How Facebook Ads Actually Work (And Why They Still Convert in 2025)

The Basics: What Are Facebook Ads?

Facebook ads are paid promotions that appear across Meta’s ecosystem: Facebook, Instagram, Messenger, and the Audience Network. Businesses can choose to display these ads in users’ news feeds, stories, reels, and other placements.

These ads are powered by Meta Ads Manager (formerly Facebook Ads Manager), where you can create ad campaigns, define your goals, select your audience, set your budget, and monitor performance.

How Facebook Ads Work (Step-by-Step)

Let’s break down the process:

1. You Set a Campaign Objective

You’ll first choose your marketing goal (e.g., awareness, traffic, leads, sales). This informs how Meta will optimize delivery. For example, a Facebook lead generation ad shows differently from a brand awareness campaign.

2. Define Your Audience

Meta’s targeting tools let you segment by:

• Demographics (age, gender, language)

• Location (geo-targeting, even by postcode)

• Interests and behaviors (based on user activity)

• Custom audiences (like website visitors using the Facebook Pixel)

• Lookalike audiences (Meta finds users similar to your existing customers)

This is how Facebook targeted ads work to zero in on people most likely to convert.

3. Budget & Bidding

You set a daily or lifetime budget, and Meta runs an ad auction to decide who sees your ads. This is not just about the highest bidder — your ad quality, relevance score, and expected engagement also influence the outcome.

Here’s how Facebook ad auctions work:

• Each time there’s a chance to show an ad, Meta runs a real-time auction.

• It weighs bid amount, ad relevance (click-through rate, user feedback), and estimated action rate.

• The highest "total value" wins the placement — not always the highest bidder.

4. Ad Creative

This is where your visuals and messaging come in. You can run:

• Single image or video ads

• Carousel ads (multiple images/videos)

• Dynamic creative ads

• Lead form ads (users submit info without leaving Facebook)

• Instant Experience ads (a full-screen mobile landing page)

Your ad must capture attention and clearly convey value.

5. Measurement and Optimization

With tools like Facebook Ads Manager, you track:

• Impressions

• Clicks

• CTR (click-through rate)

• Conversions

• Cost-per-click (CPC)

• ROAS (Return on Ad Spend)

You can A/B test ad variations, adjust targeting, refine messaging, and retarget users using Facebook Pixel data.

The Facebook Ads Algorithm (2025 Update)

Understanding how the Facebook ads algorithm works is critical. It decides:

• Who sees your ad

• When they see it

• Where it shows up

Meta considers:

• Your campaign objective

• Your audience settings

• Real-time bidding competition

• Ad engagement and feedback

• How aligned your ad is with user behaviour

The better your ad aligns with what users engage with, the less you’ll pay per result.

Why Facebook Ads Still Work in 2025

Even with rising competition, Facebook paid ads continue to perform because of:

✅ Hyper-targeting Capabilities

Custom audiences, lookalike targeting, interest layering — it’s all designed for precision.

✅ High Visibility at Low Cost

Compared to other ad platforms (like Google), Facebook ads cost per impression or per click remains competitive, especially for visual-first campaigns.

✅ Full-Funnel Marketing

From brand awareness to lead generation and remarketing, Facebook supports the entire buyer journey.

✅ Omnichannel Reach

You don’t just show up on Facebook — your ads also reach Instagram, Messenger, WhatsApp, and off-platform sites via the Meta Audience Network.

How Much Do Facebook Ads Cost?

There’s no fixed rate — it’s a bidding system. However, in 2025, averages look like:

• Cost per click (CPC): S$0.40 to S$1.20

• Cost per lead: S$2 to S$20 depending on industry

• Cost per 1,000 impressions (CPM): S$7 to S$18

Your actual cost depends on:

• Competition for your audience

• Quality of your ad

• Campaign objective (leads vs clicks vs reach)

Common Misconceptions About Facebook Ads

• ❌ "Boosting a post is the same as running an ad"
  ➤ Boosting is limited. Full campaign setup in Ads Manager allows better targeting and optimisation.

• ❌ "Facebook ads don’t work anymore"
  ➤ When targeted correctly and optimised regularly, they still produce some of the best ROI in digital marketing.

Conclusion: Are Facebook Ads Right for You?

If you're looking to get your product, service, or offer in front of a precise, engaged audience — Facebook ads are one of the most cost-effective tools available in 2025.

But success isn’t guaranteed. You need the right targeting, budget strategy, creative execution, and ongoing optimization.

🚀 CTA: Need Help Setting It Up Right?

At BLOAT Media, we specialize in Facebook advertising strategy, lead generation, and conversion-focused campaign management. Whether you’re just getting started or want to scale efficiently, our team can help.

Contact us to launch your first Facebook Ads campaign