How does Facebook Advertising work?

Jul 10, 2021
Reading Time: 8minutes

Gone are the days where businesses could reach most of their followers and new potential customers through Facebook organic reach. With 1.56 billion daily active users, anyone with a product or service to sell cannot miss out on the advertising opportunities offered by this gigantic social platform. 

So, let’s enter the world of Facebook Ads.

Post Summary

  • Actionable tips learned by Facebook Ad specialists
  • Mistakes to avoid
  • How to reach your Facebook Advertising goals

When discussing Facebook advertising, we need to go beyond the visual and the copy, that make up the ad creative, and consider the following aspects:

  • Targeting– who do you want to display your ads to? Who are your target audiences?
  • Placement– where in Facebook do you want your ads to appear? There are several options besides the news feed (e.g. right-hand column, marketplace, Audience Network, Messenger Inbox.)
  • Bidding– how big is your budget to pay for your target audience to see your ads and take the desired action?
  • Budget– the overall amount you wish to spend on your campaign
  • Ads schedule– do you want your ads to run within a specific schedule, or ongoing? 

Before getting into the nitty-gritty and setting up your campaigns on Ads Manager, you need to understand your ultimate Facebook marketing objectives. Once you have defined these for yourself, it is a lot easier to decide WHICH messages to show WHOM and at WHAT TIME.

Now, let’s begin and examine the key features of this powerful advertising tool. 


Several experts suggest that Facebook Ads act purely as a tool to generate demand and spark interest. Generally, we don’t check Facebook with the same intention as browsing on Amazon, eBay or other similar sites. We probably go to the latter with a clear intention to buy or at least find out more information about a specific product that we already have in mind. 

We scroll through our Facebook newsfeed to keep up with what’s being shared by our friends, acquaintances, groups and so on. 

Makes sense. 

Thus, making the right targeting strategy on Facebook is crucial, as you do not want to waste your advertising budget on showing your carefully crafted ads to the wrong target groups. Here is where many marketers make the mistake of optimising for brand awareness, but we will return to this subject later on when we examine more closely at bidding strategies.

Concerning targeting, possibilities on Facebook are pretty unrivaled. You have the option to narrow down your audience based on demographic variables, including: 

  • age
  • location
  • gender
  • spoken languages
  • relationship status  

You can even choose your advertising audiences based on their level of education, field of profession, and occasion-based information like: 

  • birthday month
  • expecting parents
  • engaged for 1 year
  • expats, and many more. 

If these kinds of metrics are relevant to you, really drill down into the available options and utilise them.

You can also choose to target people based on their interests and behaviours

For this, perhaps it would be useful to think of Facebook as a vast global shopping centre with thousands of shops, restaurants, cafes, art galleries, cinemas, beauty salons and even music venues – in fact, this shopping centre has pretty much every facility that you can imagine. 

Now consider people spending time in that shopping centre, leaving a trail of crumbs in every facility that they spend their time in. After some time, these trails can give us a pretty solid idea about their interests, habits and preferences. These insights are comparable to the interest and behaviour based targeting options on Facebook Ads that are there to help advertisers target relevant groups of people. 

The options here are nearly infinite – you can target people who are into jogging, a specific type of yoga, Game of Thrones fans, vegetarians, craft beer lovers, motorbike geeks – you name it! 

Tip: When browsing interests/behaviours under the Detailed targeting section on Facebook Ads, notice that there are broader (e.g. shopping, films) and narrower (e.g. Thai cuisine) categories of interests. The general advice given by many social media marketing experts is that you should avoid the former, since it may cost more and deliver fewer results. In my personal experience, broad category interest targeting has brought better results, and I would encourage you to at least try and test if this strategy is suitable for your particular goals.

In addition to demographic and interest-based targeting, you can choose to target people who already Like or Follow your Facebook Page or use your App. To benefit from these options, you need to install the Facebook Pixel on your website.

Image source: Facebook Ads Manager

Tip: Facebook Ads manager also provides the option to create 1-day, 30-day and even 180-day audiences from people who have visited specific pages on your website (e.g. landing pages, Thank You pages). If you are beginning with promoting your business, begin by targeting more recent audiences (e.g. 1 – 30 days) since these are the people who have engaged with your ad more recently, and therefore probably still have it fresh in their minds.

If you have lists of your customers’ e-mail addresses or phone numbers, you can upload these on to Facebook Ads Manager. The system will then attempt to find and target the users whose contacts you have uploaded (given that the users have used the same details to sign up to Facebook). 

Moreover, Facebook Ads Manager also provides the option to create lookalike audiences with similar interests and habits to people on your customer list. You have the opportunity to create lookalike audiences that are 1% – 10% similar to your customers. Generally, I would recommend sticking with 1% to say maximum 5% lookalike audiences, since these are the people who have the most in common with your existing customers. Many Facebook Ads specialists even advise against using wider than 1% lookalikes; however, this varies from business to business, so once again – experiment with different sized audiences and determine what generates the best results for you.

Image source: Facebook Ads Manager

Tip: Don’t create lookalike audiences based on people who Like your page, or who have engaged with your posts – these are not reliable seed audiences. Plus, if you target audiences in several countries, you can use a customer list from country A to create a lookalike audience in countries B and C.

Bidding & performance

Similar to Google Ads and other advertising platforms, Facebook operates a real-time digital auction. However, Facebook auctions evaluate advertisements slightly differently – based on their competitive value

Unlike other advertising platforms, this is not solely made up of the maximum amount you are willing to bid, but also the intrinsic value of the ad: level of engagement that the ad attracts, user experience (for example, likes, comments, negative feedback ). For example, should you bid €3 to have your ad shown at your chosen placement, the magical and mysterious algorithms of Facebook Ads then weigh your ad’s relevance against other competing ads and organic content. The more relevant your ad is to your target audience, the less you need to bid for its delivery. 

How do you know if your ad is performing well? 

Start with establishing what your goal with Facebook advertising is. Is it purely to maximise the number of clicks and landing page views? Alternatively, is your aim more concrete, and you want people to take a particular action once they get directed to your landing page?

Your next step once you have delineated your goal is to instruct Facebook Ads to begin optimising to deliver your adverts to people who are more likely to take the required action. 

Once you have set up your campaign accordingly, the ad will then enter the learning phase, that does precisely what it says on the tin – Facebook uses its algorithms to learn whom to show your ads, to maximise your chosen results. Ad delivery during the learning phase usually is more expensive; however, it should normalise after reaching circa 50 conversions (i.e. your desired actions taken by Facebook users).

If you are only starting with Facebook Ads, you must know some basic terms, that help you  evaluate your ads’ performance:

  • Impressions – the number of times your ad gets delivered to a Facebook user for the first time
  • Reach – the number of people that your ad has been delivered to on Facebook
  • Clicks – the number of times your ad has been clicked on
  • CTR or Click Through Rate – this is the percentage of clicks on your ad out of all the impressions it has received
  • CPC or Cost per Click – the average cost that you have paid for each click
  • CPA or Cost per Acquisition/Action – average cost per whichever action you have defined as a conversion. This can be a newsletter signup, website purchase.
  • Frequency – the average number of times that your ad was shown to a Facebook user
  • Attribution – different marketing-related steps that a user takes before making a purchase

There are other metrics that you will gradually become familiar with once you get more used to working with the Ads Manager, however, these are core terms that all advertisers should know and consider when evaluating performance.

Many newbie Facebook marketers choose clicks as their campaign objective, and here it is really worth being a bit cautious. 


Well, if you choose clicks as your business objective, this is precisely what Facebook Ads will deliver – a whole bunch of clicks! 

In other words, you will have many people clicking on your ads and visiting your landing page for a second, only to return to Facebook and continue scrolling through their news feed. Not only does it not deliver results, but it also increases the bounce rate on your website, which is damaging for your sites SEO dwell time. 

Similarly, choosing video views as your objective and Facebook Ads Manager will show your video ads to people who have watched lots of videos. Sounds logical, right? 

Be mindful about bidding on metrics like reach and engagement. There is a reason why Facebook Ads doesn’t measure cost per like, cost per view, and so on. You are more likely to be advertising on Facebook, to earn an ROI – and as fantastic as these may seem, likes will not show on your balance sheet.

Tip: Keep an eye on your ad’s Frequency to avoid spending your budget on the same people seeing your ad over and over again. Generally, your Frequency should not average more than 1.7 times per person within one day. If you find this to be the case, you should check your exclude categories at ad set level of your campaign. This is vital to ensure that your targeted audiences at different ad sets are not overlapping.

Ad Creatives – visuals and copy

When considering your ad visuals, opt for high-quality images and avoid generic stock photos that have been used countless times. Obviously you shouldn’t use pictures that you have no right to use. 

It is always great if you make your own original high-quality photos;if you have the benefit of having a graphic designer in your team who can create eye-catching visuals that stand out, all the better. If not, there are plenty of brilliant image banks, where you can discover excellent visual content without copyright restrictions. Try ShutterstockPexels or Unsplash to name just a few.

Regarding your ad copy, Facebook currently allows up to 90 characters for your text, 25 characters for the headline and 30 characters for link description. Meaning, you do not have many words to play around with, yet this is not necessarily a bad thing.

Some researchers have discovered that four words are the most optimal length for a Facebook ad headline. This may sound counterintuitive, yet giving a full description of your product or service, is not what you should aim for with an ad. 

Instead, your copy should grab the attention of a well-targeted audience, and create enough interest to click and be directed to the landing page, which should be optimised to maximise conversions. I can almost certainly promise you that what works for some advertisers will not work for others. 

Just remember these three key steps: 

1) test and experiment with different texts and visuals, alternate combinations

2) test some more, 

3) keep testing until you find your winning creatives!

You can change the copy of your ads if you are retargeting users on Facebook. Say you are retargeting people who have visited your website in the last seven days – this is not the first time they come across your product, so you have leeway to be more ‘salesy’ with your message.

Tip: If you are working with a minimal budget, you should probably stick with a single ad variation, so that Facebook algorithms have the best opportunity to gather data and optimise to display your ad to the right target audience.

There is a plethora of information you can find on the Internet if you wish to learn the more in-depth technicalities of Facebook Ads. 

From how to learn to use Facebook Ads Manager, seek information and tips on how to master your ad creatives, and to get to know different ways to target and optimise your campaigns. 

What you need to master to succeed is the combination of all of the above. If you don’t have the time to dig deep into the knowledge and need your Facebook Ads strategy done yesterday, get in touch with specialists who’d be happy to discuss your goals and help you find the best strategy for it” or something.


Minna Harjo

Minna Harjo is a Social Media Specialist and regularly advises on about social media strategy and tips for several financial services companies and digital marketing agencies. With a passion for research, Minna has a natural love for writing and accumulating in-depth knowledge that sparks her interest. Minna is based in Tallinn, Estonia.