Essential Guide to Paid Ads for Small Businesses

Melissa F. | December 15, 2023
10 mins

As a small business, you may think there are more than enough expenses stretching your budget, so paid advertising can wait.

But the opposite is true — paid ads ensure you show up in search results to get in front of the right people and attract more customers. A recent study showed that online advertising can give you a 200% return on investment.

And you might think that you have too much on your plate as a small business owner to get your head around paid ads, which can be tricky if you don’t have the experience or time to dig deep.

The good news is there are convenient tools now available, making ads for small businesses easier than ever before. From pretested, AI generated ad content, to helping you to spend wisely with transparent budget control, the help is now at hand without you having to break the bank on an advertising agency.

This guide will help you get to firm grips with paid advertising, so you can make the most of your budget while growing your business.

How Do Paid Ads Work?

In a nutshell, you pay to place ads on popular online platforms, where they get seen by a high volume of people, like on Google, Facebook, and Instagram.

Most paid ads are Pay-Per-Click (PPC). That means you don’t pay for the ad placement, you only pay when people click on your ad. Cost per click can vary depending on your industry, region and keywords, but usually ranges between $1 to $2. And to put that in perspective, in 2022 the return on investment for PPC was $2 earned for every $1 spent.

Here are the main types of PPC advertising:

Search Ads

By choosing the right keywords, your ads will appear at the top of a search results page, above organic rankings.

With Google currently owning 92% of global search and getting over 99,000 inquiries per second, you’ll definitely want a piece of that action using Google Ads.

Social Ads

You can target all sorts of audiences on social media platforms like Meta and X (Twitter). Your ads will appear in their personal feeds, based on their preferences, friends, location, and more.

Facebook ads have a 9.21% conversion rate. With an average of 3% being considered good in the marketing industry, Facebook is currently the highest converting platform available. And knowing there is good conversion gives you a good estimate of how much money your ads are likely to generate.

Display Ads

These are banner ads that appear on websites. They’re designed to be visually eye grabbing, using images, videos, and interactive elements. A great way to boost brand awareness.

Display ads tend to be cheaper per click (around the $0.1 range) because they’re less effective at conversion than typical ads. But since they go out to a wider audience who can 'see them for free', they’re an effective way of introducing people to your product, especially if it has keywords that are not a search term commonly used.

Learn more from Google about best-practise for creating Display Ads.

Retargeting / Remarketing

Ads that target people who have previously visited your website, but did not buy anything. They will show up as people browse other social platforms and websites.

Within each audience platform, there are different permissible ad formats. Here are two examples:


  • Image and video — a single image or video, along with a short headline and a call-to-action button.
  • Carousel — showcase multiple images or videos in a single ad, so you can better explain your offer. 
  • Collection — showcase multiple products within a single ad, and link to a full-screen view of the products.
  • Slideshow — create a video-like experience using multiple still images.
  • Instant Experience — create immersive, full-screen content within the Facebook app.


  • Brand Takeover — full-screen image or video ads that display when a user opens the app.
  • Branded effects — special effects that are created by brands, which people can use in their own videos.
  • Hashtag Challenge — encourage users to submit their own videos using a branded hashtag.
  • In-feed — full-screen image or video ads that appear in the main feed of their app.

Benefits of Paid Ads for Small Businesses

Here’s a summary of why paid ads should be a budget priority for your business: 

  • Fast Results — unlike SEO which takes time and can be suddenly affected by factors that are out of your control like a change in algorithms, PPC ads are launched within minutes, and can drive traffic to your website almost immediately.
  • Spending Wisely — with paid ads you only pay for results i.e. clicks to your website or instant purchases. Using an Ads Manager, you’ll also easily be able to keep track of what you’re spending and set limits, so it never becomes a runaway train.
  • Brand Recognition — with the online space being increasingly noisy, paid ads help to ensure your business gets seen. People can’t fall in love with your brand if they don’t know you exist.
  • Audience Targeting — another great feature of paid ads is you can choose to display them only to the people you know are most likely to buy from you, based on their search histories and preferences. With social platforms, you can finetune your targeting by age, gender, Likes, location, and more.
  • Valuable Learnings — paid ads get rid of the guesswork on a number of fronts. They’re especially good for giving you analytics and data to clarify your performance, so you can keep improving and test out what works best with customers.

    Data sets include average cost-per-click, impressions (how many times your ad was displayed on a platform), views (the number of people who took an action after seeing the ad),  click-through rates, lead conversion rates, shares, comments, likes, and bounce rates (the percentage of site visitors who left after viewing only one page).

Tips for Advertising Success

First let’s look at some general Golden Rules for effective PPC campaigns:

Set Clear Goals

Do you want to build brand awareness, boost your website traffic, generate leads, or increase sales conversions? Clear goals will help you decide which type of PPC ad, platform, and type of campaign will give you optimal results.

This clarity will also help train the algorithms to bring you more of the same placements achieved the conversion goals you defined. For example, you can define conversion as more visits to your website, or an add-to-cart purchase. The platform algorithms will analyze the defined conversions and try to target more of the same type of customers to optimise your campaign.

Target the Right Audience

The more you pay attention to search keywords and demographics, the closer you’ll get to the people who are looking for exactly what you offer. This will maximize your ads spend, and by delivering what people are looking for you’ll earn happy customers.

Learn more about targeting:
Five General Tips
Meta Ads
Google Ads

Monitor Performance

Make sure you keep an eye on your data results, while also testing different ad formats and audience targeting options. You’ll want to make sure you don’t spend money on ads that aren’t converting, or conversely don’t spend enough on ads that are. Eventually you’ll be able to streamline your ad budget to deliver the optimal return on investment.

Different Content Versions

You need attention grabbing content to stand out from the online noise. Then you’ll want to constantly test out different versions of headings and descriptions and illustrations, to see what works best with your audience. 

This may seem dauntingly time consuming, but the good news is an Ads Manager tool like RelateAds gives you AI generated variations based on successful competitor content. So it’s all done for you, simply choose from the list presented and do a final fast edit to tailor the ads to your business.

Optimize Your Site

There’s no point driving traffic really well, if people get to your site and are underwhelmed, or find it hard to navigate and find what they want. If your ads are getting lots of impressions and clicks, but low conversions, it’s a clear sign you need to optimize your landing pages or spruce up your site.

And if your bounce rate is high, it indicates to Google that your ads aren’t relevant to customers, meaning you run the risk of Google dropping them to a lower position.

Now let’s cover the main Google Ads mistakes, and what you can do instead:

Know Your Budget

Bear in mind that only you know your business, and what you can spend to break even with your spend. All too often Google Ads become a runaway train, especially if you’re also unclear about who your audience is. An Ads Manager tool can help immensely, with real-time performance insights and spend limits you can set to prevent overspending.

As a general rule of thumb though, until you’re more experienced at advertising and have performance data to support your budget amount, you shouldn’t spend more than $10-$20 per day to start off. Your goal in the beginning should be gathering data, which will direct you in finetuning your ads until they convert well.

Test and Test Some More 

A common pitfall is to setup a Google Ads campaign, get average results, then run it again. This is understandable because small businesses are typically time poor.

But the most successful campaigns are the result of constant testing and tweaking, based on performance data. Constant testing is how you end up with high performance campaigns. Think of testing as one of the main benefits of advertising, not as a hassle.

Finetune Keywords

There are different types of keyword matches you can choose from, namely Exact, Phrase, or Broad (meaning your ad will be displayed even if someone searches for a phrase similar to your target phrase). A good Ads Manager tool will allow all types of match options.

A Broad match can work when you want to gather data, but if you select this option in the long term, you’ll easily find yourself burning through your ad spend without a good return on investment. On the other hand, if you don’t know your audience (with data to back it up), an exact match setting can deliver poor results because you’ll potentially be missing out on large audiences that are ready to buy. 

Quality Ad Content

Providing you’re targeting the right audience, if your ad content is good, meaning it’s immediately appealing and clear, you’re bound to convert well. A tip here is to use up every character of text that Google allows to make your ad enticing.

Another tip is to research what ads in your industry perform well. Or you can go the smart route, and have an Ads Manager do it for you, with AI generated ads based on high performing content, and insights on competitor activity.


Paid advertising gets you in front of people, so they become aware of your brand and what you offer. This gives small businesses a chance to compete with larger or more established companies that have bigger marketing budgets on a more level playing field.

Although emails and SEO have the benefit of reaching a wide audience, that doesn’t mean they reach the right audience, who are genuinely interested in what you offer. The beauty of paid paid ads for small businesses is they help you identify and target those people.

Most online paid ads are Pay-Per-Click (PPC), so you only pay for results. To achieve those clicks and get high conversions, you’ll need to do ongoing testing to find your audience, have high quality ad content that makes people want to click, and have landing pages or a website that makes them want to make a purchase.

Paid ads can be daunting to small businesses who are already time poor and have a tight budget. But they deliver a good return on investment and give you invaluable data to steer your marketing.

An Ads Manager tool like RelateAds fills in the gaps that may have put you off PPC. You get AI generated ads that are proven to work, easy variation testing, performance transparency, and everything conveniently in one Dashboard.

A quality Ads Manager also prevents you from overspending, by giving you spend limit options on your campaigns, the ability to pause them when it suits you, and insights on what isn’t working so you can keep improving. Wise budgeting, driven by data, is key to successful advertising. 


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Melissa F.

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