Facebook Ads have emerged as a popular and cost-effective way to promote a small business online. According to recent research from MerchantCircle, 22% of small businesses have used Facebook Ads, and 65% say they would use Facebook Ads again, citing ease and flexibility as the top reasons to run another campaign. But not everyone enjoys success with Facebook Ads — among the one-third of users who say they wouldn’t run another campaign, nearly 70% say that it didn’t work to acquire new customers.

With this in mind, here are five tips to ensure you’re set up for success with Facebook Ads:

1. Set Goals and Plan Your Approach Accordingly

The first step is understanding what you want to achieve with your ad. Are you looking to building awareness for your company, drive traffic to your web site, promote a specific event or generate sales?

Facebook offers a number of different ad options that work to achieve different objectives. If you’re looking to build awareness and grow your fan base, you might want to start with standard marketplace ads. These ads point to your Facebook Page and allow users to “like” your page directly within the ad unit. If you already have a sizable fan base, you might also try a “Page Like” sponsored story, in which the ad shows friends who have liked your Page.

“Targeting with Facebook Ads allows you to advertise to the right people based on their real interests. You can even target people who are friends with people who already “like” your Page. This social context will show up around the ad,” says Grady Burnett, VP of global marketing solutions at Facebook. “A study from Nielsen shows that on average, people are 68% more likely to remember seeing an ad with social context than without, twice as likely to remember the ad’s message and four times as likely to purchase.”

When you want to promote a particular post from your page, such as a special offer or important news, you can also use “Page Post” sponsored stories to convert your post into a News Feed item.

But this approach isn’t limited to your own posts; Burnett also notes that “you can use Sponsored Stories — Facebook’s newest marketing tool — to help surface the word-of-mouth recommendations about your business that are already happening in the News Feed. For example, you can sponsor stories about people checking in to your business or “liking” your Page.”

Whatever your goals and approach, make sure that you are set up to measure success. While click-through rate (CTR) is an important metric to track, it’s not the only one, and according to Webtrends, the average CTR for Facebook ads is only about 0.05%, which is half the industry standard of 0.1%. Clint Fralick, VP of client services at social media agency Pandemic Labs, recommends that you aim instead for increases in comments, Likes, impressions and active users.

“If you pick up 500 new fans, but all those other numbers stay the same, you haven’t gotten them engaged — and you probably won’t make any money off them,” says Fralick.

2. Get Creative with Targeting

The Facebook ad interface makes it very easy to select the demographic profile of an audience you want to target, including age, sex, location, education level and interests, but it is also unique in its ability to micro-target very specific audiences.

Sheila Hibbard, founder of small business marketing firm The Marketing Bit, notes that while most advertisers come to Facebook with the traditional advertising mindset that says “more is better,” that isn’t the case with Facebook.

“It’s better to have a couple thousand very targeted people than tens of thousands of disinterested folks,” says Hibbard. She suggests that you zero in on a very specific target audience with your ads, even if it means reducing the size of your audience. For example, if you’re using Facebook Ads to promote an event or a seasonal sale, you might want to only target your existing fans, who may be more likely to respond to an immediate offer.

When targeting local audiences, Fralick also recommends that you look beyond self-reported location and “use every possible angle to find those locals,” since not everyone lists their city in their profiles. “Put the names of popular local businesses, colleges and clubs into the ad manager to find the people that city and zip code doesn’t,” Fralick says.

Another creative idea is to develop and target birthday ads, says Anthony Nitz, founder of Facebook marketing firm PageonFacebook.com.

“One of the most fun targeting methods is sending an ad that shows up the week before your fan’s birthday,” says Nitz. “I tell business owners to create an ad that links to video of them wearing a birthday hat or throwing confetti while delivering a birthday message, or their staff singing ‘Happy Birthday’ that ends with a special offer and a link to where they can download their special birthday-only coupon. I can assure you that when someone sees an ad in their sidebar that says ‘Happy Birthday,’ and they click on it and the guy from the local deli is singing Happy Birthday to them, it gets huge mileage.”

3. Choose Text and Images That Pop

When designing your ad, Facebook recommends that you write clear, targeted ads with concise text that speaks directly to the audience you will reach. Be sure to highlight any special offers or unique features that differentiate you from the competition. If your goal is brand and company name recognition, Facebook also suggests using your company name in the ad title or somewhere in the body of the ad.

While your ad can include up to 135 characters, Ben Nesvig of Fuzed Marketing cautions businesses “not to feel like you have to fill the entire ad. Sometimes a simple line does the trick.” For example, some experts recommend asking a question or making a bold statement rather than touting your features.

Either way, remember to include a call-to-action that encourages users to click on your ad and explains to the user exactly what you expect them to do when they reach your landing page.

The pictures you choose for your ad are also critical, since this is what will catch people’s eye, and you should think beyond your logo.

“Typically the best photos for conversion are close face shots of people — smiling women tend to generate a high click rate,” says Harley Rivet of Deep Dish Digital. Rivet recommends that you avoid typical stock photos and instead try use more natural photos with colors that contrast with the blue color scheme of Facebook, such as red, yellow and orange.

4. Create and Test Multiple Ads

“One of the biggest mistakes I see business owners making is creating and running only one ad within each campaign,” says Caroline Melberg, founder of Small Business Mavericks. “Even the smallest change in the words you choose or the graphic you use can have a large impact on the click-through rate for your ad, so it’s best to create multiple versions of your ad and test them to see which ad gets the best response.”

Facebook makes this process easy: Once an ad has been created, you have the option to “Create a Similar Ad” and simply swap in a new picture or text.

Melberg suggests creating four different ads for the same campaign, running them for a day or so and then viewing your ad statistics on Facebook to discover which ad performed the best. You can then create a new ad that is similar to your best-performing ad, but tweak it just a bit to see if you can beat the previous performance.

And, don’t forget to swap out ads after a short period to reduce fatigue. According to WebTrends, social ads have a very short shelf life, with interest waning after three to five days.

5. Be Ready To Capitalize on the Traffic

According to Nesvig, a common mistake small businesses make with Facebook Ads is focusing on their ad while neglecting fresh content on their Facebook Page. “They might spend a $100 on ads, but the last update on their fan page was a month ago,” says Nesvig.

Fralick agrees. “Your ads are only as good as your Wall. Remember that most people don’t click through to your Facebook page; they click ‘like’ right in the ad. Have status updates or special offers planned that follow up on the messages in your ads, and get people to connect more than once.”

In fact, Fralick urges clients to think of a click as the beginning of the campaign, not the end. “When someone likes your page, they’re giving you permission to talk to them over and over again,” says Fralick. “That’s just as valuable as an outright sale.”

Have you run ads on Facebook? What was your experience? Please share your thoughts in the comments below.

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