How Do Facebook Ads Work?

How do Facebook Ads work?

Before getting down to the nitty-gritty and delving deep into the format of Facebook ads, we’re going to give you a quick overview of Facebook advertising, before answering your burning question – How do Facebook ads work?

In a nutshell, Facebook advertising is a form of online advertising through social media, specifically, Facebook and Instagram. Businesses, both large and small, use Facebook to advertise their brand for a variety of purposes:

1. Increase brand awareness: Helping businesses extend their reach to a wider audience – most often a targeted audience which defines a businesses’ ideal customer persona. By focusing on a specific audience, this helps increase the chances of people recalling their ads.

2. Boost sales: If you’re looking for more conversions, you can use Facebook advertising to drive traffic to your website with the aim of getting them to convert, whether that be to purchase, fill in a contact form, or visit your store.

3. Retargeting: Target people who have already visited your website/engaged with your brand, but haven’t yet converted. This method helps bring all of your website visitors back onto your website in the hope of getting them to convert.

Now you’ve got a clearer idea of Facebook advertising and how businesses use them, let’s get onto the bulk of this blog post – How do Facebook ads work?

 

What makes up a Facebook Ad?

 

1) Campaign objective:

This is the first step when it comes to creating a Facebook ad. Here, you decide what you want the objective of your ad to be. As you can see, Facebook offers a range of options. (please see image above)

How do Facebook ads work? - Campaign objective

 

2) Campaign budget and strategy:

Next, you’ll need to decide how much you’re willing to spend on your ad. You have 2 options. You can either select a daily budget or a lifetime budget. You will also need to select a ‘bid strategy’. This tells Facebook how much you’re willing to bid for your ad to be shown when up against other competitors in the ad auctions.

How do Facebook ads work? - Ad budget

 

3) Scheduling:

Arrange a start/end date and time for your ad.

Ad budget and scheduling

 

4) Choose your audience:

Select what audience you’d like to target. Here you choose the location, age & gender of your audience. 

If you want to get more specific, can use the ‘detailed targeting expansion’ tool that helps you create a more defined audience such as their interests and behaviours. 

How do Facebook ads work? - Audience

 

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5) Choose your ad placement:

You have two options. You can either tick the ‘Automatic placements’ option, which means Facebook will decide the best places to show your ad in order to help you achieve the best results. Or, you can select ‘Manual placements’ and get the option to manually choose where you want to display your ad.

How do Facebook ads work? - Ad placement

 

6) Set up your ad creative:

This is the fun part! Design and put together the imagery/video and copy that you’d like to use and select the URL of the web page that you would like your audience to be directed to.

Facebook ad creative

 

How much do Facebook Ads cost?

Some businesses spend as little as £5 a week, and other businesses spend £40,000 a week! There really is no set budget for Facebook advertising. It all depends on the size of your business and your monthly marketing budget. 

The basics of Facebook ad costs are simple. The two best ways to help define your costs are:

  • Overall amount spent
  • Cost per result 

You control your ad spend through your budget. To help ensure that you don’t spend more than your desired budget you can do the following:

 

How does Facebook decide what ads to show?

The Facebook ad algorithm (the ad auction) is what determines whether or not your Facebook ads provide a good user experience and is relevant to the user.

The auction is what controls the ordering of ads. Here’s an overview of how the ad auction works:

  • Let’s say you set up a Facebook ad and choose to target females between the age of 20-25 who are living in London and are interested in fitness.
  • As you probably might expect, this one person can also fall into other multiple target audiences (selected by other businesses). This means that thousands of other businesses may also be targeting the same type of person, and therefore all businesses who have selected this audience will have to compete in an auction to get their ad shown first.

The winner of an ad auction is determined by the highest total value. This is a combination of three things:

  1. The bid: What an advertiser is willing to pay to reach their objective.
  2. Action rates: The likelihood that someone will click your ad and lead to your desired outcome.
  3. Quality of your ad: Low-quality attributes will be taken into consideration such as language, engagement bate (intentionally influencing people to like, post and share your post to boost organic reach) and feedback from people viewing the ad will also be monitored.

The main thing to take away from this is that a more relevant ad could win in an auction against an ad that has a higher bid. So, in essence, the more relevant your ads, the more chance you have of achieving better results. 

 

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Testing your Facebook Ads

Once your Facebook ads are live, you then need to start thinking about what tests you’re going to run, more importantly, what variables you want to put to the test.

Facebook ads require a lot of testing. It’s not as easy and setting up your ads and letting them run for months and expecting them to create results. Without any refining or tweaking, you will never improve and therefore you won’t get the results that you want.

You need to be consistently looking at your ads, checking your results and seeing what you can improve.

Here is a list of variables that you can test:

  • Audiences
  • Ad copy
  • Ad imagery
  • Ad placement
  • CTA
  • Attribution windows
  • Optimisation for ad delivery (Link clicks & Landing page views)

It’s also worth noting that testing your ads takes time. Some tests will need to run for a couple of weeks in order for you to be able to collect enough data to analyse and understand what was successful.

 

We can help

We hope this blog post has answered your question – how do Facebook ads work? And has given you a clearer understanding of the system surrounding Facebook advertising.

Here at Fresh Pies our Facebook advertising services help businesses to create incredibly detailed ads and target the right people at the right time. We use Facebook pixels to collect data from website users which gives us the ability to see the actions people are taking on your website.

From here, we can use this data to put together retargeting ads, create look alike and custom audiences, as well as optimising your ads for value and conversions.

If you’d like to find out more about our Facebook advertising services, you can head over to our online contact form, or give us a call on 0207 112 9117.