Facebook ads are one of the most popular and inexpensive ways to promote a small business online. According to research from BIA / Kelsey LCM, 48 percent of SMBs (small and medium businesses) are using Facebook for advertising or promoting their business. Forty percent said they have a Facebook page just for their business.

1. Know Your Goals and Plan Around Them

The first step is understanding what you want accomplish. Some goals could include looking to build awareness of your company or brand, and driving traffic to your web site. Promoting a specific event or generating sales are other common goals.

To build awareness and grow your fan base (getting people to "Like" your page), there are standard marketplace ads. The ads point to your Facebook Page and allow users to "like" your page, using the Like link right in the ad. You also could try a "Page Like" sponsored story, where the ad shows friends who have liked your Page.

You can even target people who are friends with people who already "like" your Page, which creates a social context, that makes people much more likely to remember the ad's content.

When you want to promote a particular post from your page, such as a special offer or important news, you can also use "Page Post" sponsored stories to convert your post into a News Feed item.

Sponsored Stories is one of Facebook's newest marketing tool which prompts word-of-mouth recommendations about your business that are happening in the News Feed. You can sponsor stories about people checking in to your business or "liking" your Page.

Measure success by social media metrics. Click-through rate (CTR) is an important metric to track, but since the average CTR for Facebook ads is only about 0.05%, which is half the industry standard of 0.1%. Instead set goals to increase comments, Likes, impressions and active users. Facebook has hundreds of reports you can use to analyze results, make use of them for maximum results.

2. Targeting with Your Ads

When placing your Facebook ad, the form makes it very easy to select the demographic profile of your target audience. It has the added feature of the ability to target very specific audiences. Here, less is more.

Better results are achieved by having less very targeted people, rather than having large numbers of people who are not interested. Gaining smaller but very specific target audiences, even at the risk of reducing the size of your audience, can be more effective.

Let's say you want to promote an event at your business. It would be more effective to target people who are already fans of your page, who may be more likely to respond to aa local offer. Beside targeting people by location, you may want to also use names of popular local businesses, colleges and clubs into the ad manager to find the people that do not put their city and zip code in their profiles.

3. Choose Text and Images That Grab Attention

When designing your ad, you have up to 135 characters, but some of the most effective ads do not use the whole character limit. Use small and concise ads that speaks directly to the audience you will reach. Special offers or unique features that differiate you from the competition, are also effective. Facebook suggests using your company name in the ad title or somewhere in the body of the ad. A simple line can be the largest draw. It can be in the form of asking a question or making a bold or odd statement. Remember to include something that encourages users to click on your ad and explains to the user exactly what you expect them to do when they reach your landing page.

An image that will draw a person's attention to your ad is recommended. Logos in this case, may not be the best way to go. Since the photos are small, use something unusual or a face shot of people. Smiling women tend to generate a high click rate. Experts recommend trying natural photos with colors that contrast with the blue color scheme of Facebook, such as red, yellow and orange.

4. Use and Measure Multiple Ads

Create multiple versions of your ad and test them to see which ad gets the best response. Once an ad has been created, you have the option to "Create a Similar Ad", via the Facebook interface, and put in a new picture or text.

Experts recommend creating four different ads for the same campaign. Run each ad for a day or two and then check your ad statistics on Facebook to see which did best. You can then create a new ad that is similar to your ad that performed the best, with a few minor changes to see if it improves the ad's performance. Since these ads rotate constantly, keep changing the ads so that your specific target audience does not get disinterested.

Also, take top-performing ads and create new ad groups with related ad copy and pictures. This will lower your costs because your ad group has a higher CTR (Click Through Rate).

Facebook has hundreds of reports available, and it is wise to make use of them.

5. Be Ready To Get the Most Out of Your Traffic

Keep your Facebook Wall fresh and updated. Stale content, like the last Wall update was weeks or months ago, will make people lose interest. Give them a reward for visiting so they keep coming back.

Most people do not click through to your Facebook page; They click 'like' right in the ad. Have fresh status updates or special offers or events available that follow up on the content in your ads, and get people to keep coming back.

The click you get is not the end result, it's the beginning of presenting your campaign to your audience. When someone likes your page, you now have their consent to talk and update them over and over. Boundless opportunities can result by keeping them interested with fresh content, special offers, coupons and events, on an ongoing basis.