If you're running Facebook ads for your small or medium business, you've probably experienced the frustration of spending money on ads that don't convert. The culprit? Poor targeting. With over 2.96 billion monthly active users on Facebook, the platform offers incredible reach -- but without proper targeting, you're essentially throwing darts in the dark.

Today, we're diving deep into seven proven Facebook ads targeting techniques that will help you reach your ideal customers, reduce wasted ad spend, and boost your return on investment.

Why Facebook Ads Targeting Matters More Than Ever

Facebook's advertising platform generates over $117 billion in annual revenue, largely because it offers advertisers unprecedented targeting capabilities. However, recent iOS updates and privacy changes have made precise targeting more challenging. According to Meta's own data, advertisers saw an average 15% increase in cost per acquisition following iOS 14.5 updates.

This means getting your targeting strategy right isn't just helpful -- it's essential for survival in today's competitive landscape.

1. Master Core Audience Targeting

Core audiences form the foundation of your Facebook targeting strategy. These audiences are built using demographic information, interests, behaviors, and location data that Facebook collects from user profiles and activities.

Demographics That Drive Results

Start with the basics but be strategic about it. Instead of targeting "all women aged 25-65," narrow it down based on your customer data. For example:

  • Age ranges that align with your actual customer base (check your Google Analytics)
  • Education levels relevant to your product or service
  • Life events like new jobs, recent moves, or anniversaries
  • Relationship status when relevant to your offering

Interest-Based Targeting

Facebook tracks user interests based on page likes, post engagement, and website visits. Here's how to leverage this effectively:

  • Layer multiple interests using "AND" logic rather than "OR" to create more qualified audiences
  • Test competing brands as interest targets -- people interested in your competitors are likely prospects
  • Use Facebook's interest suggestions, but validate them with small test budgets first

Pro Tip: Use Facebook's Audience Insights tool to discover additional interests and behaviors associated with your current customers.

2. Leverage Custom Audiences for Higher Conversions

Custom audiences consistently deliver higher conversion rates because they're built from people who already know your brand. Studies show that custom audiences can achieve conversion rates up to 10 times higher than cold audiences.

Website Custom Audiences

Install Facebook Pixel on your website to create audiences based on visitor behavior:

  • All website visitors (great for brand awareness campaigns)
  • Product page viewers who didn't purchase
  • Cart abandoners (highest conversion potential)
  • Past purchasers (perfect for upsells and repeat purchases)

Customer List Audiences

Upload your email lists, phone numbers, or customer IDs to create highly targeted audiences. Facebook typically matches 50-70% of quality email lists.

Best practices for customer list audiences:

  • Use your most recent and engaged email subscribers
  • Segment lists by purchase history or engagement level
  • Regularly refresh these audiences to maintain accuracy

3. Harness the Power of Lookalike Audiences

Lookalike audiences help you find new customers who share characteristics with your best existing customers. Facebook's algorithm analyzes thousands of data points to identify these similarities.

Creating Effective Lookalike Audiences

Start with your highest-value source audiences:

  • Top 10% of customers by lifetime value
  • Email subscribers who've made multiple purchases
  • Website visitors who spent significant time on your site

For audience size, start with 1% lookalikes (most similar to your source) and scale to 2-3% as you increase budget. Audiences larger than 5% typically show diminishing returns.

Lookalike Audience Optimization

Test multiple source audiences simultaneously. A local restaurant might create separate lookalikes based on:

  • Delivery customers
  • Dine-in customers
  • Catering clients

Each will likely perform differently and reveal unique insights about your customer base.

4. Geographic Targeting Beyond Basic Location

Location targeting goes far beyond selecting cities and states. Smart geographic targeting can significantly improve your campaign performance.

Advanced Location Options

  • People in this location: Best for local businesses serving residents
  • People recently in this location: Great for tourism or event-based businesses
  • People traveling to this location: Perfect for hotels, restaurants, and tourist attractions

Radius and Exclusion Strategies

For local businesses, test different radius sizes around your location. A pizza restaurant might find their sweet spot is 3 miles, while a specialty retailer might need a 15-mile radius.

Use location exclusions to avoid wasted spend. Exclude areas where you don't deliver or where competition is too fierce to be profitable.

5. Behavioral Targeting for Purchase Intent

Facebook's behavioral targeting uses data from both on and off-platform activities to identify users likely to take specific actions.

High-Intent Behaviors to Target

  • Online shoppers by category (fashion, electronics, home goods)
  • Frequent travelers (for travel-related businesses)
  • Small business owners (for B2B services)
  • Recent device purchases (for accessories and complementary products)

Seasonal Behavior Patterns

Adjust your behavioral targeting based on seasonal trends. Tax preparation services should target "tax-related activities" behavior starting in January, while fitness businesses should focus on "health and fitness" behaviors in January and pre-summer months.

6. Device and Platform Targeting

Where and how people access Facebook affects their likelihood to convert. Mobile users behave differently than desktop users, and this impacts your targeting strategy.

Device-Specific Strategies

Mobile-first approach works for most businesses, as 98.3% of Facebook users access the platform via mobile devices. However, consider desktop targeting for:

  • B2B services requiring longer consideration periods
  • High-ticket items where users research extensively
  • Services requiring form completion or detailed information

Placement Optimization

While Facebook's automatic placements often perform well, manual placement selection can improve results for specific campaign objectives:

  • Facebook and Instagram feeds for engagement
  • Stories for brand awareness among younger audiences
  • Messenger for customer service-oriented businesses

7. Advanced Targeting Combinations and Exclusions

The most successful Facebook advertisers don't rely on single targeting methods -- they layer multiple targeting options and use strategic exclusions.

Layering Targeting Options

Combine different targeting types for more precise audiences:

  • Demographics + Interests + Behaviors
  • Custom Audiences + Geographic restrictions
  • Lookalike Audiences + Interest exclusions

Strategic Exclusions

Exclusions are just as important as inclusions:

  • Exclude existing customers from acquisition campaigns
  • Exclude competitors' employees
  • Exclude users who've already converted in the past 30 days

Measuring and Optimizing Your Targeting

Great targeting requires continuous optimization. Monitor these key metrics to evaluate targeting effectiveness:

  • Cost Per Click (CPC): Lower CPCs often indicate better audience relevance
  • Click-Through Rate (CTR): Higher CTRs suggest your targeting aligns with your creative
  • Conversion Rate: The ultimate measure of targeting success
  • Cost Per Acquisition (CPA): Balance reach with efficiency

Use Facebook's split testing feature to compare different targeting approaches with identical creative and budget allocation.

Getting Started: Your Next Steps

Implementing these targeting techniques doesn't have to be overwhelming. Start with these three immediate actions:

  1. Install Facebook Pixel if you haven't already and create custom audiences based on website behavior
  2. Upload your email list to create a custom audience and corresponding 1% lookalike audience
  3. Audit your current targeting to identify areas where you can add strategic exclusions

Remember, effective Facebook advertising is an iterative process. Start with these fundamentals, test systematically, and refine based on performance data. The businesses that succeed on Facebook are those that view targeting as an ongoing optimization opportunity, not a "set it and forget it" task.

Your customers are on Facebook -- these targeting techniques will help ensure your ads reach them at the right time with the right message.