Facebook is a simple and effective way to drive traffic to your website. With daily billing to your credit card and daily spending limits, it’s an ideal way for small businesses with limited cash flow to effectively manage a web marketing budget.

In order to advertise on Facebook, you must create a user account. This can be your personal account, or one you create specifically for your business. Creating a page for your business will increase your presence on Facebook, and allow you to drive traffic there, or to your outside website.

Facebook advertising benefits from some highly specific targeting. You can find your ideal audience by limiting your ad plays by age, sex, location (country, state or city), marital status, education level, language, and other specific keywords of your choosing. For instance, you may only want to reach Spanish-speaking females between the ages of 14 and 18, currently in a relationship, who love “Twilight” and live in New York City. It’s a cinch with Facebook’s simple targeting system. They’ll even suggest additional keywords for you based upon your choices, allowing you to efficiently find your niche.

A bold image is a great way to draw the eye. Your image will be resized to fit into a 110 by 80 pixel box. It’s best to submit your image in this exact size, to avoid any cropping or distortion.

You can choose to pay for your ads by CPM (cost per one thousand impressions) or CPC (cost per click). Depending on your goal, CPC is the most direct way to track your ad’s performance, as you only pay when someone clicks on your ad and is directed to your website. Facebook will suggest a maximum CPC, and then allow you to choose your own maximum cost, and your daily spending limit. If your maximum CPC is well below their suggested rate, your ad will not display very often. If it is within or higher than their suggested rate, you’ll get more exposure, and therefore, more clicks.

Facebook provides fairly comprehensive statistics on how your ad is performing. They will let you know your average CPC and CPM, as well as how many total clicks and impressions you have received, and your total spend on each individual advertisement and campaign. This will allow you to focus on your most effective ads and keywords, and discontinue ads that are not performing as well.