How Do Facebook Ads Work?

• Trevin Shirey


• 5 Apr 2024

After Google and YouTube, Facebook is the third most visited website in the world. And with a total of 2.91 billion monthly active users on Facebook — out of which 1.6 billion log in every day — it’s easy to see why Facebook is a required component of any social media marketing strategy.

Despite the pressure on Facebook to change its advertising policies, the platform is still growing. Over 3 million businesses use Facebook ads with 40% of them finding it the most profitable paid channel. So, how does Facebook advertising work and how can you use it to increase your return on investment (ROI)?

What is Facebook advertising?

Facebook advertising is a powerful paid marketing tool that can help you reach the right audience and grow your business. Facebook ads allow you to show personalized promotions to your target audience on their news feed (or on the right-hand column on desktops).

The beauty of Facebook advertising is that you can use segmentation categories so these ads appear to people who would most likely be interested in your products or services. You can usually target users based on their demographics, location, interests and other profile information.

There are several Facebook advertising examples to choose from, depending on your advertising objectives.

• Promoted posts
• Text ads
• Image ads
• Videos
• Events
• Retargeting
• Carousels
• Instant experiences
• Collections
• Leads
• Slideshows

Facebook ads can appear throughout the app, including your news feed, Stories and Messenger. They look similar to your normal posts, except for the added “sponsored” label that indicates you’re seeing an ad, a call to action (CTA) button, links and product catalogs.

The most popular objectives in Facebook ad campaigns are increasing traffic to one’s website, getting leads and generating sales. You can also track the results of your ads to see how well they are performing.

How much do Facebook ads cost?

There are no limits when trying to come up with a Facebook advertising budget. How much it costs to advertise your business on Facebook depends on many variables, including:

• Audience targeting: The more narrow or niche your audience is, the higher the cost. You also tend to pay more when targeting older generations.

• Ad placement: News feed ads have the lowest cost per click (CPC) while Stories ads have the highest.

• Campaign duration: The final cost will depend on the number of days and hours the campaign lasted.

• Competitiveness in your industry: Some industries, like finance and insurance, are more competitive than others for ad space, which can drive up the cost.

• Day of the week: The CPC is highest on Fridays (followed by Thursdays) and lowest on Sundays.

• Time of the year: Ad costs fluctuate during different seasons and events. Ad spending on cost-per-like (CPL) campaigns is usually lower during the first quarter of the year.

• Time of the day: CPC is normally the lowest between midnight and 6 a.m. in any timezone.

• Location: The average cost varies widely for different countries.

Facebook advertising costs have increased in the last few years, partially due to the extra competition from other advertisers who have found success with Facebook ads. It’s a delicate balance between getting the results you want and optimizing your expenses. It’s important to use the average costs as a point of reference rather than a standard. Otherwise, you risk setting unrealistic expectations for your Facebook ad campaign.

The benefits of Facebook ads

Facebook ads work for small businesses, large corporations, start-ups and individuals alike to get more visibility on their Facebook content and boost traffic to their website or landing page.

Here are some of the benefits of using Facebook advertising.

• Massive audience reach: With users spending almost 20 hours per month on the Facebook app, you can be sure that your ads will be seen on one of the most active social media networks.

• Advanced targeting options: Facebook ads target you when an ad’s parameters are set based on your age, gender, location, interests, language, behaviors, connections, education, workplaces or even life events. Marketers use segmentation to increase the likelihood of clicks from those who will derive the most value from a particular offer.

• Objective analysis tools: With built-in analytics, you can track your ad’s performance as it’s recorded and available in real-time. The metrics will help you understand what’s working and where you can optimize them more.

• Budget-friendly scalability: The only limit to how far you can take your Facebook ad campaign is your budget. Considering the potential impact, Facebook ads have remarkably affordable CPCs

• Easy set-up process: With a little bit of time and learning, you can create basic Facebook advertising campaigns that increase awareness and resolve Facebook marketing plateaus for your brand.

How do Facebook ads work in 4 steps:

Now that you know the definition and benefits, how do you run a Facebook ad? Read the below steps to see how to set them up.

1. Set up Meta Business Suite

Before you start with Meta Business Suite, you first need to create a Facebook business page or an Instagram business account. You may prefer using Meta Ads Manager (previously known as Facebook Ads Manager), which is a great all-in-one tool for creating, managing and tracking ads.

However, Meta Business Suite centralizes all of your marketing and advertising activities on both Facebook and Instagram, giving you an overall view of ad accounts, business pages and other necessary tools. When creating your account, Facebook will ask for your name, email address, Facebook business page and business name. Click “Ads” from the left menu bar and follow the instructions to create an ad account.

2. Install the Meta pixel

It’s great to boost a post or set up an advertising campaign, but you won’t be able to measure the effectiveness. How much traffic did your website gain? Did this ad lead to any sales? The Meta pixel is a tracking code that you must create in Meta Business Suite and add to your website before you create any ads.

3. Create your ad

Once the first two steps are complete and you added your preferred payment method, navigate back to the “Ads” button on the left menu bar. From there, click “Create ad”.

1. Choose your ad type: Do you want to create a new ad or boost a Facebook or an Instagram post
2. Select your goal: Choose between gaining more traffic and increasing sales.
3. Name your campaign: Write a headline and description, add your media, select a button label (if applicable) and paste your URL.
4. Target your audience: Select who should see your ad or create a lookalike audience for your ads.
5. Set your schedule and budget: Decide how much you want to spend on your campaign, followed by setting the start and end dates.
6. Pick your ad placement: You have a choice between Facebook, Instagram and Messenger.
7. Post or schedule!

4. Monitor your ad’s performance

Monitoring and optimizing your ads are just as important as creating them. Facebook’s algorithm needs time to determine which audience is most interested in your product or service, so practice patience as you won’t always see results immediately.

Earn a higher ROI from your ads with Inbound Marketing Inc.

If you’re looking for a way to reach more customers and grow your business, Facebook advertising is a great option. With a little planning and effort, you can create successful Facebook ads that will help you achieve your business goals.

Make social media advertising work for you on one of the most popular social platforms. We’ll help you come up with your target audience and keywords, develop a Facebook advertising strategy and create your ads. After the launch, we keep monitoring and testing your ads so we can improve them.

Ready to take Facebook ads off your plate and make some revenue? Contact us online or call us at 888-675-9886 today to speak to one of our strategists.