How does Facebook Advertising Work?

July 2018
By:
Justin Anderson

We’ve all seen sponsored Facebook posts show up in our news feed. And we’ve also likely seen the “Boost Post” button when we post on a page. The reality is the majority of those ads, which accounted for $36.4 billion of revenue in 2017, were created in Facebook Ad Manager.

Ad Manager is a separate website from the consumer Facebook you visit everyday. It’s designed specifically for advertisers to create and manage ads across Facebook, Instagram, and Facebook’s Audience Network (3rd party websites and apps).

When advertising on these platforms there are three components to understand:

1. Campaign

The campaign is the envelope, or container that keeps everything in a nice tidy package. It’s where we set our objective, the thing we want to have happen.

Objectives include sending traffic to a website, having people watch a video, buy a product, and generating leads on an email list.

2. Ad Set

An Ad Set is contained within a Campaign and defines who we want our ad to reach. We can target basics such as location, gender, and age. As well as more complex characteristics such as interests, income level, and behaviors.

We can also create custom audiences based on website traffic or interactions with previous content (i.e. anyone who watched one of your videos in the past 30 days). Look-alike custom audiences can also be created from a customer or member list. Facebook matches a broader set of people to target based on traits of current members.

Budget, placement and date/time are also set within the Ad Set.

Placement includes where the ad will be shown (i.e. Facebook news feed, right column, Instagram, Messenger, etc..).

You can have multiple Ad Sets within a Campaign.

3. Ads

The Campaign is what we want to have happen (our objective), Ad Set defines who we want to target and where our ads are shown, and Ads define what we want them to see (the creative).

The two most common types of Ads are video and image. Components of each Ad includes: Headline, News Feed Link Description, Website URL, Image/Video, Button text, and main text.

Learning Phase

As your ads run, Facebook learns who is interacting with them to meet your desired objective (which is defined in the Campaign). For example, if they find that 35 year old women with 4 kids, 2 boys, 2 girls, who drives a Chrysler mini-van and love Elvis is responding to your ad, they’ll automatically show it to more people like that. This is called the learning phase and it only happens within your defined Ad Set.

The takeaway is - the more you run a campaign, the more data Facebook collects to make better decisions, resulting in better outcomes (i.e. more video views, more sales, etc..)

The Process

There are two approaches to Facebook Advertising. The first is minimal involvement, you build a Campaign once, give it a small budget and let it go. You get what you get. Maybe its great, maybe it’s not.

The other approach involves actively managing your Campaign. To start, we build out Campaigns based on our research and best assumptions. We create ads and start the campaign, letting it run (and learn) for a week. From there we look at the data and make adjustments, or optimize the Campaign continuously.

It's entirely likely that the ads you end up with looks completely different that what you started with.

A Campaigns' success depends on variables like: 

  • How good is your offer?
  • Do people want what you have?
  • Is your image and copy compelling? 
  • Are you reaching the right people?
  • Are they having a bad day today?

You get the point..

Options

The cost for managing your Facebook Campaign per month depends on:

  • How many ads you want to run
  • Size of ad budget
  • How much optimization you want us to do (how active you want us to manage and tweak ads/ad sets),
  • Where do your Facebook ads link to (if you’re promoting an event and need an event landing page with registration, that needs to be built)
  • Duration of Campaigns (i.e I want to run 7 three day campaigns, or 1 30 day campaign)

We believe marketing should be a force for good, bringing value to people when they need it most. Facebook ads should be helpful information delivered to the right person to provide them value - not spam! 

Bottom line, advertising on Facebook is a process. It’s fluid. Before spending money you better know why you’re doing it, which means you better have a well defined objective that’s measurable. An example of this might be, “Im showing this ad, to these people, to get them to my landing page, where they sign up for my email list, where I send them down a drip campaign, to eventually introduce them to your product”.