Do Facebook Ads Work for Small Businesses?

Social media has become a daily part of our lives, so it’s no surprise more and more businesses are choosing to advertise on platforms such as Facebook, Instagram and Tik Tok. However, Facebook has proven to be one of the most effective advertising platforms on the internet! Facebook ads have become an increasingly popular marketing tool for businesses, both big and small.

Just ask yourself: How many times do I check Facebook each day? And how often do I see relevant advertisements in my feed? If you’re a Facebook user, you’re probably checking your feed at least once a day, and you’ll probably come across enticing product and service advertisements from your local area each time you scroll.  

Small businesses don’t typically have the luxury or cash flow to spend exuberant amounts of money on traditional advertising campaigns. This is why many small businesses opt to run Facebook ads – but the big question we hear is whether Facebook ads really get results. Our hands-on experience at My Online Guy gives us a clear answer, and there’s a lot of research backing it up.  

Facebook ads are a great promotional option for small businesses: they offer simple and cost-effective advertising options, using Facebook’s customer data and targeting methods to make the most of your investment. Facebook ads can generate both traffic and leads, with lots of data provided for your marketing KPIs. 

To find out if Facebook advertising is the right marketing strategy for your company, continue reading. We’ll cover all the benefits of Facebook ads for local businesses, and how to get the most out of your Facebook advertising campaign. 

Additionally, you can get in touch with the friendly team at My Online Guy for more specific information. 

Are Facebook Ads Worth It for Small Businesses in 2021? 

If you’ve ever considered employing Facebook ads for your business, you’ve probably asked yourself: Are Facebook ads a waste of money? This is a logical question, since you want to make sure you’re really getting bang for buck. But Facebook has actually proven to be one of the most efficient and cost-effective advertising methods in use right now

There are a few things that make Facebook so great for small business advertising. 

In 2021, we are inundated with advertising everywhere we look. For this reason, a lot of clients and customers will feel irritated when they come across ads on TV, radio, or YouTube. These advertisements disrupt what you are doing and force you to view them, so you’re making your pitch to an already annoyed customer. 

Put simply, this ‘interruption marketing’ tactic used in traditional advertising is dying out. Consumers will use ad blocking software, hover over the skip button or record their favourite shows to fast forward straight through the commercials. 

The beauty of Facebook advertising is that the ads are subtle and flow with users’ regular newsfeeds. This allows your business to organically connect with people interested in your business, and a less intrusive approach is more likely to provide you with satisfied customers. Not to mention that in 2021, billions of people use Facebook every single day – and it’s far more cost effective to reach them than printing flyers or filming a TV ad.

When Facebook ads are done correctly, they can be amazing at generating leads and raking in new customers for small businesses. Facebook can be a gamechanger in allowing your business to connect with the demographic of people who will actually be interested in your product or service. Advertising for a small business is all about reaching the most relevant (and profitable) customer base and bringing in maximum return on your marketing investment. 

Where traditional advertising casts a very wide net – meaning a large percentage of the cost is wasted on people who will never become clients – Facebook ads minimise wasteful ad spend and hone in on profitable markets. If you want your advertising to feel less like a gamble and more like an investment in your business, Facebook advertising is the strategy you want to consider. 

We’ve confirmed Facebook ads are worth a spot in your marketing arsenal – but what kind of results can you expect for a local business? Let’s dive in and find out.

Do Facebook Ads Work for Local Businesses? 

How often do you come across Facebook advertisements for small businesses in your region when scrolling through your feed? Personally, we’ve found some of our favourite local cafes, restaurants and stores through Facebook ads and sponsored posts. 

Facebook ads actually provide a range of tools that directly benefit small, local businesses. Facebook may be a global phenomenon, but it has effective campaign customisation options that allow you to target specific and niche audiences. So don’t disregard Facebook advertising for your local business.

The greatest benefit of Facebook advertising is its ability to directly target people in your geographical area. Facebook’s target features allow you to advertise your products and services to local customers, putting your business on your region’s map (and on the radar of prospective clients). Such locally directed advertisements will enable you to increase your in-store traffic and local sales, as long as your campaign is set up correctly. 

Without Facebook, we never would have discovered some of the best local shops and services around here. If an ad appears on a local’s newsfeed that piques their interest, there’s a good chance they’ll do something about it. Whether it’s a photo of a mouth-watering burger they’d love to try, or a local plumber’s ad appearing when they’ve been meaning to get their dripping taps fixed, it’s easy for a potential customer to click through and find out more on the spot.

There are three keys to effectively using Facebook ads to advertise your local business. 

Firstly, build your online presence. This means jazzing up your website and being consistent across your social media platforms.

Next, make sure your business is on the map. This means updating your address, contact information and business hours on all of your pages and ideally on Google too. 

Finally, utilise Facebook’s advertising options directed at local businesses by using the ‘Promote Your Business Locally’ ad tool. 

Facebook ads offer detailed targeting options that will optimise and refine who your local business will advertise to, so you can strive for the best conversion rates. Obviously, we want to start with location. Facebook allows you to choose a location by city, postcode or even radius. You can then further refine your audience by demographics, gender and interests. 

Benefits of Facebook Ads for Small Businesses 

If you’ve been thinking about trying Facebook ads, you’ll probably want to know what benefits this marketing channel has to offer. Well, you’ve come to the right place. Listed below are the benefits you will enjoy when your small business uses Facebook ads.

  • Micro-targeting of your audience

Facebook offers excellent micro-targeting options to allow you to directly reach your ideal audience. This is possible because Facebook is data-rich, meaning they have plenty of stored data from their users that you can use to benefit your advertising efforts. Your small business can narrow down its target market based on gender, age, location, education, interests, recent purchases and more! 

  • Build brand awareness & community 

With so many people using social media daily, Facebook ads are a perfect way to build awareness of your brand. By advertising to your local community (or an even broader audience), you can effortlessly spread information about your brand. Even better, you can conveniently stay engaged with your brand’s community once interested locals ‘like’ your page.

  • Set your own budget

    Another fantastic element of Facebook advertising is the ability to set your own budget. This means you can set a daily or lifetime budget for your advertising campaigns and change it at any time. You stay in control of your spend the whole time.
  • Cheaper than traditional marketing

    Facebook ads are a much cheaper option than traditional media advertising. The low cost of Facebook advertising and its broad audience reach is one of the most significant benefits for small businesses. Compared to other channels of advertising, you can expect a higher return on investment and lower cost per conversion.
  • Choose your own objective

    Facebook ads are also great because they are customisable based on your needs. This means you can create ads based on your small business’ exact goals and objectives. You may be aiming for likes, website traffic, walk-ins, phone calls, customer data, or ecommerce sales –  whatever you’re aiming for, Facebook has settings designed to achieve it. The result of this is an ad that streamlines your marketing goals and appeals to your target audience.
  • Access to a large audience

    1.9 billion people use Facebook every day – can you imagine what percentage of your target market are scrolling through Facebook right now? With so many generations now actively using social media, advertising there is no longer just for youth-focused brands. 
  • Access to in-depth data

    Ads work best when you can analyse them and measure your growth, and Facebook’s Ad Manager allows you to do just that. Facebook’s ad tools enable you to measure how your ads perform, break down who views them and compare and test alternative campaigning options to optimise your ads. Another big benefit is Facebook’s ability to forecast results and predict your reach.
  • Gets results quickly

    If your Facebook ads are set up effectively, they can produce almost immediate results. This is because your ads can reach a significant volume of people straight away, which can potentially turn into conversions for your business. You’ll still want to optimise your ads over time, but it doesn’t take long to start seeing a difference.
  • Can drive repeat business

    Facebook is also a valuable marketing tool for small businesses since it can encourage repeat purchases. You can even retarget customers who have visited your Facebook page or website but haven’t made a purchase yet, reminding them about your product or service. Facebook also allows you to import past clients’ email addresses into your ad campaign, using their demographic data to target similar customers. 
  • Easily promote offers and discounts

    Facebook ads are the ideal platform for announcing promos and offers – reaching a much wider audience than your existing followers. The best way to engage new customers is to reel them in with an exciting promotion or discount. Whether you are trying to attract people to your website or into your store, you can use Facebook ads to share sales or special offers that will appeal to them.  

How Many Small Businesses Use Facebook Ads? 

In Australia, 37% of small-to-medium businesses used paid advertising tools on social media in 2020 – and 83% of these chose Facebook as their platform. 

With 16 million active Australian users on Facebook, these small businesses are reaching an enormous proportion of Australians: recent data shows 77.7% of Aussies between 16 and 64 use Facebook, with 1 in 2 spending time on Facebook daily. 

Alternative platforms such as Instagram, Twitter and LinkedIn are also used by small businesses, but do not compare to the rates of Facebook ad use. Twitter, Snapchat and other platforms (such as TikTok) were used by a much smaller percentage of SMEs. 

How Much Should A Small Business Spend on Facebook Ads?

One of the most appealing aspects of Facebook ads is that your budget is totally customisable. Of course, much like any promotional method, the more you spend, the better your return will tend to be. However, the beauty of Facebook ads is that you can start using them no matter your budget.

With Facebook ads, you can decide how much your small business should spend on Facebook ads and only pay for the actions you want. Facebook’s job is to get you the best results possible for the amount you choose to spend. You can spend $5 a day or $50,000 a week, depending on what your small business can afford.

The 2020 Yellow Social Media Report found that small-to medium-businesses spent an average of $3,044 on social media marketing in 2020. This equals $250 a month, which is considered quite a conservative amount. This average would include businesses who only occasionally use Facebook ads or only choose to run them at certain times of year.

More importantly, it’s unclear how successful those businesses were in their advertising efforts. It’s incredibly important to create your ad budget based on your individual needs – but there are also some minimum standards for highly effective Facebook ad spend. 

Simply put, when it comes to Facebook ads a greater spend = a greater return. 

The higher your spending output, the greater your return will be, and the better value you get out of Facebook ads. You should not expect to get the same ROI (return on investment) from a $100 weekly budget compared with a $1500 weekly input. A higher spend gives you a broader pool of prospective leads and more opportunity to optimise the settings – in other words, your ad campaign gets more cost-effective at scale. 

Trial and error is often the best way to discover how much you need to spend on your Facebook ads as a small business. You may choose to start as low as $10 a day and keep increasing your budget until you find an amount that is serving you the best results and returns. You’ll typically find the more you continue to grow the budget, conversions and leads you will generate.

Here at My Online Guy, we usually recommend our clients budget at least $500-$1000 a month for their Facebook ads to ensure they get the best return and enough analytics data to optimise the campaign over time. However, this number can differ dramatically depending on the size of your business, your desired return and your advertising budget. This is an estimate that suits many of our clients running consistent, long term and highly effective Facebook advertising campaigns

The principle with social media marketing is that profit is more important than cost. If your return on ad spend is extremely generous, then every cent you put into that Facebook ad campaign is incredibly productive for your business. 

The beauty of working with a social media marketing team is that we can figure out the best budget for your small business Facebook ads. At My Online Guy, we can work with you and your preferred budget, and give you honest advice on where you’ll get the best returns. Working with an expert can also ensure your campaign is set up properly and your spending is focused in the right places.

What Type of Ads Are Most Effective on Facebook?

There are a wide range of ad types you can use to advertise your small business on Facebook. However, the kind of ad that will be most effective depends on your business and the goal of your advertising campaign. 

Here are the five most popular Facebook ad types for small businesses: 

  1. Page Like Ads

    As the name suggests, these ads are aimed at boosting the number of likes on your page. These ads include a visible option to immediately like your page upon viewing the ad. These advertisements usually have an enticing and interesting visual and a strong call to action.
  2. Boosted Post Ads

    These advertisements are the kind that appear like an ordinary Facebook post in a reader’s newsfeed. The only giveaway that it is an advertisement is the ‘sponsored’ note at the top of the ad. These ads are most effective when they contain interesting visuals that will encourage readers to stop scrolling and click on your post.
  3. Lead Ads

    This type of ad is used to gather your audience’s contact information for future campaigns and promotions. The ads will include a form that encourages users to leave their name and email address – this may be to sign up for an offer, enter a giveaway, or just to stay in the loop for future promotions. This is an ideal way to gather customer data for your small business.
  4. Website Visitors Ads

    These types of ads aim to promote your business website and increase its traffic. These posts can either send people to particular product or service pages on your website, blog posts or landing pages. You’ll typically need an enticing offer or promotion to encourage people to leave Facebook and check out your website.
  5. Offer Ads

    These ads do just what they say. Perfect for both online and brick and mortar stores, these advertisements allow you to promote an offer and give customers an opportunity to redeem them. These ads are effective in bringing in new customers as well as encouraging existing customers to return. 

Choosing which of these Facebook advertisements will work best for your small business can be tricky. Be sure to think about the intent of your marketing campaign and what results you are hoping to achieve. 

The best advertising choices will be individual to each business, and this remains true for Facebook ads. The biggest piece of advice we can give is to keep your Facebook ad strategy in line with an overall marketing plan for your business.

Don’t forget, if making these decisions is out of your comfort zone, the team at My Online Guy can help get you started. 

Is Facebook Ads the Best Way to Advertise a Small Business? 

Facebook ads are undoubtedly one of the best ways to promote a small business. However, while Facebook ads are an excellent tool for so many businesses, that doesn’t mean they’re perfect for all scenarios. 

If you know your target audience isn’t using Facebook, then obviously, this won’t be a good platform to focus your advertising efforts. You’ll need to make sure whatever your business is providing will be of interest to Facebook users. However, don’t be too quick to assume your customers aren’t on Facebook – there are over 4 million Aussies over 55 years old on Facebook. 

Facebook ads are ideal for advertising products or services that can be purchased by impulse decisions. This means high priced products or professional services don’t always perform well on Facebook, as these decisions usually require more in-depth research and thought. 

Even for these higher-priced products and services, Facebook ads can still be used to gather customer details, gain ‘likes’ or bring your business to the customer’s awareness. They may not purchase on the spot, but it can still be used to support your long-term marketing strategy. 

If you can’t provide a hook or offer that will entice your audience, Facebook ads may not be your best option either. You will need to include something captivating and tempting to draw your audience in and generate leads via Facebook. That may be a special offer, a great-looking photo or a unique and interesting product. 

The performance of Facebook ads also differs dramatically between industries. Some of the industries that perform best with Facebook ads include:

  • Retail
  • Apparel
  • Fitness
  • Beauty
  • Technology
  • Travel & Hospitality
  • Real Estate 

Don’t forget, Facebook isn’t the only place to advertise your small business. If your business doesn’t meet the ideal mould for Facebook marketing, there are still plenty of other options out there.  

Facebook Ad Tips for Small Businesses 

If you’re looking for the best tips and tricks for nailing your Facebook advertising campaign, then don’t skim this next section. We’ve gathered our marketing team’s favourite tips on optimising Facebook ads for a small business and compiled them into a handy list!

Check out our top tips for effective Facebook ads:

  • Have a hook – You need to know how to capture your audience.
  • Don’t skimp on content quality! Good quality video and imaging is always worth it. Make it striking.
  • Short 10 second videos work as a great visual.
  • Keep it simple. Remove any potential barriers that will stand in the way of people completing a purchase. You should be able to capture your reader in a minimum of three clicks.
  • Keep it engaging. Remember, you need to have a reason to make people stop scrolling.
  • Promotions and offers are your friends. A sneaky discount or irresistible promotion is the best way to get your readers to follow a link.
  • Interaction is essential. Facebook can’t do all the work, so make sure you respond and interact with any engagement on your ads.
  • Always double check technicalities and linking.
  • Keep up to date with the data and analysis of your ads. You don’t want to waste your time and money running ads that aren’t proving a return.
  • Make sure Facebook ads complement your overall marketing strategy.
  • Don’t stick to the baseline settings. Make sure you individualise your advertisements to suit your business and audience.
  • Don’t give up. Facebook ads take a significant amount of trial and error to get rolling. Make sure you’re giving your advertisements time to work.
  • When in doubt, don’t be afraid to ask for help. The MOG team is always available to help you implement and understand Facebook ads for your small business. 

Related Questions 

What Are Facebook Ads Good For?

Facebook ads are good for three main things: building community engagement and brand awareness, lead generation and data collection, and generating genuine conversions through special promotions. Small businesses can use these features and benefits to maximise their return on ad spend. 

Is It Free to Advertise on Facebook? 

Unfortunately, it is not free to run Facebook ads. However, you can customise your Facebook ad budget: this can be as little as $5 a day or as much as $50 a day. However, posting on your Facebook page IS free. While your ads are optimised to get results, you can post and share content and personal advertisements for free on your Facebook business page.

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