take action:

9 conversion ad

This type of ad performs at its best when combined with Facebook Pixel. Embedding this piece of code is critical for ensuring that Facebook properly captures the visitors who are most likely to take the desired action and track your business sales. It greatly helps you get a better picture of your audience, retarget the people who have viewed a product or abandoned the shopping cart, create lookalike audiences, and gather helpful insights for creating better ads in the future. 

How do Facebook lead ads work? 

What are Facebook lead ads?

A Facebook lead ad looks like a regular Facebook ad. But when you click on it, instead of being taken to a website, you stay within the Facebook platform and are presented with a contact form. Facebook will populate this contact form with your contact information (like name and email address) derived from your Facebook account. 

When are Facebook lead ads needed

Leads refer to visitors who may eventually purchase a product or subscribe to a service. Suppose you are looking at generating a significant number of leads for your business. In that case, you will most certainly pay less per lead by letting a lead ad automatically prefill the data than having the user manually fill out the form on their device and then submit it to you. 

Facebook also recommends integrating a customer relationship management system to access all new leads in a single place, thereby mitigating the need to download a new CSV file each time you want to check new leads. Importantly, lead ads are now available on both desktop and mobile devices. In addition, they also come in the carousel format, enabling you to showcase several images before people are presented with the form. 

Besides the simplicity of data collection and the great desktop and mobile responsiveness, there are a few issues you need to consider when using lead ads: 

No necessary website traffic increase

While the ultimate aim is to send traffic to your website, users are not forced to submit their data on the lead ad. 

Submission of wrong information

While automatic data entry may untie the users’ hands, they might overlook whether the prefilled information is accurate. For example, the prefilled cell phone number or email address might be old, but the user wouldn’t notice before hastily clicking the submit button.

How do Facebook dynamic ads work?

What are Facebook dynamic ads?

A dynamic ad looks like any other single image, carousel, or collection ad on Facebook. It draws data from a product catalog that contains all relevant images and information about your products and services. Dynamic ads automatically deliver relevant content and offer to users who have already expressed interest in a particular product or service promoted on your website, in your app, or on your Facebook page.

10 dynamic ad

When dynamic ads are needed

There are many reasons you would consider using dynamic ads. Here are some of the most relevant: 

Customized content

Dynamic ads offer personal product recommendations to re-engage the people who have already visited your website, app, or Facebook page. This increases the likelihood of winning them back if they haven’t already converted. 

Regular updates

Unlike static ads, dynamic ads automatically update the content to match the needs and preferences of each user. 

Cross-device targeting

Dynamic ads target users on different devices, such as smartphones, tablets, desktops, and other connected gadgets. For instance, assume that a user scrolls through their Facebook news feed and clicks on an ad for motorcycle equipment. However, they might not be ready to buy any before the start of the following month after they get paid, so the ad sticks in their mind. They open their laptop a few days later and visit that particular website. They will still see the same ads for the specific equipment they clicked on.

No manual work

Significantly decreasing the time spent on manually creating ads allows you to focus more on promoting your business.

How long do Facebook ads take to work?

The time it takes to succeed with a Facebook ad largely depends on the type of industry, the target audience, and the budget. 

If you’re a real-estate business and selling an apartment for half a million dollars, you know that buying a home is not a rush or spontaneous decision. Therefore, advertising will not produce quick results but could certainly introduce your business to those who are actively looking to buy a home. Figuring out how much your ad campaign might have helped over the course of several months could be hard. 

Online clothing, accessory, or electronic stores could immediately see a trackable success in advertising – results of how their ad campaign works could be in their hands within the first few days.

You should also experiment with the minimum amount you should be allocating to your ad daily or per week. Starting with a low budget should allow you to figure out which ads are most effective. If this amount is sufficient, continue until it stops producing any measurable profit for your business. But even if it works at first, that doesn’t mean that it will do so after a certain point. Facebook’s algorithms change over time, and ad fatigue could set in unless you haven’t tweaked your ad over an extended period.

Do Facebook ads work for small businesses? 

With more than 3.7 billion reported social media users on the web, small businesses are increasingly being challenged to increase their social media footprint, all while walking that tightrope of finding the relevant audience with the least possible budget. 

Facebook is the leading social platform, and businesses increasingly rely on it to connect people to brands and products. It has become so ingrained in our lives that posting an ad on it is like shouting through a virtual loudspeaker to every customer or a potential one. According to surveys, Facebook ads have enabled 80% greater discovery of new brands or products than brand or retailer websites. 

What’s more, Facebook ads offer a wide variety of targeting tools that allow businesses to precisely reach tailored audiences who are most likely to click on the ad, whether or not they have come across a particular brand, product, or service before. 

Engagement rates cast light on how the ad circulates in the social media sphere, from simple clicks to reactions, shares, or comments. This insight serves as a proxy to better delineate the target groups and optimize ad campaigns. 

Ultimately, Facebook allows businesses to control the amount of money they spend on their ads. Considering that a Facebook ad can cost as much as $1 per day, it can be amazingly effective and viable for small businesses. Depending on the business’s success for its money, it can change the daily or lifetime budget. Furthermore, once the ad is up and running, there is always the possibility to stop it at any time.

Do you need Facebook Ads for your business?

Facebook ads are powerful marketing tools that every small business should have in its arsenal. They help build awareness of the promoted product or service, drive traffic, increase engagement, and ultimately increase sales and profit. It is up to you to leverage what Facebook offers and build a rock-solid ad strategy to promote your business.

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