We have a limited budget to begin advertising on Facebook and from all the stuff I've read it looks like the key is filtering down the target audience to find profitable segments.
What are some tricks and tips you guys are using? How do you guess what type of people will likely convert?
Here are some things I keep in mind when using FB ads:
1. Instead of driving traffic to your homepage or generic category page, create a specific landing page.
The landing page's content should match what your Facebook as was about or promoting. Relevancy pays in conversions. Use a larger version of the same image you used in the Facebook ad. This gives a user a feeling that they're in the right place.
2. Run separate campaigns that also target your competitors' fans.
In most cases these tend to be the highest converting. Why? Because these are people who have already bought or liked a similar product that you're selling.
3. Target by job roles.
Apart from the run of the mill targeting options, you can narrow it down further by segmenting based on people's current job roles. If your product is a social media tool, then target people with marketing job roles. Here is a list of roles on Wikipedia.
4. Target by zip codes. Figure out where your target audience would live.
If your product is a high value item that only the rich can afford, segment further based on zip codes with the highest income brackets. If your product targets college students, compile a list of zip codes of campuses and dorms, and segment those.
5. Use GlassDoor and other sites that list salaries to get your target cities.
Have a product for programmers? Just look up top cities on GlassDoor and that's a good starting point if you don't want to get granular with zip codes.
How do you guess what type of people will likely convert?
You have to analyze your product to really understand. For example, if you are selling baseball tickets, think about your target demographic. Are they more likely to be male or female or both? What is the average age of a baseball fan?
Luckily you could find these statistics from sites online or trade journals that deal with you target audience.
As you mentioned, the key really is filtering down into smaller and smaller segments that would be the most target demographic for your product.