The first step on any campaign is to create your advertisement. On the top right of your Facebook page you'll find a "Create Advert" option under the settings button as is shown below.
You'll be taken to a page where you choose who you want to create the advert for; usually you'll be selecting a page for which you are an admin. If you are an admin on multiple pages then select the page you want to create the campaign for.
Facebook has some great tools for pointing you in the right direction when creating ads (they want your money after all so if anything they've made it easier to create ads than to use their sometimes knotty free features). Once you've arrived on the ad creation page there are helpful links all over the place to guide you through the process but I've included a few screenshots here to show some of the features.
Below is the section where you enter the content of your ad. You want a short, snappy headline; Some concise, informative text; and an eye catching picture. Make sure the picture is bi enough to fill up the space available or your ad will look undersized. You also have a choice of where your ad will direct people to. A common one is just to direct people to your page's Timeline but equally useful is to have the ad directing to a competition app that you've set up or had set up for you.
After the basics of what the ad will look like you can choose to target your campaign. The first and most useful tool is to target people by location, age and gender as is shown below. If you are a local business you can make sure you are only targeting locally and in your target demographic.
From there you can also target by specific interests or platforms that your potential customers might be using. This one is a great idea in theory, and it certainly explains to me why Facebook is always so keen to get me to fill out the "Interests" section of my page, but not everyone with those interests will have filled out that section. If you make your target particularly narrow you may miss some potential customers. Having said that there are a lot of people who have filled out the interests sections so if you target those areas you can be sure you'll be going after enthusiasts. This could be a great strategy if you're on a smaller budget and have a clearly defined target demographic.
The final part of setting up an ad is the pricing. It is incredibly simple to do. You just need to set a budget (either per day or for the whole campaign) and set how long you'd like to run the campaign for. It can be a little annoying as it didn't seem to let me select any non-USA time zones for my scheduling but it isn't all that difficult to subtract 19 hours to get California time. Once you've chosen your budget you enter your payment details and go from there. Any time you want to come back and make changes you can and you'll be provided with some great reports on your ongoing campaign.
The ad you've created will appear on the side of your target's Facebook feeds and should look similar to the ones below. A little something that appears on the right hand side of Facebook feeds. Facebook also gives you a "Sponsored Story" when you create an ad. This is just an item that pops up in the news feeds of people who fit your target criteria and are friends of people who have already 'liked' your page. This can be a particularly powerful tool as it acts as a sort of referral system directing new people to your Facebook page.
So that's Facebook ads. Fantastic little tools for promoting your message on what is an almost ubiquitous platform these days. Have a look and try them out for yourself. You won't be charged unless you enter payment details so you can have a play around for free quite easily. You might be surprised what you can do.