Facebook Ads: Are They A Good Fit For My Business?

How much do Facebook ads cost? Should I be advertising my business on Facebook? Is it a better option than other online marketing options?

If you’ve been asking yourself these questions, you’re not alone.

A recent survey of over 2600 small business owners found that 62% of them believe that Facebook ads are ineffective. The primary reason cited was a very low (or zero) return on investment (ROI), and these respondents said they would not use Facebook advertising again.

Facebook Ads have grown in popularity as businesses have sought to capitalize on the cheaper cost per click (CPC) compared to other online pay per click options. Facebook promises a big user base, engagement on the platform, scalability, and ability to target a specific audience with custom ads.

But with this opportunity and choice, it can be difficult for businesses to advertise on Facebook in a way that generates more profit than it costs. If you’re thinking about advertising your products or services on Facebook, there are a couple of questions that you need to answer in order to determine whether it’s a good fit for your business.

What is your expected return on ad spend?

Many businesses do not take the time to work out whether their Facebook ads are actually making them money or not. The CPC of Facebook ads is cheaper than most online advertising platforms, but it’s important to focus on the ROI rather than the CPC when deciding if Facebook is the right platform to advertise your business.

The CPC on an average Facebook ad costs $0.97 according to Adespresso’s quarterly report. This varies from business to business and will depend on your target market, country, industry that you operate in, and the way that you set up your ads.

But the CPC is not the only number that you need to be looking at. Your site will need to have analytics set up to track whether these clicks turn into conversions and whether the conversions turn into sales. Because, regardless of how cheap ad clicks are, if they don’t produce profitable revenue for your business, then you’re wasting your money because profit matters more than cost when it comes to online marketing. The one exception to this is if you are primarily looking to drive brand awareness, in which case the cheap ad clicks or impressions will work in your favour.

Based on figures from Wordstream, businesses that target end consumers (B2C) should expect a CPC of $0.90 for clicks from the right type of customers, whereas B2B clicks cost around $3.00. Then looking at conversion rates on a typical site (usually around 3% for B2C and 1% for B2B), makes your cost-per-conversion $30 for B2C and $300 for B2B.

These figures are just averages, but they will make it much easier to decide whether Facebook ads are a good fit for your business – if $30 or $300 per conversion is a great price for you, then it’s worth looking into further! If not, perhaps your marketing budget is best allocated elsewhere. In any case, consider measuring Return On Ad Spend (ROAS) rather than solely measuring the cost for traffic to your site via clicks.

Are you willing to spend a bit of time learning the basics?

Whether you hire a Facebook Ads professional or want to run ads yourself, there is a lot of value in taking time to learn the basics of the platform such as how to create appealing images, setting up multiple ad sets, understanding ad formats, and learning how to structure ads.

Most businesses only use the simplest criteria when choosing their target market for ad campaigns, usually defining only gender, age, and income level. They neglect niche down further and incorporate information such as insights on the unique behaviours and interests of their target market. Defining the perfect audience can reduce the CPC and have a big impact on your conversion rate.

More advanced techniques such as setting up retargeting, custom audiences and look-alike audiences can dramatically reduce your CPC, and will ensure that you’re getting the right eyeballs on your ads. This specialist targeting requires an in-depth knowledge of how the platform works and it may be more efficient to enlist the help of a Facebook Ads specialist.

Some good questions to ask when determining your perfect audience include:

  • Who is the perfect demographic for your business or offer? (Such as gender, age, location, education level, income, and marital status).
  • Who are thought leaders in your niche that your target market might follow?
  • What Facebook pages are liked by your target market?
  • What Facebook groups would your perfect customer belong to?

Are you committed to testing and refining your ads?

It is easy to become discouraged when you don’t see the results that you’re looking for immediately, but it takes time to find the perfect ad copy and visuals, as well as the right combination of information for your target audience.

Testing and refining your ads is where you get some of your biggest wins, the conversion rates of different ads and different ads sets vary quite a bit, and continuous improvements will ensure that you maximize your return on your ad spend.

Split testing is an important way to determine what your perfect target market is. Rather than combining your chosen demographics with a list of every interest and behaviour that might be relevant; set the criteria for one or two behaviours or interests each time. By combining too many variables, you won’t be able to see which audiences are converting well and this will lead to spending money on audiences that are not a good match.

But all of this takes time and money as you split test and refine your ads. When you work out your ROI on your ads campaigns, this additional effort needs to be taken into account.

Is your website optimized for Facebook traffic?

There’s no point spending money on ads that drive people to your website if your website isn’t optimized for that traffic. Consider creating a custom landing page for with a special offer specifically for visitors from Facebook and ensure that you have a visitor flow in place to drive leads further down the funnel.

When calculating whether your Facebook ads have been successful, you need to factor in the costs of building a funnel and landing pages, as well as split testing to determine whether the ads have been successful or not.

Advertising on Facebook isn’t about cost; it’s about profitability – tracking the cost per conversion, rather than focusing on cheap clicks.

Before you even get started, you will need to do some training on Facebook Ads to ensure that you are able to use some of the more advanced functionality that will bring down the cost of your ads and ensure that you are targeting your perfect customer.

Facebook Ads can be a great source of new customers for your business, but the process of setting up an ad campaign that has a positive ROI is not as simple as it is made out to be and there are a number of costs that need to be factored in.

For a campaign to be successful, you need to have a clear idea of what your ROI needs to be, and then you need to have analytics in place to ensure that your cost per conversion is lower than the profit that you make on each sale.

You will also need to make allowance for split testing various ad sets (both graphics and copy) and target audiences on Facebook, as well as optimizing your website for traffic from your Facebook Ad campaign.