As of now, there are over 400 million people on Facebook, and that number is growing every day. Facebook can be a great way to reach out to potential customers, but only if you know how to find them. Facebook's advertising program is definitely worth checking out- it allows you to put small display ads in the right side of any Facebook page or profile. Right now, it doesn't have as high a response rate as Google's AdWords, but it is steadily growing. Setting up a successful Facebook advertising campaign is hard, but if you follow the steps below, it will be a little easier.

The first step you should take is to decide whether you want people to come to your business' web page or another page on Facebook, such as a fan page, an app, an event or a group. If you are the admin on your page, app, group or event, you can select from a drop-down menu. One good thing about using Facebook advertising to promote your business or event is that there is an "RSVP" or "Become a Fan" button right on the ad. Some business owners use Facebook as a way to get new fans, to engage customers once they've built trust. You don't get much space when you post a Facebook ad, so use it well. You only get 25 characters for a headline, and 135 for the ad. You'll also have the option to include a thumbnail image with your ad.

You'll need to set up a budget as well. Advertising Online on Facebook works a little bit like Google's AdWords, in the fact that you bid on competitive keywords to get your ads shown more often. There's a cost per click (CPC) option where you pay for every click, or a cost per thousand (CPM) model where you pay per 1,000 page views. Most emerging research shows that the CPC model offers a slightly higher return on investment, and to start your ad campaign you need to determine what you can pay per click and fix a daily budget. Both numbers can be set low to start, but you should adjust your expectations accordingly.

No matter how much you spend on CPC or CPM, you should always test your ads. There are online apps that make it simple to do. To be successful, you should create multiple versions of each ad, and once you do, you can create many similar ads quickly. Here's where the picture comes in- a good picture can make the difference between a good ad and a poor one. Be aware that your ads are moderated by Facebook, so familiarize yourself with their terms and conditions for advertisers.

When you've tested your ads, you need to start adjusting and tracking them. Facebook provides a tool that gives you some information on how your ads are performing- it's called Facebook Insights. With it, you can get information about the demographics of those clicking your ads, and figure out which keywords are the most competitive. Page administrators can use Insights by clicking on the appropriate link on the left sidebar. Facebook does allow the running of ads that direct people to sites outside Facebook, and to track these ads, you can monitor them with your own analytics application (Google Analytics is a fine choice). If you're using this application, use its URL builder to build a link to your page that contains trackers, and place that link in your ad.