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With a user pool of close to a billion, Facebook is a valuable marketing tool for businesses–and not surprisingly, a potentially expensive one. Advertising on the internet has always been on both ends of the scale, with small ventures getting by on a few dollars a day and others investing hundreds of thousands. But the amount of competition on Facebook means that you have to pay a premium–in time, effort, and mostly money–to set yourself apart.

So how much does it really cost to market on Facebook? It depends on how you’re going about it.  For instance, if your goal is to get subscribers, you can expect to pay around $1.07 for every person who likes your page. This takes into account the advertising that gets people to like: ad space, ad time, copy, and images.

It’s not as simple as that, though. The more popular you get, the more expensive it becomes to maintain that level of popularity. A page with over 300,000 likes can therefore cost well over $320,000 to keep up. This is why it’s important to think of conversion: without making sales, you can’t afford to keep those fans coming. For the most successful businesses, the returns are more than worth it.

What about the pay-per-click system, which is used by about half of the companies in North America? Many companies use this in addition to free self-made fan pages. Here, the cost varies by industry. According to Flowtown, a social media marketing firm, healthcare advertising is the most expensive, followed by Internet products, telecommunications, and financial services. Travel and e-commerce are among the cheapest. This could be a result of the number of bidders in a particular industry–the more competition there is for a spot, the bigger the bids become. The prices range from 31 cents to $1.27 per click, which, when scaled up to the thousands, ends up being a big investment.

The next important question is perhaps how to get your money’s worth. Maximizing Facebook’s marketing value requires a good understanding of market behavior. People like pages because they get exclusive access to information, incentives (discounts and freebies), interesting content, and interaction from the company itself. In other words, you don’t want to be just spewing out sales talk. Put as much effort as money into building a community and creating a feeling of belonging, and you’ll end up with a much more valuable fan base.

Some of Facebook’s decisions may have raised a few eyebrows, from the Timeline format to their information-sharing policies. But on the marketing side, most of the changes have been for the better. Facebook marketers now have more tools to help better manage their pages, monitor their content, perform analytics, and get better results. If you haven’t been keeping up, you’re missing out on a lot of new functionalities. Here are some new features you may want to check out, and how they can fit into your campaign.

Assigning administrators: Many companies’ Facebook pages have grown from a small side project to a full-fledged marketing channel, and social media marketing departments have grown as a result. The administrative role feature, accessible from the Edit Page option, helps delegate tasks into five categories: management, content, moderation, advertising, and analytics. It’s a great tool for fast-growing businesses that rely heavily on social media presence, even if they don’t have a fixed social media team.

Post scheduling: Facebook posts can now be treated like blog posts, in that they can be published (or “shared” in Facebook lingo) at preset dates. This was previously possible through third-party apps, but being able to do it from Facebook itself saves time and reduces the risk of lag. It’s also a lot easier: all you have to do is click on the clock icon on the sharing options panel, and enter the time and date the post should go up. You can pre-schedule posts up to six months ahead, and you can add photos and videos as well.

Post promotion: The idea behind post promotion is similar to that of premium ads on eBay, where you pay more to make your item (or in this case, your post) more visible. The fee, which starts at $5, will be visible not only to people who have liked or commented on the post, but also to their friends. This option only works for pages with at least 400 likes, and is also accessible from the sharing options menu. You can also promote previously published posts provided they’re less than three days old.

These features are free and user-friendly, but surprisingly few page owners use them to their full potential. Many still waste time on manual posting and pen-and-paper analytics. But while good content and community building are still central to Facebook marketing, knowing and using the right tools can go a long way in increasing your bottom line.

Getting an advertising campaign off the ground is simple, especially with platforms like Facebook making everything intuitive. Where your marketing savvy comes in is turning all those likes and click-throughs into conversion–in other words, making money off the whole venture. Unfortunately, that’s where a lot of people stumble.

So how do you increase your Facebook conversion rate? Avoiding the following common mistakes can go a long way.

Messy landing pages: Your Facebook ad campaign can achieve one of three goals: it can generate traffic, create brand awareness, and create involvement. In any case, the landing page determines whether people end up buying or write the site off as just another Facebook page. They expect to see the same thing on your Facebook and your official website–it looks more streamlined and therefore lends credibility.

Reach out to new fans: The Internet has made consumer demographics a lot less static, and reaching out to just one group can make you miss big opportunities. A company’s typical customers can change or expand from time to time, and it’s important to find out who these new people are. If your buyers are usually young professionals, you may also want to market to people who have something in common with them, whether it’s an interest, an industry, an age group or a location.

Manage your budget: Facebook’s bidding system forces advertisers to put their money where they think it’ll go the farthest. Your competitors are targeting the same group of people, so you should decide where to be most competitive. Do you want to set a higher limit for yuppies, or do you expect to get a better return on university students who might spend more time on Facebook (but may have less buying power)? Some of the factors you may want to look at are how long the users spend on each page, how much buying power they have, and how many of their peers show interest in the same products.

Match your traffic patterns: If your ads lead to your website instead of a Facebook page, consider setting them up so that they are most visible during your peak traffic hours. That way, you spend the most money at hours where you typically get the most conversion. Many people have to do this manually by tracking each ad, but you can use third-party tracking tools to save some time–especially if you’re running several ads.

Facebook marketers often make the mistake of treating Facebook like Google Ads, and migrating the entire process from one to the other. One key difference between these two is that Google Ads targets users based on keywords, while Facebook is based on demographics. What this means is that although the same people might be targeted, the best way to get the message across may be different. In particular, Facebook marketing requires you to do a bit of demographic research–at least if you want good, fast results. How do you do this? Here are some of the main approaches and how you can use them.

Search engines: Besides Google, you can use Bing and Yahoo to find user information channels. Simply type in the top keywords for your product or service–this may require a different kind of research–and take note of the top-ranked sites. You can then look up demographic information for these sites separately. The sites are not necessarily your competition; some of them can be blogs, news feeds, and e-commerce sites selling related products.

Google Insights: One of the best ways to optimize your keyword research is Google Insights. This tool allows you to monitor and compare trends for a given keyword or topic, and in particular where the main keyword searches are coming from. You can then figure out which geographical locations have the strongest interest in your service, and target your Facebook marketing efforts accordingly.

Google Ad Planner: Ad Planner bolsters your geographical information with data on users’ interests, age groups, and other key aspects. Use the list of top websites from your search engine research and enter each URL into Ad Planner to get information on each site’s visitors. You can also find out which sites these users often visit, and which keywords they tend to search for.

Quantcast: This tool does much of the same things as Ad Planner, but tends to give more in-depth results. For instance, you can get such information as the typical user’s educational level, income, and ethnicity. Use it to power your ad planning with more specific user data, and create more targeted Facebook content.

Microtargeting: This is a fairly new term that basically means targeting small groups of users whose interests are (or might be) related to your product. For example, if you’re building an ad campaign for a used book store, you may want to look for Facebook pages of local school suppliers or school clubs, and refer to these connections in your text. This approach guarantees the reader’s interest while also widening your advertising options.

Facebook’s popularity has forced e-commerce retailers to change their marketing approach. Instead of targeting individual users within a given profile, companies now market to these people’s social circles. The idea is not just to connect to the person, but to generate interest in the people they interact with.

To a certain extent, it’s about getting likes and increasing popularity. But it’s also largely about establishing and maintaining a social presence, something that will drive current and future marketing campaigns–and ultimately bring in sales. In other words, businesses will need to integrate e-commerce into their Facebook pages in order to sell more.

The easiest way to do this is through a Facebook shopping cart, which is easy to find from third-party developers. These are basically Facebook apps that give your page a storefront, allowing your users to buy directly from your Facebook page (instead of clicking through to your official site). Look for a simple, user-friendly interface, and go for a look that’s consistent with your main website so as not to confuse buyers.

One thing to remember about Facebook e-commerce is that users have to be able to finish the transaction without leaving Facebook. Otherwise, you lose the social appeal of the system, which is what makes it so effective. Perhaps more importantly, you want to make it look and feel secure. Your Facebook page should integrate the same methods you use on your site, whether it’s PayPal or credit card–it tells users that they’re not getting any less by transacting on Facebook.

It’s also important not to overlook the “social shopping” mood that Facebook affords. The beauty of social networks is that people can share their activity with others, which means more potential publicity for companies they deal with. Make it easy for them to tell their friends where they were and what they bought. If you can, offer rewards (discounts, exclusive offers) to people who click the like and share buttons.

Finally, remember that it’s just as much about sales as it is about image–and the image you want is that of a friendly, accessible company that doesn’t push its products in people’s faces. This means no hard-sell copy, no mass emails, and no news feed-clogging updates. Instead, add a personal touch to your page, such as a look into the making of a product or introducing your design team. It works much better than sales talk, and the clients you get are likely to hang around long after the sale.