Facebook and Instagram can put your business in front of almost anyone in the UK. That is the opportunity and the problem. Show your ads to the wrong people and your budget disappears with nothing to show for it. Show them to the right people and even a small budget can bring a steady flow of enquiries.

This guide explains Facebook ads targeting for small businesses: every audience type Meta offers, how targeting has changed with Advantage+, the approach we use first for local clients, and the mistakes that waste money.

How Facebook ad targeting works in 2026

Meta’s targeting has changed a lot in the last few years. Privacy changes reduced the data advertisers can use, and Meta now leans heavily on its own machine learning. In practice, that means:

• You still choose where people live, their age range and, in some cases, interests.
• Meta increasingly treats your choices as suggestions and will show your ads more widely if it thinks that will get better results (this is Advantage+ audience).
• Your ad creative now does a lot of the targeting. The image, video and words decide who stops and engages, and Meta learns from that.
• Good data from the Meta Pixel and Conversions API is what lets Meta find the right people.

The main types of Facebook ad audience

Location, age and core audiences

The basics: where people live or are, their age, gender and language. For local businesses, location is the most important setting. Use a radius around your premises or service area, and choose people who live in or have recently been in the area.

Detailed targeting (interests and behaviours)

Interests, behaviours and demographics, such as “interested in home improvement” or “recently moved”. Useful for narrowing things down, although Meta may expand beyond them if it finds better results elsewhere.

Custom audiences

People who already know you. This is usually the highest-value targeting you can do:

Related reading: combining PPC and social media ads

• Website visitors: people who visited your website or specific pages, tracked by the Meta Pixel.
• Customer lists: uploaded email addresses or phone numbers of existing customers, where you have permission to use them.
• Engagement audiences: people who have interacted with your Facebook page, Instagram account, videos or lead forms.

Lookalike audiences

Meta finds new people who are similar to one of your custom audiences, such as your best customers. A 1% lookalike in the UK is the closest match; larger percentages are broader.

Advantage+ audience

Meta’s AI-led option, where you give suggestions and Meta finds the people most likely to take the action you want. It often works well once your tracking is solid and you have good creative.

Our approach for local businesses: retargeting first

For most local clients at Delivered Social, we start with retargeting: showing ads to people who have already visited the website, engaged with the page or watched a video. These people already know the business, so they are far more likely to enquire, and they usually cost less to convert.

A simple local structure looks like this:

1. Retargeting campaign: website visitors from the last 30 to 90 days, plus Facebook and Instagram engagers, shown a clear offer or reason to get in touch now.
2. Prospecting campaign: people in your area who have not heard of you, using broad location targeting or lookalikes of your customers, with eye-catching video that builds awareness.
3. Feed the loop: people who watch your prospecting videos or visit your site then join your retargeting audiences.

Retargeting needs enough people in the audience to work, so very small or brand-new businesses may need to start with prospecting to build those audiences first.

Related reading: how Facebook ads charge you

How to set up Facebook ads targeting step by step

1. Install the Meta Pixel and Conversions API so Meta can track visits, leads and sales. Without this, custom audiences and optimisation are weak.
2. Choose the right objective in Ads Manager: Leads for enquiries, Sales for online shops, Awareness for reaching as many local people as possible.
3. Create your custom audiences in Audiences: website visitors, page and Instagram engagers, video viewers and customer lists.
4. Create a lookalike of your best custom audience, such as past customers.
5. Set your location carefully: radius, postcodes or towns you actually serve.
6. Add exclusions so you do not pay to show “new customer” offers to existing customers.
7. Choose placements: Advantage+ placements usually find the cheapest results across Facebook, Instagram and other Meta placements.
8. Launch, then leave it to learn for at least a week before making big changes.

Our guide to setting up a Facebook ad campaign covers the set-up in more detail.

Special ad categories: when targeting is restricted

If your ads are about housing, employment, credit or financial products, or social issues and politics, Meta requires you to declare a special ad category. That limits targeting options, such as age, gender and some detailed targeting, to prevent discrimination. Estate agents, recruiters and lenders need to plan for this.

Common Facebook targeting mistakes

• Too narrow: stacking lots of interests until the audience is tiny and expensive.
• Too wide for a local business: showing ads across the whole UK when you only serve one county.
• No exclusions: paying to reach people who are already customers.
• Ignoring warm audiences: spending everything on strangers and nothing on people who already know you.
• Changing everything too often: resetting Meta’s learning before it has had a chance to work.
• Weak creative: expecting targeting to fix an ad people do not want to stop for.

How to tell if your targeting is working

• Cost per lead or sale is falling or stable as you spend more.
• Frequency (how often the same person sees your ad) stays reasonable. A rising frequency with falling results means the audience is tired.
• Lead quality is good: the people enquiring are in your area and want what you sell.
• Retargeting audiences are growing because prospecting is bringing new people in.

For what to expect on budget, see our guide on how much Facebook ads cost in the UK.

Frequently asked questions about Facebook ads targeting

What is the best targeting for Facebook ads?

There is no single best option. For most local businesses, retargeting people who already know you is the most cost-effective starting point, alongside broad local prospecting with strong video.

Is interest targeting still worth using?

It can help, but Meta often expands beyond interests now. Many advertisers get better results with broader targeting and better creative.

How big should a Facebook audience be?

Big enough for Meta to find results. For local businesses that might be tens of thousands of people in your area. Very small audiences tend to be expensive.

Do I need the Meta Pixel?

Yes, if you want website retargeting and want Meta to optimise for enquiries or sales.

Can I target my competitors’ customers?

Not directly. You can target interests related to your industry, but you cannot target people simply because they are customers of a specific business.

Reach the right people, not just more people

Facebook ads targeting is less about finding the perfect interest and more about getting the basics right: accurate tracking, a sensible local area, warm audiences first, good creative and the patience to let Meta learn.

If you would like help setting up or improving your campaigns, our Facebook and Meta ads team can help. Get in touch, or find more practical guides on the Delivered Social website.