How do Facebook ads work? A complete guide to costs and creation

Facebook continues to dominate social media, giving businesses of all sizes an incredible advertising platform that reaches billions of people worldwide. The platform’s smart targeting options make it perfect for companies wanting to connect with their ideal customers. We’ve seen firsthand at Click Consult just how dramatically Facebook campaigns can boost our clients’ marketing results, however, getting your head around how they actually work can be tricky if you are new to digital marketing.

In this guide, we walk you through everything you need to know about Facebook advertising – from the basic campaign structure and figuring out costs, to measuring what’s working and creating your own high-performing ads. Whether you’re just dipping your toes in or looking to sharpen your approach, this comprehensive guide will help you navigate Facebook’s advertising world with confidence.

What is an ad campaign on Facebook?

A Facebook ad campaign is a structured approach to advertising on the social media platform, organised into three distinct levels that work together to create a comprehensive marketing strategy. At the foundation level is the campaign itself, where you establish your primary advertising objective. Facebook offers a range of objectives across three categories:

• Awareness (including brand awareness and reach)
• Consideration (encompassing traffic, engagement, app installs, video views, and lead generation)
• Conversion (focusing on catalogue sales, store visits, and conversions).

The middle tier consists of ad sets, where you define crucial elements like your audience, budget, schedule, and placement options. This is where Facebook’s powerful targeting capabilities shine, allowing you to select demographic information, interests, behaviours, and even create custom audiences based on existing customer data. You can establish multiple ad sets within a single campaign to test different audiences or approaches while maintaining the same overall objective.

At the most granular level are the individual ads – the creative units that users will actually see in their feeds and across Facebook’s platform network. Each ad includes creative elements such as images or videos, accompanying text, a headline, description, call-to-action button, and destination URL. This three-tiered structure allows advertisers to organise their efforts logically while testing different approaches systematically.

Here at Click Consult, our social marketing experts have found that maintaining the same objective at the campaign level while testing different audiences across multiple ad sets, or experimenting with various creative approaches within a single ad set, often yields the most insightful results.

How much do Facebook ads cost?

One of the most common questions we hear is about Facebook ad costs. The truth is, there’s no one-size-fits-all answer because Facebook uses an auction system where you’re essentially competing with other advertisers for space.

The primary pricing models you’ll encounter include:

• Cost per Click (CPC) – You pay when someone clicks your ad (typically £0.40-£1.60 in the UK)
• Cost per Mille (CPM) – You pay per 1,000 impressions (around £5.50-£8.00)
• Cost per Action (CPA) – You pay when users complete a specific action like signing up or purchasing

What affects these costs? Several factors come into play. Your industry matters a lot – finance and insurance typically cost more than retail or entertainment due to higher competition. How specific your targeting is can impact price too, as narrower audiences sometimes cost more to reach. Ad quality makes a big difference too – Facebook rewards relevant, engaging ads with lower costs. And don’t forget seasonal factors – prices often jump during Black Friday and Christmas when everyone’s competing for attention.

The good news is you have plenty of control over your spending. You can set budgets to cap your daily spend, lifetime budgets for entire campaigns, or even bid caps to control how much you’re willing to pay per result.

Our experience at Click Consult shows that UK advertisers typically see CPCs around £1.35 and CPMs around £6.75, but these numbers vary widely by industry. The key is continuous optimisation – testing, learning, and refining to get the most bang for your buck.

Do Facebook ads work?

Simply put – yes, when done right! Facebook ads can deliver impressive results, and our client success stories prove it.

What makes Facebook advertising so effective is its targeting precision. The platform’s vast user data means you can pinpoint your ideal audience with remarkable accuracy – whether that’s based on demographics, interests, behaviours, or even their past interactions with your brand.

The numbers speak for themselves. Advertisers see average conversion rates of 8.75% across industries, with some sectors like Industrial & Commercial and Dental Services enjoying even higher rates (12.03% and 9.83% respectively).
Facebook ads work for all kinds of objectives too. Want to build brand awareness? You can reach thousands of people for around £6.00 on average. Looking for leads? Lead generation campaigns cost on average £4.90 ($6.49) per lead.

How to create Facebook ads

Creating effective Facebook ads doesn’t have to be complicated, but it does require careful planning and strategic thinking. Here’s how to get started:

First, set up Business Manager to centralise your marketing activities. This platform helps you manage pages, ad accounts and team permissions in one place.

Next, define your campaign objective. Whether you’re aiming for awareness, consideration or conversions, this fundamental choice shapes everything that follows.

When building your audience, leverage Facebook’s powerful targeting tools. Create core audiences based on demographics and interests, custom audiences from your existing customer data, or lookalike audiences that find users similar to your best customers.
For your budget, choose between daily limits or lifetime campaign spending. Start conservatively if you’re new to Facebook advertising – successful campaigns can always be scaled up later.

Creating compelling ad creatives is where many campaigns succeed or fail. Use attention-grabbing visuals, concise benefit-focused copy, and clear calls-to-action. Always install the Facebook pixel on your website to track performance and gather vital optimisation data.

While this process might seem straightforward, the reality is that Facebook’s advertising platform grows more sophisticated and competitive each year. Many businesses find that expert support makes all the difference between moderate results and exceptional ones.

At Click Consult, we’ve helped countless organisations navigate the complexities of Facebook advertising, from technical setup to advanced audience targeting and creative optimisation.
Our specialists stay on top of platform changes, industry benchmarks, and emerging best practices so you don’t have to. Whether you’re launching your first campaign or looking to improve existing performance, professional guidance ensures your Facebook advertising investment delivers the strongest possible return.

Get in touch today to find out more.