Facebook ads can be a powerful tool for small businesses. With millions of users and flexible ad formats, you can promote your business in a way that fits your goals. In fact, 68% of American adults use Facebook—more than almost any other platform.

Whether you want to build awareness, drive website traffic, generate leads, or boost sales, there’s a Facebook ad that fits. This guide breaks down the main ad types and helps you choose the right one for your business.

Why Facebook Ads Are Essential for Small Businesses

With over 3 billion monthly active users and $164.5 billion in ad revenue in 2024, it’s clear that Facebook delivers. More than 10 million businesses—mostly small or mid-sized—advertise on the platform.

Why? Because it works. Even with a small budget, you can reach the right audience. The average cost per click is about $0.77, and conversion rates average 8.8% across industries. It’s one of the most cost-effective ways to market your business.

Facebook Ads Manager lets you target by location, age, interests, behavior, and more. A bakery can reach dessert lovers nearby. A boutique can target fashion-conscious shoppers. You’re not just advertising—you’re reaching potential buyers.

And since Facebook and Instagram share the Meta Ads Manager, you can run ads on both platforms at once—saving time and expanding your reach.

Facebook Ad Objectives vs. Ad Formats

When creating a campaign, your first step is choosing an objective—your business goal. Facebook offers options like Awareness, Traffic, Engagement, Leads, Sales, and App Promotion.

• Want to build your brand? Choose Awareness.
• Need website visitors? Go with Traffic.
• Looking for sign-ups or contact info? Use Leads.

Each objective tells Facebook how to deliver your ad—whether to people likely to click, watch, or fill out a form.

Next, choose your ad format—how your ad will look and engage people. Facebook offers several options like images, videos, carousels, and more. The right format depends on your goal.

Let’s explore the most common ad types and how to use them effectively.

Types of Facebook Ads and When to Use Them

1. Image Ads

The classic Facebook ad format—a single image with a short caption. Simple, effective, and quick to create.

Perfect for promoting a product, sale, or service. A clear message and high-quality visual can stop the scroll and get attention.

Best for: General promotions, brand awareness, or when you don’t have video.
Example: A café posts a tempting photo of its best-selling coffee to attract more walk-ins.

2. Video Ads

Videos grab attention—and with 40% of Facebook and Instagram time spent watching videos, it’s a format worth using.

Use short videos to show how something works, share testimonials, or tell a quick story. No need for a big production—a smartphone video or animated slideshow can do the job.

Best for: Building awareness, educating, or connecting emotionally.
Example: A bakery shares a 10-second video of a cake being decorated to drive interest and clicks.

3. Carousel Ads

Carousel ads let users swipe through multiple images or videos, each with its own headline and link.

Great for showcasing a product line, highlighting features, or telling a visual story in steps.

Best for: Product catalogs or step-by-step storytelling.
Example: A travel agency runs a carousel with five destinations, each linking to a tour package.

4. Collection Ads

Mobile-only and built for e-commerce. A main image or video appears on top, with product images below. Tapping opens a fast, full-screen shopping experience within Facebook.

It’s like a mini digital storefront that keeps users in-app while they browse.

Best for: Mobile shopping and product discovery.
Example: A cosmetics brand features a video of models using products, followed by a catalog for instant browsing.

5. Lead Ads

Designed to collect contact info—quickly and seamlessly. When users tap, a pre-filled form opens within Facebook.

They’re ideal for service businesses, B2B brands, and anyone offering quotes, sign-ups, or gated content like e-books or coupons.

Best for: Capturing leads without sending users off-platform.
Example: An insurance agent offers a free quote through a lead ad. Users tap, fill out the form, and submit—no website needed.

6. Stories Ads

Stories ads appear between user-generated Stories across Facebook, Instagram, and Messenger. They’re full-screen, vertical, and highly immersive.

Ideal for time-sensitive offers, event promos, or visual content. Just keep it short, vertical (9:16), and visually strong.

Best for: Quick, full-screen promotions and younger audiences.
Example: A boutique promotes a 24-hour flash sale with a bright, animated Stories ad.

7. Messenger Ads

Messenger ads appear in inbox feeds or as click-to-Messenger ads that open a chat. Great for starting real conversations with leads or offering customer support.

Works well for businesses that sell through 1-on-1 interaction—like realtors, coaches, or service providers.

Best for: Customer service, consultations, and warm lead follow-up.
Example: A cleaning service runs a Messenger ad saying “Have questions? Chat with us now,” leading to bookings through conversation.

8. Dynamic Ads (Retargeting)

Dynamic ads automatically promote products to people who’ve already viewed them on your site or app. They pull from your catalog and use the Facebook Pixel to track behavior.

These ads are powerful for retargeting, upselling, and reducing cart abandonment—because you’re reaching people already interested.

Best for: Recovering lost sales and boosting conversions.
Example: A sporting goods store shows users the same shoes they browsed, with a “Shop Now” button.

Pro Tip: Always Use a Strong CTA

Every ad should include a clear call-to-action—like “Shop Now,” “Book Today,” “Sign Up,” or “Send Message.” A strong CTA tells people what to do next and increases response.

Facebook Ads vs. Instagram and Google Ads – A Quick Overview

Facebook ads automatically run on Instagram too, using the same Meta platform. Instagram leans younger and is more visual—ideal for fashion, food, or lifestyle brands. Facebook reaches a broader audience, making it great for general targeting.

Compared to Google Ads, Facebook excels at building interest among people who aren’t actively searching. Google Ads work better for catching users ready to buy.

In short:

• Use Facebook/Instagram to attract and engage.
• Use Google Ads to capture high-intent searchers.

For most small businesses, using both platforms—strategically—offers the best return.

Final Thoughts

Facebook ads give small businesses the tools to reach the right people with the right message. The key is simple: match the ad type to your goal.

Start small. Test what works. Let the data guide your strategy.

Whether you’re growing awareness, driving sales, or collecting leads, there’s a Facebook ad that fits. With clear goals and smart choices, your ad budget can go further than you think.

Sources:

1. Pew Research Center – Social Media Use (cited via Hootsuite 2025 report): 68% of U.S. adults use Facebook.

2. Sprout Social – Facebook stats 2025: Facebook has 3.06B monthly users and made $164.5B in ad revenue in 2024.

3. AdExchanger – Facebook has 10 million active advertisers (mostly small businesses).

4. Sprout Social – Facebook advertising benchmarks: strong average performance and 40% of marketers rank Facebook a top ROI driver.