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Guide to Facebook Ads Part 1- Creating Profitable Audiences

Handy Guide to Paid Ads on Facebook – Part 1 Audiences

Creating Facebook Audiences The Right Way

Advertising on Facebook is something that most businesses realize is important, but many of them go about it all wrong and end up wasting lots of money trying to get things right.    I’m here to try to help you avoid making the mistakes that I see businesses making ALL THE TIME.
One thing I tell a lot of businesses (both large and small) is that before having a paid advertising strategy on social media, a solid content strategy is CRUCIAL. So, before jumping into paid ads, sit down and think about what kind of content your target audience will appreciate the most. For content ideas check out these two posts, “Simple Content Hacks for Creating Content People Love to Read: Part 1 and Part 2.   After you’ve created some good content and have made a content calendar, then you can start to think about paid ads on Facebook.


The biggest problem that most businesses face is that, when FB ads are not set up and/or managed correctly, you’ll burn through money quickly and never see an ROI. 


So, lets dive in!  Before you run any ads on Facebook, the first thing you need to understand is audience targeting.  It is CRUCIAL that you completely understand the different types of audiences, how they’re created and how to use them.  

Types of FB Audiences 

There are a number of different types of audiences on Facebook but the 3 main categories are interest-based, custom, and look-alike audiences.

I. Interest Based Audiences  

These audiences are created based on people’s locations, interests, demographics, and behaviors.  If you want to target all of the mother’s of toddlers in San Fransico who are interested in Breaking Bad, you can create an audience for that and have your ads/content shown to them.  Or if you want to target single, Chinese expats living in Canada who like fishing, you can target them as well. And a bit of useless info: on FB, there are 500-1,000 single, Chinese expats living in Canada who like fishing, while in the US there are 1,500-2,000.

Not only can you create these very specific audiences to target with ads, you can also see insights on them as well.  For example, the favorite artist of those single Chinese expats in the US and Canada is Vin Diesel, and their favorite sports are NBA and UFC.   You can get very specific or you can go very broad with interest targeting.  To make these interest-based audiences, the best way is to go to your business manager and click on Audience Insights, or you can do it via your ads manager if you don’t use FB Business Manager (or FB BM as I like to call it).

TIP: When creating your interest-based audiences, try to think about what interests would ONLY your target audience have that others wouldn’t have.  Example, if you sell skateboards, you wouldn’t target the interest, Tony Hawk, because lots of people who will never buy a skateboard love Tony Hawk or play his video games.  

One handy tool that I bought not long ago, and am loving is called  Audience Analyzer.  I have been using it for very fast audience research and creating lots of different effective audiences.  I’ve tried pretty much every audience and keyword research tool out there, and I like Audience Analyzer the best.

What is the best size for an interest based audience?  That depends on the niche you’re targeting, and the location and what your ad objectives are.  There is no one correct answer for this.  If I’m doing ads for a telecom company in India, my audiences are going to be much much larger than if I’m doing ads selling bowling shoes in Guam.  

II.  Custom Audiences 

Custom Audiences are divided into 4 main groups (and you can get to them in your Ads Manager:

custom FB audiences

  1. Customer File  – You can upload (or copy/paste) your customer’s emails or phone numbers to FB and they’ll create an audience from them.  One very cool new addition they’ve added is the ability to upload files that have a customer LTV options.  LTV is a value associated with your customers based on how much and how often they spend with your business over the course of their relationship with you. People with high LTV may be more expensive to acquire but lead to greater value over time.  Here is a template you can follow for uploading LTV customer files.
  2. Website Traffic  – Once you set up this audience, you just place your pixel on your website and all the people who visit your website will be added to your custom audience.  You can also do neat things like create an audience from people who visited certain pages on your website, but not others.  This is very important because you can create audiences from people who visited your pages, but never purchased anything (so you’re not wasting money targeting people who have already purchased what you are advertising).
  3. App Activity – If you’ve got an app on FB, you can easily create an audience from people who used your app.  Since most people reading this don’t have apps they’re promoting on FB, I’m not going to go into detail about this.  If you’re one of the few who do have an app that you’re promoting on FB, then just click the “App Activity” and select your app from the dropdown menu.  It’s so easy I don’t need to say more about it.
  4. Engagement  – There are 4 different ways to create audiences from people who have engaged on your FB page or content.  facebook engagement audiencesI highly suggest creating audiences from everyone who has engaged with your content, be it videos, lead forms, canvas, or your FB page.  After you create audiences from engagement (or any of the other ways for creating custom audiences) FB will ask you if you want to expand your audience, and you should always say YES!  Which brings us to our next audience type, Lookalike!

III.  Lookalike Audiences 

When you make any of the 3 types of custom audience (the ones I just covered), FB will ask you if you would like to expand your audience.  The answer should always be “YES”.  These audiences are basically just FB looking at all the details and interests and demographics of your custom audience, and then finding people who they think are almost the same.  I’ve had good results from lookalike audiences which is why I suggest giving them a shot.   When you make a lookalike audience, you’ll be asked for what percentage you want the audience to be; you can click on “advanced” at the bottom and then you’ll see how many people are in the audience based on what percentage you pick.



This is a very important part of being a successful marketer on FB.  Test with your interest-based audiences, test with your custom audiences and test with your lookalike audiences.  Test to see which ones get the best results for each of the different types of ad objectives (engagement, video views, conversions, traffic, etc…) and keep good records of your tests and your results.  If you find an audience that is getting great results, GREAT!  but keep testing to see if you can improve it!   Sometimes I’ll think I’ve got the perfect FB audience for my goal, but then I’ll test something else and get even better results.

Audiences are things that many small businesses attempting to market on FB get wrong, and if you’re targeting the wrong audiences, you’re wasting money.

Now that you know about the different audiences, it’s time to take action!  Go to your ads manager or business manager and start to create different audiences that you can start testing.


  1. Do audience research and find keywords that are specific to your target audience but not other audiences.  (Use Audience Analyzer if you want to save time)
  2. Create (and save) several different interests based audiences  in Audience Insights.
  3. Put an audience pixel on your website to start creating a custom audience from website visits
  4. If you have a customer file, upload it to FB to create an audience. (hint: using FB audience insights you can get some cool insights on your customer list)
  5. Create audiences from people who engage with your FB content and video views (See section II. part 4)
  6. Create lookalike audiences from all your other saved audiences.


The next part of this Handy Guide to running Paid Ads on FB will be about Ad Objectives and how to use them each to your advantage. 

If you would like much more in-depth, and over-the-shoulder training about Facebook audiences (and everything else related to marketing on Facebook) be sure to check out my Facebook courses. Each has 30 day money back guarantee, lifetime access, and available on mobile devices so you can learn on the go.  Facebook Marketing Masterclass    Facebook Apps For Businesses and Marketers     Social Media Hacks To Grow Your Business  








Brian Gray

I love digital marketing and everything that comes with it. Besides making money online, I'm also partner of a successful communications and digital marketing agency and my client list includes EU, UN, World Vision, Hennessy, Vespa, Corona Extra, Krispy Kreme, Canon, Total and Hyundai (just to name a few). I was in the education sector for over 13 years, and I loved it, but then transitioned into digital marketing and eCommerce (more freedom when you work online). I realized I didn't want to give up teaching, so I decided to teach online.

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