What type of small businesses can benefit from Facebook ads?
Join our free Facebook group and learn from other advertisers. Join now!
Facebook Advertising Strategy for Small Businesses

Facebook advertising is a great way to find new customers, but there’s no single tactic that works for every business.

One thing we try to teach at Online Advertising School is that the correct ad channel for your business depends on what you’re selling or promoting. To run successful online ad campaigns, you have to understand the ad channel itself.

Requirement #1: Interesting Content

People on Facebook aren’t looking for specific products or services. Nobody visits Facebook to find a chiropractor or a plumber. They are looking for content — videos, news, photos, whatever. If they want to search for a service, they use Google.

What does this mean for you, as an advertiser? It means you can’t expect to just tell people about your service and start making sales. This might happen to work a few times, but I can promise you that in the long-term it’s not a profitable way to run ad campaigns on Facebook.

Instead you should focus on providing what people are looking for — interesting content. We’ll cover how to do this in a later lesson, but for now keep in mind that in order to have success with Facebook ads, your business must be able to create interesting content that is somehow related to your business model.

Requirement #2: High-enough Margins

A second requirement to run successful Facebook ads: your business must have relatively high margins.

The reality is you aren’t going to generate leads on Facebook for less than a few bucks at the very minimum. So if you only make $10 on each sale, Facebook is going to destroy your profit margins.

We cover the ins-and-outs of Facebook ad costs in another course, including specific ways to lower your costs in the short and long term.

Note that if you have many repeat customers, then it might still make sense to use Facebook ads even if you have low margins on a single sale. For example, if you are a personal trainer, then most of your customers are likely repeat customers. So even if one personal training session nets you $50 and it costs you $50 to get a lead through Facebook, if that lead turns into a repeat customer who you train once a week for 6 months, your margins are obviously good enough to justify a Facebook ad campaign.

On the other hand, a company selling T-Shirts for $20 is going to have a hard time making money with Facebook ads. It’s still possible, of course, but you have very low margins and likely very few repeat customers. Unless you’re getting very cheap conversions from your ads, you will probably end up losing money.

So the second requirement for businesses to successfully run Facebook ads is margins high enough to justify the cost of the ads.

Requirement #3: Cash To Invest

The final requirement for your business to successfully use Facebook ads is enough money to spent up-front. If you don’t have at least $2,000 to spend on your Facebook campaign, I would advise you to invest your resources elsewhere.

Facebook campaigns have to be optimized and tested in order to get good results. You’ll need to test different advertising creative and copy. You’ll need to spend money to find your best target audiences (click here for our course on this topic). All of this testing will consume some money up-front. Once it’s done you’ll see much better results, but you’re likely to lose some money at the beginning of your campaign.

For this reason, unless you have a reasonable amount of money to spend testing your ads and audiences, a Facebook ad campaign is probably not worth the time and money.

Our third requirement to consider before running a Facebook campaign is whether you have at least $2,000 to invest in advertising.

Wrapping it up

You now have criteria for evaluating whether a business could benefit from advertising on Facebook. Ask yourself these questions before running your campaign:

  1. Can I produce content related to my business that people will find interest? (The answer to this is almost yes — but it may not be immediately obvious. We’ll teach you how to find content ideas in a later lesson)
  2. Are my profit margins big enough to justify the cost of acquiring a new customer through advertising?
  3. Do I have at least $2,000 to invest in testing and optimizing my Facebook ad campaign?

If you answer yes to all of these, then your business can likely benefit from Facebook ads.

In the coming lessons, we’ll teach you the specific process to setup a successful ad campaign for your business.

Learn how to run profitable Facebook ad campaigns

Get our free 7-part email course on finding your perfect Facebook audience. You'll learn expert strategies to lower costs and increase results.