Do Facebook Ads Still Work in 2022? On Facebook Ads and Their Effectiveness for Small Businesses

by Balaji Venkatesan
Published: Last Updated on

Now, we understand if you’re not quite as enthusiastic about the effectiveness of Facebook Ads as Mr. Di Caprio here. But give us a couple minutes and we’ll tell you why it just might be a good idea. 

The Workings of a Facebook Ad

What is a Facebook Ad? 

An advertisement on Facebook by a business who has a Facebook page is essentially a Facebook Ad. The social media platform allows you to set a target audience based on a variety of factors we’ll be discussing later on in this blog. 

Preemptive Readiness 

In order to put up Facebook Ads, you should have the following factors decided: 

  • The Goal – The reason you want to put up a Facebook Ad and what you want to accomplish with it. 
  • The Audience – You should know exactly who you want the Ad to reach. 
  • The Budget – Advertising implies paying for the service. You should decide how much you can spend toward the particular Ad. 
  • The Duration – Facebook has a couple of options regarding the lifetime of the Ad. 
  • The Content – Based on the goal, set aside the text and audio/video required for the Ad.
  • The Placement – Where you want your Ad to appear for the audience to see. 

What is it really? 

Facebook Ads is a type of Paid Social Advertising. In this method, your business finds your audience with the Ad. 

You decide what you want to accomplish from the Ad – it could be more followers, more engagement, more traffic to your website, etc. You proceed to use Facebook’s extremely sophisticated audience targeting parameters and set them to your preferences. This is courtesy of the data they have about their users. 

You can choose to create a custom audience as well wherein you put in a few parameters and Facebook creates a lookalike audience for the same. 

Facebook Ad Auction 

Ever come across the term ‘cost per thousand impressions of an Ad’? It’s shortened to CPM and is an identifying factor used in the Ad Auction system by Facebook. 

Facebook uses the Auction system in order to decide which Ads are shown to which users. Now of course, not all businesses have the same objective of putting up an Ad. Thus to make it neutralizing, Facebook uses an estimated CPM to determine the winning bid. 

Although Facebook’s intrinsic quality bid is a mystery, there are a few factors like likes, shares, impressions etc that are a part of the decision making process. 

Facebook also factors in something called the competitive value of the bid. According to Wordstream, ‘’The competitive value of a Facebook ad is the sum of an advertiser’s maximum bid – how much an advertiser is willing to pay every time a user takes the desired action – and the ad’s intrinsic quality bid, or how much engagement an ad brings to Facebook and the user experience.’’

The Cost Factors

  • Audience – Be sure to create an audience that will maximize your chances at converting. This will be the optimal way of increasing your ROI. Go for a narrow and converting audience rather than a broad, generic audience that will cost you more and result in lesser conversions. 
  • Ad Budget – How little or lots you decide to set aside for your Facebook Ad spend budget directly impacts your Facebook Ad costs. Sure, a bigger budget will give you room for flexibility with your Ad but it’s highly possible to create good Ads with a small budget too. 
  • Bid – Choose an automatic Bidding strategy and work toward a high Ad quality score. This way, you can minimize the amount you spend on Facebook Bids. 
  • Objective – Your aim for the Ad impacts the cost behind it. Usually, a Conversion oriented Ad works out costlier than an Awareness or an Engagement Ad. 
  • Placement – This gives you options of placing your Ads anywhere ranging from Instagram, Facebook to the Audience Network. You can automate the process or select manually where you want your Ad to appear. 
  • Quality – Facebook exercises a relevance score on your Ads. The more relevant and engaging your Ad is, the lower your Advertising costs can go. It primarily depends on the user’s expectations. 
  • Season – Seasons like Diwali and Christmas have everybody shopping for things both necessary and otherwise. Naturally, Facebook drives up their Ad costs during these seasons due to the increased competition for Ad space. 
  • Industry – Markets catering to consumer services and finance are said to have the highest advertising costs. It’s important to create highly qualitative content and focus on your bidding in order to succeed in your industry. 

The Statistics of It All 

We’re going to hit you with a bunch of percentages so sit tight and buckle up! 

Why Facebook?

Facebook reaches 59% of the world’s social networking population. You have to be where your users are present. 

Why Facebook for Advertising? 

93% of marketers use Facebook advertisements regularly, which means about 3 million businesses use Facebook to market their business. You have to be where your competition is as well. 

Do users even care about Ads? 

An average Facebook user clicks on 12 ads per month. Yes they do, it’s about capturing their attention long enough to have them click on your Ad. 

And what if they don’t click on my Ad?

What we mean to say is, go back to the drawing board and figure out what you can do better in your next attempt. 

The Effectiveness of Facebook Ads

This is your answer to whether Facebook Ads still work. Yes, they do. And we’re going to explain exactly how in the following points – 

Monthly Active Users

Facebook has 2 Billion monthly active users on the platform. 

To put this into perspective, the World’s total population is 7.9 Billion as of 2021. And this is not even the users active on the internet which come up to 4.66 Billion, 58% of the total population. 

What does that mean? 43% of the active internet users are active on Facebook. And these are numbers you simply can’t ignore. This 43% makes up a wide range of your existing and potential customers. So it doesn’t matter if you’re a small business or established, advertising on Facebook is a smart choice all the same. 

After all, you go where your audience goes. 

Goal Orientation

Any steps you take in a business should be toward the completion of a particular goal. Likewise, Facebook Ads should also be carried out with a goal in mind. Facebook gives you a variety of goals/objectives to choose from – Engagement, Awareness, Conversion. 

Depending on where you are in the marketing funnel, decide which course of action you need to take with your Facebook Ad and choose accordingly. 


There’s Solutions to each type of Ad you might want – 

  • Boost – Boosting a post works well with increasing the engagement on the particular post. 
  • Page Ad – This is useful for when you want people to know that your page exists and to have them follow it. 
  • Website Ad – This diverts attention towards your website, thereby increasing web traffic and awareness about the same. 
  • CTA button – There are a few options when it comes to the CTA button below your Ad. Gives any potential customers the clear next step. 
  • Leads – You can collect information about interested leads. 
  • Conversions – You can have potential customers take action and actually convert on your website or app. It could be downloading a free product, signing up for your newsletter or purchasing your product/service. Make sure to use the Facebook Pixel feature to track and measure the conversions. 
  • Awareness – Help your brand increase awareness by getting your Ad in front of potentially interested customers. 

Scalable Ads

Fun fact about Facebook Ads? Depending on where you create the Ad and the type of Ad itself, you can advertise Facebook Ads across other social media platforms like Instagram, Messenger and the Audience Network. So, your audience doesn’t even have to be on Facebook to see your Ad! 


Have we told you about Facebook’s sophisticated targeting features? 

There’s targeting options that include the demographic, likes, preferences, age, gender and behaviour among other things. There’s also the Lookalike feature that requires you to put in a few parameters. Facebook then creates a similar looking audience and uses that for targeting purposes. 

Measure and Track

Along with options on creating the Ad, Facebook has tracking and measuring tools that you can use to determine the effectiveness of the Ads. There’s insights you can read along with other metrics provided by the platform. 

Is It Your Money’s Worth? 

Ever wondered if there’s a particular day or time that’s right for Advertising on Facebook?

Notice how the CPC is comparatively cheaper on the weekends. The same trend was spotted in 2019 as well. However, the difference between the weekday and weekend fluctuations were a bit of a blur in 2019, starting from the rise of COVID-19. 

Regardless, the fluctuations aren’t substantial enough for you to base your decisions off of them. The day you post does not matter as much. So then, what does?

Base your Ad decisions on the campaign objective. An incorrect objective is the equivalent of shooting in the dark. So focus on an objective incentified campaign and watch your Ads perform. 

Good news is that conversion CPC has gone down consecutively through the first three quarters of 2020 as seen above. Now, keeping in mind 2018 and 2019 stats, there will be a slight increase in Q4 but it’s nothing astronomical. 

Monthly Facebook Ad Costs

On an average, companies have a monthly budget of $200 to $800. This is only a yardstick for budgets and not for the success of your Ad campaign. Depending on the size of your establishment, you might want to spend outside of these limits depending on your capacity and decision making. 

Yearly Facebook Ad Costs

An average yearly spend on Facebook Ads is $2400 to $9600. There are a number of factors influencing your budgeting decisions. The amount of Advertising budget you want to spend on Facebook depends on how useful the platform can be for you. 

For some businesses, a major portion of their sales happen via Facebook Ads. In this case, these businesses will spend a major chunk of their Advertising budget on Facebook Ads. The same might not be the case for all companies. 

Your goals, social media marketing strategy, size of the business, budget, all of these factors influence your decision making. 

Want to Optimize Facebook Ads?

Here are some strategies to help you optimize Facebook Ads for your brand – 

Purchasing Behaviour

In 2013, Facebook forged partnerships with data brokers like Epsilon, Acxiom, and Datalogix. 

These partnerships gave Facebook the leverage of having access to much more consumer data points. Suddenly Facebook Advertisers had access to buyer profiles and better targeting at their disposal. This influx of data gave Advertisers the perfect forum to reach out to potential consumers using Facebook’s Advertising feature. 

The Type of Ad

Choosing the right type of Ad for your requirement is half the game. The first selection is based on your goal for the ad – 

  • Awareness 
  • Engagement 
  • Conversion 

Once you’ve picked this out, you’ll move onto the mode of presentation. Will your audience see your ad as a – 

  • Story 
  • Carousel Post 
  • Video Post 
  • Image Post 

Experiment with this feature and see which format works best with your audience. 

Life Events

Do you know how to update any Life Events in the respective part of your Facebook profile? Well the digital marketers of the World thank you for that. Here’s why – 

Choosing a Life Event appropriate to your product/service is one among the targeting options on Facebook. Examples range from a wedding venue in the time duration of someone who got engaged or services catering to the wedding itself. 

Ad Creatives

The creatives you set aside for your Ad have to be specifically aligned to your goal for the Ad and to potential customers. The type of creative you choose to go with matters as well. 

According to the chart, a creative with entertainment value is going to be your best bet. Other aspects of the creative you should look out for: 

  • Make it a video 
  • Use a clear CTA 

Custom Audience

Ads aren’t always for new customers. Sometimes, they are made for existing customers in order to improve order frequency and lifetime customer value. Now wouldn’t it be simple if there was a separate option for when you only wanted the Ad to appear in front of your existing customers? 

The Facebook Custom Audiences option allows you to import customer info and build a Custom Audience using that. You can select this option for when you want to advertise to your existing database. And you have the option of leaving them out of it as well. 

Best of Both Worlds

Don’t mind us, we’re just reminiscing. 

Coming back to it, go for the two pronged approach. Grow your brand organically and via Advertising. This way, you’re doing everything in your power and reaping benefits from both strategies. Once the Advertising brings in your new customer, it is up to your Organic social media strategy to build a connection with your followers. 

Lookalike Audience

A no brainer in ideation and execution. You simply have to click on the option and Facebook creates an audience similar to your existing one. This is definitely something you should use while targeting your customers. 

Go Nuts with the Targeting

Yes, we’re bringing it up again. C’mon, the Facebook Targeting options are worth being mentioned a couple hundred times. The features are so detailed, you can target even a single person. Demographics, behaviour, interests, location, net worth and the list goes on. 

Better Together

The fun part is when you play with other kids in the park, right? To optimize your Facebook Ads, go beyond using it as a standalone advertising strategy. Pair it up with Google Ads and sync the two to work wonders for your brand. 

Hurrah! We’ve Done It

How do you find out if you’ve succeeded? 

You guessed it right! Analytics and Tools. 

It’s important to base the success of a campaign on substantial metrics. There are metrics that are used often when calculating the success of an Ad. They are called vanity metrics and they include – 

  • CPM – Cost per 1000 impressions 
  • CTR – Click through rate
  • Views 
  • Impressions 
  • Likes 
  • Shares
  • Comments 

And while all of these metrics are surefire positive for your brand, they don’t necessarily imply action. It doesn’t give you monetary benefits or change your ROI. 

What does, then? Factors like converting on a lead, reducing overall ad spend, frequency and ROI matter. They’ll tell you exactly how successful your ad campaign is. 

And to get access to such data, you can head over to Facebook Ad Reports

In conclusion, yes, Facebook Advertising is effective even today and you should consider setting aside a portion of your overall Ad budget for this. 


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