Do Facebook Ads Work? The Truth On Are Facebook Ads Worth It

Are Facebook Ads worth it? You might have wondered do Facebook ads work for your business or just some? Especially if you’ve lost money on Facebook advertising before. The reality is that for most businesses, Facebook advertising can work extremely well. In this post, you’ll learn how to use Facebook advertising for small businesses. Plus, we’ll finally show you that Facebook ads do work and that Facebook ads are worth it.

Does Facebook advertising work for small businesses?

The quick answer to does Facebook advertising work for small business is a resounding yes. Most people think that Facebook advertising is only meant for huge companies with million-dollar ad budgets, but that isn’t the case.

Facebook advertising for small business can be just as effective because Facebook advertising scales along with your budget size. Depending on your business you can generate leads from anywhere between $0.60-$20 per lead. That may seem like a large spread, but it also can depend on what kind of offer you are using to generate leads. If your profit per lead is more than the cost per lead, it still is profitable.

Also, most small business owners don’t know how to run Facebook ads profitably and that can be a good thing if you know what you are doing. This means you don’t have to compete with as much local competition when you use Facebook advertising for small businesses.

The reality is the same strategies that work for companies with a large marketing budget, work just as well for small companies. Facebook advertising for small businesses can also be more affordable than Google Advertising.

Since Google Advertising is basically a bidding war on the same keywords, your cost per click and ad budget can get eaten up very quickly with minimal results. For many small businesses, you could spend $1000-$1500 a month and only get 1-3 clicks a day on your ad.

With Facebook ads, you could potentially be generating dozens if not hundreds of leads a month on that size of budget. We will cover more details below on how that can work to advertise your small business, but Facebook ads for small businesses are great because you can scale slowly as your marketing budget increases.

Why are Facebook ads so effective?

Now you may be wondering why are Facebook ads so effective, and the big reason is because of targeting. Love it or hate it, Facebook can gather a lot of data with it’s Facebook pixels all around the internet.

What this means to you is that if you use pixels on your website you can create audiences that represent people taking specific actions you are tracking. An example of this is creating an audience of people who visit your free estimate page, download a lead magnet, or even purchase products from your business.

According to this article on Facebook advertising for small businesses, by Benyamin Elias of Active Campaign – “Over 80 percent of US consumers use Facebook, and the average user spends 40 minutes on the platform every day.” That means there is a good chance that if your business has customers that use Facebook you can likely reach them with Facebook advertising.

Another reason why Facebook ads are so effective is that they give small businesses the ability to scale their advertising budget as they grow. It was mentioned above, but on other platforms and even in traditional media you may need to spend thousands just to get your ad out there.

With Facebook advertising for small businesses, you can utilize sophisticated targeting options and spend as little as a dollar a day and start to see results. As a small business owner, this is super powerful because you can test advertising strategies and won’t go into massive debt if it doesn’t work out.

Are Facebook ads worth it when you post them organically?

Now you may be wondering if Facebook ads are worth it if you are just posting them organically on your business page. Unfortunately, the reality is that for most people organic posts on your Facebook business page get little to no engagement.

Thanks to the newer Facebook algorithms your business page posts get less exposure than personal profiles. Facebook has really become a pay to play platform for promoting a business page and the only real way to get exposure through that page is with running Facebook ads.

Certainly, you can get results using a Facebook business page if you are highly active and are continually providing value there. However, you would likely have to put in way more time than it’s worth to maintain that high engagement on your business page.

There are other methods you can use to promote your business organically on Facebook that can work great for building a business, but it’s usually going to be through your personal page or with Facebook groups.

Posting your Facebook ads in targeted groups

One of the few areas that can still work well to advertise your small business on Facebook is posting in Facebook groups. The reason for this is that Facebook doesn’t limit the exposure of content in these groups as they do in other formats on the platform.

You can post in some groups as your business page, and others just a personal page. It’s up to you how you want to interact, but for lots of people, they will prefer to do business with individuals, not necessarily your business. So posting as yourself on a personal profile can improve your exposure to some degree, but both can work.

Another benefit of using Facebook groups to advertise your small business is that these groups can be highly targeted. One major reason small businesses struggle to advertise on Facebook is that they are trying to market to everyone.

When you market to everyone you really market to no one. Click To Tweet

The key is to find groups that are full of your ideal customers and then to post content that is relevant to them. You can post your blog posts, YouTube videos, and even simply ask questions that target your customer’s pain points. Check out the video below to learn more on what kind of things you should post in Facebook groups to generate leads for your small business.

When do Facebook ads work?

So when do Facebook ads work? Well, in my opinion, having spent tens of thousands of dollars on the Facebook advertising platforms and helped small businesses in dozens of industries, targeting, messaging, and the right offer are the biggest reasons Facebook ads work.

Too many times I find people who advertise their business on Facebook to all the wrong people, their offer isn’t something people want, or their sales copy is all wrong. First, let’s dive into how to write good sales copy for your Facebook ads.

There is actually a simple 3-step process to writing ad copy that will convert for any small business.

1. Address a problem, goal, or pain point for your ideal customer
2. Share the benefits of your offer and how it is a solution to that problem, or way of achieving that goal
3. Include a call to action to drive traffic to your offer

With this 3 step Facebook Advertising strategy you can write effective ads that your ideal customers are likely to click on. If your advertisements don’t stand out from everyone else you’ll have a hard time getting any conversions.

The targeting you need for Facebook ads to work

Another reason why your Facebook advertising doesn’t work is that you are targeting the wrong people. You likely believe that everyone could benefit from your products and services, but not everyone will actually be in the market for them.

Your job is not to try and convince everyone that they need and should buy your products. Instead, find someone who has an issue you can solve through your products or services. When you target your Facebook advertising in this manner and follow the 3 step Facebook advertising strategy above, your conversions will increase.

Most people make the mistake of only relying on demographics and interests alone for targeting their Facebook ads. This can be a good starting point, but the real success comes from using custom audiences and building lookalike audiences.

The beauty of this Facebook advertising strategy is that you can target people who are much more likely to perform a given desired action. For example, if you have a business where you want people to request an estimate or quote from you, you can build an audience based around people who do that.

Another great audience to target is a lookalike audience based on your existing customers. If you are just starting out this might not be a list you can use, but over time as your customer base grows, you can tap into this powerful lookalike audience. We’ll cover more on building these audiences further into the post.

Start building custom audiences for Facebook advertising

The first thing you need to do to build some of these custom audiences is to install your Facebook pixel on your website. This article walks you through the setup process for installing a Facebook pixel.

Once you have the pixel installed on your website you can then create custom audiences for people who visit specific pages. This process is done through your Facebook ads manager.

Simply click on “audiences” in the ads manager than then click on “create audience” and then “custom audience”. 

Next, you will choose the “website” option.

Next, select “people who visited specific web pages” and then you simply enter the website you want to track visitors on and name your audience.

Now that you have this custom audience created you have the ability to create a lookalike audience from that custom audience. So if it is a behavior that you want to happen regularly, this could be a good audience to create a lookalike audience for Facebook advertising.

For example, in the custom audience above is based on a thank you page for a free estimate offer. If you run an ad on Facebook with the goal of generating free estimate leads for your business, using a lookalike audience of people who request free estimates can work extremely well.

Do Facebook ads work with the right offer?

With the right targeting in place by using lookalike audiences, and after knowing how to write your ads, the next step is to craft an irresistible offer. The basis of this offer needs to help solve your ideal client’s problems or help them reach a goal of theirs faster.

Also, your offer needs to be congruent with what you sell on the back end if you aren’t directly selling something in your Facebook ad. Often you’ll find that people may not be immediately ready to do business with you the first time they see your ad. For this reason, I typically recommend that you start by promoting some kind of lead magnet first, rather than going directly for the sale.

A lead magnet could be a free download, an ebook, a video series, checklist, PDF, and many other options as well. Again, you want to make this free offer something that your ideal customers really want. If you don’t have any ideas, at the very least you could offer a discount on your services. Offering a discount isn’t ideal, but it could at least help you generate some leads, and if you can convert those leads in a profitable manner, offering a discount may be reasonable.

Ideally, you offer some kind of free offer that doesn’t cost you money, but just sometimes. This lead magnet can also help to pre-qualify your leads. For example, you may offer a free coaching session or discovery call which requires a pre-call survey to be filled out. By using this strategy you could weed out the people who don’t qualify and still generate the lead by offering the call and survey after someone subscribes to your list.

If you’d like to use an ebook as a lead magnet to advertise your small business on Facebook, check out the video on how to create an ebook for free.

Use dynamic creative to find the Facebook ads that are worth it

One way to make sure your Facebook ads are worth it and to optimize them is with split testing or A/B testing. In the past, this was rather complicated and you would have to individually write and test many different versions of the ad. After that, you would have to test each ad and see how they perform against each other.

You can still do this manually if you want, or you can choose to use the dynamic creative feature within Facebook ads instead. This option gives you a little less control, but Facebook will use its vast amount of data to optimize your ads for you.

With dynamic creative you can use multiple different images, descriptions, ad copy, headlines, calls to action, and more, and Facebook with automatically swap them out as your ads run. Over time you can start to see what combinations work best and you can slowly remove underperforming options.

This will leave you with the best performing versions of each ad! Using the dynamic creative option is a great way to test multiple variables at once without having to get overly technical on your end, setting everything up.

One thing to understand is that even as you get better at running Facebook ads for your small business, you still never know how things will perform. Until you actually start running the ads, you won’t know for sure. If you have to test anyway, you might as well let Facebook do the hard work for you and use dynamic creative to test different ad copy and see what performs best!

Check out this video below to learn how to set up a Facebook ad step by step.

Setting your budget to make Facebook ads worth it

Another reason that many small business owners struggle with Facebook advertising is that they don’t set their ad spend budget appropriately. The great thing with running Facebook advertising for small businesses is that you don’t have to have a huge budget each month to start to see results.

For most businesses, I would recommend a starting ad spend budget of around $300-$500 a month. This will give you enough to start generating some leads and to get enough data to start measuring what is working and what isn’t.

Now if you are a home business owner and are promoting a network marketing business or affiliate marketing business, or some other kind of endeavor you may be able to get by with $150 a month. With Facebook advertising, you can start small and scale as you see results. However, the smaller your budget is the longer it is going to take to gather data to see if your ads are working or not.

Also, understand that advertising on Facebook is a process. You can have all the best intentions and ideas of what will convert, but until you try it you won’t know for sure. This means you need to be mentally prepared to lose some money in the beginning. This doesn’t mean that you can’t be profitable in the long run once you figure out what works, but just don’t go into advertising on Facebook like it is some kind of “get rich quick” thing.

If you can afford it, it often is a good idea to hire someone that knows what they are doing with Facebook ads as this can help you avoid having to spend hundreds if not thousands on going through your learning curve. Check out our Facebook advertising services here.

Are Facebook ads worth it? Find out by tracking your metrics

How long does it take for Facebook ads to work? Well, if you followed the steps outlined above you should be getting high-quality traffic and leads from your Facebook ads rather quickly.

Typically you can expect to see results coming from your advertising within a few days or sooner if they are set up correctly. How profitable your ads are, and answering the question of are Facebook ads worth it, comes down to what your analytics and tracking tell you.

Most people look for an immediate ROI on advertising and often that might not be the case. Certainly, you can start to generate traffic and leads quickly, but if you don’t have a fine-tuned follow up and sales process on the back end that won’t matter.

The two most important metrics to know are your average cost per lead and the average value per lead. The average value per lead is the average sale * conversion rate. If you know what the average value per lead is you can see if your average cost per lead is below that amount. If it is, you are profitable!

Now, something else to understand is you need to know your lifetime value per lead. Sometimes you sell products to a customer repeatedly so the first sale is just the beginning. Other times there is an ascension path customers typically follow to generate more revenue for your business. This means the lifetime value might be much higher than the first initial sale. With this in mind, a lead could be more profitable long-term. You may not break even at the cart, but in the long run your advertising is profitable.

Conclusion

Do Facebook ads work and are Facebook ads worth it? In my opinion, they most definitely are. With such a large worldwide user base on Facebook, most small businesses can reach their ideal customers with Facebook ads.

On top of that, running Facebook advertising for small businesses is a great way to get into advertising on a smaller budget as you scale. Plus, with the targeting features and ability to run retargeting ads, you can greatly increase conversions without increasing your ad spend.

Running Facebook ads does work, but it takes the right structure, ad copy, and targeting. Having a highly sought after offer that your ideal customers want, will also help you increase conversions.

Track your metrics and be sure to split test your ads. You can do this using dynamic creative to further improve your results with Facebook advertising. Follow the steps outlined in this post and you’ll be getting success with Facebook ads in no time!

Also, if you’d rather just have us do the techy Facebook advertising and digital marketing for your small business instead, check out our marketing packages.

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Mike MacDonald

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