A Step-by-Step Guide to Creating a Facebook Ad for Small Business

February 3, 2017 • 12 min read
Ahmad El-Najjar

Ahmad El-Najjar


Why Facebook?

Facebook is now, officially, everywhere. Love it or hate it, over 14 percent of the world’s 7.125 billion people are on there looking at cat videos. Odds are, so are your customers. If creating a Facebook ad for your small business seemed like a marketing effort you didn’t have time for, it’s time to reconsider.

Who’s on Facebook?

The largest demographic on Facebook is 25 – 34 year-old men and women. Half of all U.S. 18 – 24 year-olds fire up Facebook first thing in the morning. Seventy-two percent of all U.S. adults visit Facebook at least once a month, meaning the platform has more monthly active users than WhatsApp, Twitter, and Instagram combined.

Clearly, there are a lot of customers in the Facebook sea, but what makes the platform a good medium for actually connecting with them? Nearly half of Facebook users follow a brand they like. And folks on Facebook are more receptive to ads than they are to display ads generally.

Here are some numbers: The average click-through-rate for digital display ads across all formats and placements is a dismal 0.06 percent. Display ads are not only more apt to be ignored, but many people now use ad blockers, meaning users never even get the option of ignoring your ad.

Back on Facebook, the average click-through rate for an ad is 0.9 percent. Simply adding a call-to-action button to your ad can more than double that rate.

It’s important to know, however, that creating an ad and paying Facebook money doesn’t mean you’re actually paying them to run your ad, the way it works for a television or newspaper ad. When you give Facebook money for an ad, you’re placing a bid. Because Facebook limits the number of ads each user sees, you’re competing for that space with every other advertiser who is targeting the same users you are.

If this sounds complicated, don’t worry. We’ll talk you through every stage of creating the ad.

The Bottom Line: Facebook is awash in receptive potential customers for nearly any kind of business. The trick is getting a quality ad in front of the right audience. This is your guide to targeting the right users!

Step One: Campaign

  • Log in to your Facebook account
  • Go to Facebook Ads Manager by clicking on the dropdown menu on right hand of the navigation bar, next to the padlock.
  • Click on “Create Ads,” which takes you to the Ad Manager.

Alternately, you can click on “+ Create Ad” in the “Your Ads” box underneath the navigation bar, on the right.
where to create ads on facebook

  • Next, you’ll need to choose the objective of your ad. It can be useful to think of this as the answer to the question, “What am I trying to achieve?”

As you can see, there are three categories to choose from, Awareness, Consideration, and Conversion, each with its own specific type of ad campaign. You’ll select a specific campaign from one of those categories.

define the marketing objective for your adAwareness is a good choice if you’re just looking to let people know that your business exists. It’s often the place to start if you’re a newer business still low in the “likes” department, without much of a following online or in real life.

Consideration is the right choice if you’re looking to collect information, for instance, by sending people to your website, having them subscribe to your newsletter, or if you have an event you want to promote.

Conversion is where most businesses hoping to boost sales immediately will be drawn. Be careful here, though. If you don’t already have some brand awareness, a solid following, or a product or service that sells itself, this might not be the best option. Conversion is all about your target audience taking the big action of either making a purchase or accepting an offer. Don’t assume that choosing a Conversion ad will also boost awareness of your Page.

We’re going to use “Traffic” as our example campaign, which is designed to increase the number of visits to your website (or users for your app).

  • Once you’ve clicked on your campaign type, you’ll be asked to name your campaign. If you think you might run more campaigns, it will be helpful to be specific as possible, for easy identification.

Step Two: Ad Account

  • Click on “Create Ad Account.”
  • Confirm your country, currency, and time zone.

Step Three: Ad Set

Now you’re in the “Ad Set” section, in which you define your audience, ad placement, budget, and ad schedule.


  • Choose where your traffic should go—your website or your app? (We’ll choose Website for this example.)
  • Create a Customer Audience by choosing Locations, Age, Gender, Languages, and Detailed Targeting.

understanding the audience options

Location (2) may be the most important setting. It can be large or small and include people who live in the area or who have recently traveled there. For this, you’ll need to understand your business and your customers and how they each affect your choice of location. For example, if you’re relying on online sales, then targeting your location to just your neighborhood might not make sense—anyone anywhere is your customer. But, if you’re a neighborhood business like a retailer or restaurant, you’ll probably want to target individuals close to you or at least in the same city. If you need people to come to your NYC pizzeria, advertising to people in Miami won’t make a lot of sense. Set your location according to the kind of services you offer and the reach you want to achieve.

Age (3) Do some research here and get a sense of the average age of your customers, so that you can set the age targets for your ad accordingly.

Gender (3) For many businesses, gender plays no role in the target demographic. However, for some retailers who specialize in gender-specific clothing or shoes, it may well make sense to target the gender most likely to support your business.

Languages (3) Many small businesses specialize in services based on language. If you’re located in a primarily Dominican neighborhood in the Bronx, for example, it might make sense to target your ads in Spanish. It’s all is about knowing your customers and your community.

Detailed Targeting (4) has three different components, so we’ll walk through each below.

Audience Definition (5, 6) This box simply tells you how targeted your custom audience is. It’s best to be somewhere in the green.

Detailed Targeting This is where you can target your ads according to the interests of Facebook users: fitness, health, immigration policy, politics, sustainability, whiskey, dogs, lingerie…you name it. You can include and exclude people based on interests, behaviors, or demographics. If you’re not sure where to start, click on “Browse” for options.

The vast amount of granular data Facebook has on its users means that it can offer you an incredibly specific target audience, so choose the following carefully. Two things to keep in mind: remember you can exclude people based on this information as well, and don’t narrow down your audience too much the first time around.

understanding detailed targetingInclude (1) Here is where you can start identifying your target audience most specifically, by including people according to the following details.

  • Demographics can include level of education, income or net worth, upcoming or recent life events (anniversaries, births, new jobs, and so on), political leanings, and work information (industry, job title, even specific employer).
  • Interests range from business and industry to all sorts of hobbies and “extracurricular” interests like entertainment, fitness, food and drink, fashion, sports, and technology. Use this setting to target your potential customers according to your business. If you own a running shoe store, for example, target people interested in running, exercise, and fitness.
  • Behaviors is a more listing of more everyday events in people’s lives, like what type of charities they donate to, what financial instruments they use, what kinds of products they buy.

Exclude (2) Like its partner “Include,” this is a way of further targeting your audience, in this case, by eliminating people in particular demographics, and with specific interests and behaviors.

Connections (3) allows you to include or exclude people who like or follow your page, use your app, or responded to an event. If you don’t have a lot of a followers yet, just leave this option open.

Keep in mind, these settings can’t account for everything, and they’re really just Facebook’s best guess. Using your expertise about your products or services and who your customers are to inform your selections.


Your choices in this section, not surprisingly, determine where your ads will be. You can have Facebook automate this, which they recommend, or you can customize placement. Customizing is probably an option to try after you’ve run a few Facebook ads, and have a better sense of how they’ve done and who responded to them. Some of the options include choosing to show ads to just desktop or just mobile users; additional platforms (like Instagram).

Budget and Schedule

Here, you’ll set your maximum daily or lifetime budget. Facebook will throw out a default dollar amount based on your objective, and what its algorithm suggests will optimize that objective. You can change it to whatever suits your budget.

A soft entry into the Facebook Ad world might be a daily budget of $5, running your ad for three days. This total of $15 keeps the investment low and allows you to learn from your initial ad.

choosing a budget and schedule

Keep in mind that this number will be averaged, so if you set a daily budget of $20, some days you’ll spend $10 and other days $25, and so on. If you choose a lifetime budget, you’ll choose a date range (that will be the “lifetime”). If you choose a daily budget, you have the option of determining a date range or simply running the ad continuously, at your indicated daily rate. Your ad will run until you return to the Ads Manager and turn it off.

There are advanced options here that you can try. Again, we recommend not worrying about these until you’ve run a few ads and have a good sense of who your ideal audience is and when they’re likely using Facebook. These are things that you can learn from Facebook Insights (their analytics) after your ad has run.

If you think you might use these options again, name the Ad Set you’ve created, so you’ll be able to replicate it easily.


This is where you actually create or upload the ad content. Facebook offers you the option of creating a new ad or using an existing post.

choosing the format of your facebook ad


  • Choose the Format—a single image, a series of images (shown either in a carousel or as a slideshow), a video, or a combination of images and video (canvas). To use an existing post, see below.
  • Upload the image(s) for the ad or choose from Facebook’s free stock photos. If your own photos are high quality, they will likely be better than any stock photos, because they’re more specific and relevant to your business. Make sure that you use Facebook’s Recommended Image Specs, to the right, so that your images don’t look squashed or stretched.

Most image sizes for the web are measured in pixels rather than inches or centimeters. So, be sure you’re resizing to pixel specifications. If you’re not sure how to do this, you can use a free online photo resizer like Image Resize to get your photos just right.

getting the image sizes rightPages and Links

  • Connect Facebook Page If your ad will be showing in the News Feed, link your ad to your business’s Facebook page. If the ad won’t be in the News Feed, you can turn this off.
  • Text Next, enter the copy for the ad. This should be copy you’ve already written and rewritten and run by a few folks. Don’t try to whip up something on the spot.
  • Destination Finally, determine where users are taken when they click on your ad. This can be a website or “Canvas,” which is for mobile users. It will optimize the ad. (If you want the mobile ad to go to your website, use the Website Conversions objective.)
  • Cards This a feature you’ll only use if your ad is appearing in the News Feed. It adjusts the order in which your images appear, gives them headlines, and allows you to add your Page profile image at the end.

To Use an Existing Post instead of creating a new ad, the process is slightly different. You’ll still link the ad to your website. Then, choose the post you want to use from the dropdown menu provided. Under Advanced Options, you can create a “Pixel” to help you track, optimize, and re-market the ad. (Facebook provides information on what Pixels are.)

Whichever option you use, as you create your ad, Facebook will show you a preview of the ad in the right column.

  • Make sure you’re happy with it.
  • Click the green “Place Order” button at the very bottom of the page!

Your first Facebook Ad is on its way. See, that wasn’t so bad!

Well, it’s not quite over.

You just spent a lot of time putting this campaign together, so you’ll want to know how it performed, what you can learn from the data, and how you can improve. That, however, is a different post for a different day.

Most important of all, find the right budget for your small business, and don’t be shy about keeping it on the cheap until you feel more confident about the results you’re after. Ask your Townsquared neighbors for advice and insights on what worked for them and be sure to share what you’ve learned.

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