If your local business is not online, you are missing out on a huge portion of the audience and customers. Among all the tools in the digital marketing section, Facebook Ads work best for small or big businesses for fast growth. If you are going to run ads for your local business, you need to keep some crucial information in mind before creating the ad campaign. Step by step, I will tell you what ad settings might work best based on your business type.

If you’re new to Facebook Ads, don’t worry! This blog will walk you through everything you need to know.

Why Should Local Businesses Use Facebook Ads?

Almost everyone is on Facebook today, and the platform allows you to target the right audience in your area. Facebook’s AI algorithm has become so advanced that it can let you choose who to show your ad to and who not to show it to. You can target specific genders, races, ages, interests, and even behaviors based on what type of service or product you are trying to sell.

Another advantage of Facebook Ads is that they are cost-friendly. While traditional promotion can take a considerable amount of money only for brand awareness, you can use Facebook Ads for just $5 and still see results.

The plus point is that even if people don’t buy from you immediately, seeing your brand’s ads regularly will help them remember you. This also works best for brand awareness.

How to Create a Facebook Ad for Your Local Business

GOAL: before starting to create meaningless Facebook ads for your local business, I need you to ask yourself these four questions:

1. Do you want them to visit your physical store?

2. Are you looking to grow your website traffic?

3. Do you want more people to call or message your business?

4. Or do you want to sell them your service?

If you want them to visit your physical store, then running awareness-type content would be best for you. Suppose someone is running ads for his gym, which is located in Cheltenham town, England. That person is not trying to sell anything online because his business is about the gym. His only purpose would be to let Cheltenham know people that his gym exists there, and if they want to join any gym in the future or are looking for a gym right there, they would visit the gym in their area. In this case, an awareness campaign would be the best option for running ads.

But if you are looking to grow traffic to your website, then running a traffic campaign is best.

An Engagement Campaign in Facebook Ads is designed to increase interactions with your posts or page. This includes likes, comments, shares, event responses, or boosting overall post visibility to encourage audience engagement and build social proof.

A Sales Campaign in Facebook ads drives conversions, such as purchases, sign-ups, or other actions that directly generate revenue. It targets users likely to complete transactions on your website, app, or store. If you are trying to sell something on Facebook,Facebook, running a sales campaign will give the best outcome.

Creating an ad campaign is relatively easy. First, you need to log in to your Ads Manager. If you don’t know how to make a business page and Ads Manager, click this YouTube video. After logging into the Ads Manager, click “Create”:

After clicking “Create,” you will see several options for the type of campaign you want to run. You’ll notice categories like awareness, traffic, leads, engagement, app promotion, and sales. We discussed earlier which campaign would be best for your business. If you can define your goal by answering those four questions, choosing an option from these will be easy for you.

While optimizing your ad budget, you will see the option for a lifetime budget for an ad. However, I recommend choosing a daily budget limit. This allows you to adjust the daily spending on an ad based on its performance.

This section is important if you have a local business. For example, if someone owns a gym in Cheltenham Town, they likely narrow the audience by selecting Cheltenham Town as the location. This ensures that only the people in that area will see the ads.

This is beneficial for the business because if the ads were shown all over England, people from distant areas might see them. However, it wouldn’t make sense, as no one would drive a long distance from another part of the country to work out at a specific gym just because they saw an ad on Facebook. Only the people in Cheltenham would show interest since the gym is within their range and close to their homes.

But again, this can vary. Suppose Lina has a clothing shop in the same town as Cheltenham and wants to sell her products online through Facebook. She started running Facebook ads for her business but didn’t specify the location of her ads. By default, her ads are shown all over England. Eventually, she gets an order from another part of the country, 50 km from her town. It’s not a problem because she can use a courier service to deliver the product.

So, try to understand whether your local business is limited only to your town or city or if you can serve customers beyond that area.

1.5 years ago, I would have advised you to use a custom audience. However, in 2025, Facebook’s AI algorithm has become more powerful than ever. The Advanced + Audience AI targeting system is now far superior.

Previously, Facebook marketers would spend 50% of their time fine-tuning this section, but now, thanks to AI, this effort has been reduced to just 5%. Let Facebook decide who to show your ad to. Facebook’s AI can now accurately identify people most likely to buy your product.

If you’ve run ads before from your business page, you might already have existing audience data. Use this data to create a Lookalike Audience on Facebook. These audiences may include people who visited your page or website or added products to their cart but never completed the checkout process.

Once everything is ready, launch your ad and monitor its performance through Facebook’s Ads Manager.

In today’s competitive market, relying on traditional methods like word-of-mouth or flyers isn’t enough. People spend more time online, especially on platforms like Facebook, where they scroll through posts, watch videos, and discover businesses like yours. By not leveraging Facebook Ads, you’re leaving many potential customers untapped.

Facebook Ads have an unbeatable advantage in local businesses. They let you target your specific audience accurately, whether by location, interests, or buying behaviors. This means you’re not wasting money showing ads to people who are unlikely to visit your store or use your service; instead, you’re reaching the people who are most likely to become your customers.

Another great advantage of Facebook Ads is the flexibility: from low budgets to higher budgets, it’s all quite accessible without necessarily having to break the bank. You test a few ads, learn what works for you, and scale accordingly. That also gives you the possibility of making real-time modifications, having all the relevant information on the campaign’s results, to optimize and increase performance.

However, with a local business, the whole concept of Facebook Ads changes: it’s not about the product or service but the establishment in your community. Each time they see the ad, they remember your business is there to serve them. This creates trust and builds brand recognition, increasing their likelihood of choosing you when they need what you offer.

It will take time to happen, but with consistency in effort, creativity, and strategy, Facebook Ads will work wonders for your local business. Whether to keep your stores filled with people, bring visitors to your website, or even spread the word, this platform is your all-in-one means of survival in the digital age.

Why wait? Start exploring the world of Facebook Ads, begin to experiment, and watch your local business grow. The opportunity is within your reach—seize it!