Targeting Ads to an Audience
Facebook Ads are targeted to users based on their location, demographic, and profile information. So for example a restaurant could target people who live locally say in a 5 mile radius, where as an online business or a business not requiring much face to face contact could target a much larger area as it is not a business requiring customers to be close by. Because Facebook is so rich in data many other things can be targeted such as income level, hobbies, interests etc. and any combination of them. That means if you are selling luxury yachts to millionaires you would probably target people who have an income above £100000 a year or if selling products for dogs or cats target people who have a dog or cat.
The advantage over traditional forms of advertising is that you don’t usually have much data on them with traditional advertising if any at all and have to waste money on ads that target too broad an audience. After creating an ad, you set a budget and bid for each click or thousand impressions that your Ad will receive. Users then see your Ads in the sidebar on Facebook.com when ever they use Facebook.
What is the difference between Search and Displays Ads?
Search Ads appear from matching key search terms (called keywords) entered in to search engines. This is usually where someone is looking for something definite such as a plumber because they have a burst pipe and are looking for a service relatively immediately. Ads that appear here tend to be more expensive but have a higher click and conversion rate. Google Ads are an example of a Search Ads Service.
Display Ads on the other hand are ads that appear on websites, apps or social media through banners or other ad formats made of text, images, flash, video, and audio. The main purpose of display advertising is to deliver general advertisements and brand messages to site visitors. For display ads to have good click rates and conversions the advertiser needs to know as much as possible about the end user to make it more likely they will notice and react to them. The downside is the user is not directly searching for something so conversions will be lower but tend to be cheaper than Search Ads. Facebook Ads are an example of a Display Ads Service.
Which type of Ad is best for your Business?
For Search Ads this depends on your business and how likely someone is to use a search engine to find a business like yours or else it might be better to rely on Display Ads. Some businesses may use both, some will try both to see which one works best. A good example that would work best for Search Ads is a plumbing business as people tend to want to use this service more in an emergency situation like a burst pipe or needing some plumbing work on their property and are more likely to ignore ads from display ads. On the other hand a business like a restaurant might work best for a Display Ad.
Measuring ROI and CPC
Once you have a campaign that has run for some time and you have tweaked it to get the best results possible, you can use CPC( Cost Per Click) and ROI(Return on Investment) metrics to measure how well a campaign is going. From there you can decide to increase the budget, so that if the ROI shows for every £100 spent you get £1000 of business then if you spend £200 you should get £2000 of business.