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Insights for Entrepreneurs

Sponsored Facebook Ads: The Small Business Owner’s Quick Guide

You know those sponsored ads you see when you’re browsing your personal Facebook page?

Sometimes they’re not so relevant. You tell Facebook that you enjoy “Game of Thrones” and NFL football, and they deliver you ads for gardening tools and baby clothes.

But sometimes they are relevant, and you find yourself clicking through anyway.

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If you’re a small business owner, you’re highly interested in switching roles—instead of being the person to click the ad, you want to be the person behind the ad. And why not? Facebook allows you to target highly specific audiences: people who have already expressed interest in the very things you have to sell them.

There’s just one problem: you have no idea how to run sponsored Facebook ads.

Let’s fix that.

Facebook Ads: The One-Minute Lesson

The basic premise of a Facebook ad is easy:

That’s the goal, anyway.

Considering that Facebook has access to information like demographics (age, location, gender), interests (sports, movies, etc.), what pages people “like,” and can even place people in certain categories based on their likes and interests, it can be a powerful tool for a small business like the one you run.

If you’ve ever been browsing your own Facebook page and were startled at the uncannily relevant ads that reached you, then you know how effective this can be.

(Note: if you’re still confused, you can use this tool to simulate what it’s like to create an ad on Facebook.)

In short, Facebook can be the ideal place to find targeted, local, relevant customers you haven’t been able to find before. But you won’t get very far with Facebook ads unless you know what you want out of it first.

Goals: Why You Need Them

“What? Goals? Why do I need goals? I know what I want—more customers!”

Easy there, entrepreneur. You’re going to need to be a little more specific than that when it comes to Facebook ads.

Consider all of the different variables you can target:

What defines success for your business might not define success for, say, a hotel or a restaurant chain. You have to consider which of these variables is the most effective way to spur growth and customer interest what you have to offer.

Unfortunately, we can’t tell you which variable works best for you. You’re just going to have to know that for yourself. Check your own data to see what’s most important to you. Hint: if you’ve created an App, then “App installs” will be more important than “clicks to website.”

Budget: What Is This Going to Cost You?

The good news is: it’s all up to you.

The bad news is: it’s all up to you.

It can be a bit tricky to figure out an appropriate budget for your first round of Facebook ads. You don’t want to lowball and generate no interest for your business with a small sample size. But you don’t want to go overboard, mess things up, and get discouraged, either.

So before you charge anything to your credit card, learn a few things from Facebook’s own guide:

“The cost of your ads on Facebook is up to you. You can choose between a daily or a lifetime budget, as well as a cost per thousand impressions bid (CPM) or cost per click bid (CPC). You’ll only pay for the clicks or impressions you receive, up to the amount you set for your budget.You can view the cost of your ads from your ads manager.”

The long story short is that you’ll be free to determine your own ad budget, with virtually no restrictions. But having that much power in your hands will be dicey unless you take a guided approach to figuring out how much you should spend.

One tip is to use your goals to determine your budget. Jon Loomer of—where else?—JonLoomer.com recommends catering your budget to your goal. If you don’t know your goal first, you won’t know what kind of budget you want.

For example, you want X new Facebook fans? Y amount of App installs? Determine that first, and determine what you’d be willing to pay to reach that goal.

You also have to consider how big your audience is. You might need to spend more to reach a broader audience. Or you might be spending too much, requiring that you whittle down your target audience and therefore whittle down your budget.

How do you know when it’s time to adjust your budget? You don’t. That’s entirely up to you. But you should at least wait until you have a relatively large sample size of people who have seen your ad before you gauge its effectiveness. 15 people clicking through to your site is not enough to know whether or not you have a successful ad campaign on your hands.

Facebook Campaigns, Good and Bad

Not everyone is guaranteed Facebook sponsored ad success their first time out. According to Inc.com, advertising consultant Erika Penzer Kerekes tried sponsored ads a dozen times without a good return on investment. “I always include them, and I always end up pausing them after a few days because they’re getting zero results. I’m puzzled by this as I know lots of other businesses have used them very successfully,” she said.

Of course, if your sample sizes are limited to only a few days, you might be doing something wrong. After all, companies like Reverb.com have seen a lot of success. Reverb was able to gain more 30,000 likes for its Facebook page with what was described as a “very modest investment.”

Your own success will depend on your approach to Facebook ads. Don’t be afraid to get creative, think outside the box, and whittle down your advertisement campaign to people you know will be interested to see what you have to offer. Follow these basic tips, and you’ll be sure to enhance your chances for success:

Your Turn: Have you tried Facebook ads? Did they work for your business? If you haven’t tried ads, why not?