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The Ultimate Guide to Facebook and Instagram Advertising for Small Businesses

Updated: May 5

Have you tried paid advertising on social media yet?

Whether you like it or not, social media is here to stay, and people are making money hand over fist with Facebook (and Instagram) advertising. American advertisers alone spent $23 billion on Facebook last year. You don’t spend that kind of money unless you’re getting an incredible ROI out of it.

However, it can look a little intimidating to small businesses and entrepreneurs new to online marketing. It doesn’t have to be. With some education, you can be well on your way to Facebook advertising success.

I’ll refer mostly to Facebook advertising from here on out as typically you make an ad on Facebook Business Manager and push it out to both your Facebook and Instagram accounts.

What are the main advantages of Facebook Advertising?

There are a few key advantages that set Facebook marketing apart from other options. They are the ability to target specific audiences, experiment with different advertising options, remarket to prospects familiar with your business, and the host of analytic functions.


The ability to very specifically target your ideal customer means you can easily interact with the people most likely to convert, whether that’s a purchase, sign up, or something else.

Let’s say I’m selling leggings locally that are great for women into bodybuilding and yoga but don’t work for people into running (for whatever reason). I can target exactly that by creating a new audience: Women in Austin aged 18-35 who are interested in either Bodybuilding or Yoga AND are interested in Leggings or Tights BUT are not interested in Running.

Can you see how powerful this kind of precision targeting could be? Now imagine you could create multiple audiences similar to this and test them all against each other to see which one performs the best. Well, you can and you will.


That leads me to the next advantage Facebook advertising offers. You can create multiple ads and campaigns and test them all against each other in real time. Over enough time, you’re almost guaranteed to find some clear winners and start diverting your ad spend to the best performing ads. In the beginning, the simplest way to do this is to select the split test option when you’re creating a campaign and choose a test variable. We’ll go into this further later.


The third awesome advantage Facebook advertising offers is the ability to remarket people who have taken some action but not converted into a paying customer. These could be people who visited your website, visited your add to cart page but didn’t check out, watched one of your videos on Facebook, used your app, or something else.

Think how this could play out: you show an ad to someone and they visit your website but don’t buy. Now they’re familiar with your brand. You re-target those people with a special offer. They make it to the cart page but don’t complete the checkout process. Now you show those same people an ad with a video review from a thrilled customer who did complete the process. How do you think this sequence will affect your conversion rates?


Finally, Facebook does a great job of tracking a wide variety of statistics to help you understand your ad performance and optimize your campaigns over time. With the Facebook Pixel installed on your site, you can track everything from Cost Per Click (CPC), Cost Per Acquisition (CPA), percentage of video ad watched, and much more.

Creating a Facebook Business Manager Account

Ok, so it’s clear Facebook advertising represents an opportunity for your business. Let’s start setting it all up.

Your first step is to create a Facebook Business Manager account. I don’t recommend using your Facebook Business Page’s Ad Center - this is for amateurs and has reduced functionality.

Facebook Business Manager will allow you to manage all your ads, analytics, audiences, pages, grant access to collaborators, and much more. It’s a free platform. You’ll be spending real money so it makes sense to do it right from the beginning.

Head to and click create account in the top right corner:

Login with your Facebook account and fill out all the relevant information.

When you’ve created your account, click the hamburger icon at the top left and navigate to the Ads Manager.

Great! We’re almost ready to dive into our very first advertising campaign. We just need to set up our Facebook Pixel. This will allow you to track user behavior by visitors from Facebook on your website. We’ll get into this in a minute.

Setting Up Your Facebook Pixel

Follow these instructions from Facebook to do so.

The only change I would make is if your site is built on WordPress as all of mine and my clients are, install the free Pixel Caffeine plugin from AdEspresso to complete your Pixel set up. It makes the process even easier. In my opinion it’s a more useful and robust option than Facebook’s WordPress plugin, with some helpful functionality.

Creating Your First Campaign

It’s best to start simple for your very first campaign. We’ll pretend we’re running that leggings/yoga pants company we mentioned earlier.

Let’s create an ad focused on driving traffic to your website landing page. We’ll test a few different images to see which one resonates the most with the target audience we figured out earlier.

First, on the Ads Manager page in Facebook Business Manager, click the green +Create button:

Now we need to decide what our marketing objective here is. This will determine how Facebook optimizes your ad and decide what ad set up options you’ll be shown by Facebook’s ad campaign creator.

We’ll be targeting traffic, but I’ll briefly go over the other objectives.

Facebook Campaign Types

There are 11 marketing objectives to choose from when creating a Facebook ad campaign. These fall under three general goals: Awareness, Consideration, and Conversion.

Awareness campaigns are all about familiarizing prospects with your brand.

Consideration campaigns are focused on getting prospects to take action and engage further with your company. This might be watching a video, visiting your website, filling out a form, installing an app, or something else. Now the prospect doesn’t just know you exist - they know who you are, what you do, and why you do it.

Conversion campaigns are focused on getting prospects over the final hurdle and becoming paying customers of your products or services. For brick and mortar businesses, this means offline store traffic.

Setting Up Our Facebook Campaign

We’re going to select Traffic as our marketing objective because we want people to come to our online yoga pants store and check out our offerings. As we mentioned, we are going to test a few different image ads, so we are going to select the “Create Split Test” option and choose the Creative variable.

You can test a few different variables.

Creative includes imagery or video, copy, headlines, links, and link text.

Delivery Optimization determines whether Facebook should optimize for the widest Reach, most Impressions, lowest CPC, or some other factor.

Audience lets you test different targeted audiences against each other.

Placement tests ad performance in different placements, like the Facebook nobile news feed vs. the sidebar. It’s always great to test your ad performance on Facebook vs. Instagram to see which platform is most effective for your offering.

We chose Creative and hit Continue.

On the next page, we select website traffic:

And input our target audience:

For now we will choose Automatic Placements as we haven’t tested any placements yet. We’ll also leave the Delivery Optimization settings set to Landing Page Views for now, until we have a well-performing ad we want to start incrementally improving. For the split test budget, we want to spend at least enough to reach an estimated test power of 80% so that we can feel confident our test results are accurate. This percentage represents the likelihood of accurately detecting a difference in our ads performance. This test will run for 7 days and cost us $420.00.

On the next page, we choose the Facebook and Instagram pages we want to post as (this is a made up business so we will just use our agency’s pages). Then we choose the format.

You could show off a carousel of images or a collection, which are often used for stores that have multiple products like clothing, jewelry, and other consumer goods. You can also create a single image or video ad.

Be aware that complexity does not always equal results - some of the most successful campaigns we’ve ever ran were single image ads with minimal text.

Below, you’ll see a checkbox to add an Instant Experience. Instant Experience are landing pages that pop up within Facebook whenever someone clicks on your ad. I encourage you to experiment with these as we’ve seen great results from Instant Experience ads.

Next, we can choose the media we’ll be using for this ad and modify it for different ad placements, turn it into a video or slideshow, and more. We’ll stick with the simple image for now.

By the way, Facebook has a solid stock library of images. If you’re having trouble sourcing a relevant image for your ad, check it out.

Finally, we can actually design the ad.

For products like this, you don’t need to write a book. 1-3 sentences should suffice. For info products like e-books and courses, long form copy often performs better.

Your headline is very important - After testing images I’d test headlines. Think about how your product can solve a problem your customer is experiencing and positively influence their emotional state and express that.

We chose a high quality image from freepik. They have a great collection of free resources, and we pay $10/mo for a subscription that gives us access to even more imagery as well as a lot of great vector designs we use all the time when we’re designing websites, ads, and just about any other online media.

If you were actually selling your own line of leggings I would recommend you shell out for a photographer and get professional shots of your products. Every city is full of talented photographers at different rates.

Also, don’t think you need to spend money on stock imagery. This image was free, and I checked some of my favorite free online stock image libraries and found even more great pics.

Here’s some from Unsplash:

And Pexels:

You could also make a custom graphic. If you don't have graphic design experience we can show you how to make solid social media ads and content for free.

Cool, so we’ve got a basic ad ready to roll. You’ll see a box to enable your Facebook Pixel. We did this earlier so go ahead and enable it.

For now, hit Continue at the bottom to design the next ad you’ll be testing.

You’ll see that on the next page your ad has been copied exactly. Since we’re testing images, scroll to the media section and hit the X on the image and upload a new image.

Here’s our 2nd ad:

Now we’re going to test a third ad. Scroll to the bottom again and hit “Test Another Ad”:

You can also do this on the left sidebar:

Repeat the image replacement process. Now we have our third ad:

Let’s scroll to the bottom and hit review to see check over our ad campaign so far:

This is where I like to name my ads something that lets me know what the ad contents are. If everything looks good, hit confirm, enter your credit card information, and see how you do! It’ll usually take Facebook a few hours to review your new ads so be patient.

Congratulations! Your first Facebook ad campaign is live!

Understanding Analytics

Great, your ad has been running a few days and the results are coming in.

You look in your Ads Manager and see all kinds of numbers and data that doesn't mean anything to you. To find out what each of these columns mean, hover over the column header. A tooltip will pop up explaining:

Different statistics will be more or less important depending on the ad. For our example campaign focused on traffic, we would want to get our Cost Per Result / Cost Per Click as low as possible to get maximum website visitors for minimum ad spend.

However, if we were running a conversion campaign, I care less about CPC. I’m happy to pay more per click if my conversion rate is better right? If I’m getting thousands of $0.10 clicks but none are converting then those clicks are worthless. If I’m paying $2 per click but half of those clicks buy something then I’m crushing it.

Always remember you’re in this game to make sales, not get the most likes, views, or clicks.


So we got some good traffic from our first ad campaign but not that many people bought. According to 2018 statistics, less than 3% of visitors are going to convert. How can we convert more of those visitors?

The simplest way is to show those visitors, who are now familiar with your brand and more likely to buy, another ad to draw them back in. This might be an offer, like free shipping or 15% off, or it might be a showcase of your best products, an endorsement from an influencer, or whatever else makes sense for your situation and business.

To retarget visitors you need to have had your Facebook Pixel operating correctly while your last ads were running.

To target these folks we need to create a custom audience.

Custom Audiences

Head to Assets -> Audiences in the Facebook Business Manager:

Click Create Audience -> Custom Audience. You have a variety of people of options. The most common and the one we will be using is Website Traffic. Click and you’ll see this:

Now we can choose what action we want to retarget. Maybe they visited a specific page or took a specific action. Target that here. You can also widen or narrow your audience. You might want to include people who visited both your pricing and product page for example.

But who might you want to exclude?

One classic tactic is to target everyone who visited your cart page but exclude everyone who then completed a purchase. To do so, exclude people who were shown your thank you/purchase complete page. This way, you can retarget people who abandoned their carts.

Another tip if you have a lot of traffic is to reduce the audience to only people who have visited your site in the past one to two weeks as people quickly forget about you and your business. However, if you have a smaller amount of traffic as a small business I wouldn’t worry about it.

Now, create another ad campaign the same way as the first and when you’re choosing your audience, click in the custom audience field and choose the new audience you created:

Boom! Facebook retargeting ready for action.

Lookalike Audiences

Lookalike audiences are an interesting feature of Facebook advertising that are definitely worth trying out. You can use the data Facebook gathers on your customers o create new audiences that are similar to them to varying degrees. Similar to Custom Audiences, head to the Facebook Business Manager Audiences and click Create Audience -> Lookalike Audience.

Use your Facebook Pixel as your Data Source and then choose the event. I recommend creating multiple lookalike audiences for different events and testing which converts best. Amore similar audience is almost always better, so I’d recommend keeping it at 4% or below unless your audience size is too small as a result.

That’s it, your lookalike audience is set up! Test out some campaigns with those audiences and see how they do!

How to Generate Great Ad Ideas

An awesome and easy first step to creating winning campaigns is… to copy successful campaigns! This is actually super easy. As part of Facebook’s new effort to be more transparent, you can see the ads being run by literally anybody and everybody on the Facebook Ad Library. If I was our hypothetical leggings company, I might check out a company like Lululemon:

But wait… how do you know which ads are actually successful? Well, you can assume that if a big fish like this has been running an ad for a long period of time, say over a month, they’re making a solid return on it. If you scroll down, you’ll see a couple of ads that have been running since May 2019:

I think it’s safe to assume they’re doing well if they’ve let these run for over a month.

Alternative Method to Finding Ad Examples

Another way to find the ads a company is running if you’re having trouble is to go their Facebook Business Page and click “See More” on the right hand sidebar:

Then, click Go to Ad Library at the bottom of the pop-up that appears:


Paid advertising on Facebook and Instagram is simpler than it looks at first glance. With some study and practice a small business can get started fast, start experimenting, and make some dang cheddar.

Don’t be scared to jump in and see what you can figure out. In the words of the renowned American poet Young Jeezy, “scared money don’t make no money”.

Good luck!

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