Solved: Targeting Ultra-Small Audience Size Okay on FacebookAds?

Hi there,

Thanks for reaching out! I had a look at your question about retargeting a very small audience for your hospitality business. It’s a common thought process, trying to claw back those potential bookings you just missed. I'm happy to give you some initial thoughts and guidance on this.

Honestly, while the idea seems logical on the surface, you’re looking at the problem through the wrong end of the telescope. You’re asking about putting a small plaster on a cut, when we should be talking about why you’re getting cut in the first place and how to build a rock-solid strategy that avoids these situations altogether. Your focus on a tiny, sub-100 person audience is a symptom of a much larger strategic issue with how you're likely approaching customer acquisition.

We'll need to look at why your retargeting idea is a dead end...

Let's get your direct questions out of the way first, because the answer reveals the bigger picture. You asked if it's okay to target such a small audience, if the ads will run, and how quickly people get added.

To be blunt, it’s not okay. It’s a massive waste of time, focus, and money. Yes, technically, people enter a custom audience almost instantly after taking an action (like visiting a "sold out" page). And yes, Meta might try to serve ads to them. But "might" is the operative word. An audience of less than 100 people is well below the threshold for any kind of effective delivery or optimisation. The algorithm has nothing to work with. It can't learn, it can't find patterns, it can't optimise. You’ll get sporadic, unpredictable delivery, if any at all. It's like trying to fish in a puddle.

The real problem is the flawed logic. You’re assuming that someone who wanted to book for a specific Saturday, and couldn't, is now a hot lead for a Tuesday. They’re not. Their immediate need has passed. They were in a "last-minute booking" mindset. They’ve likely already booked somewhere else or made other plans. Your ad, showing up a day later offering them a different day, is just an irrelevant annoyance. You're paying to talk to people who have already stopped listening. Its a tactical dead end, and it distracts you from the real opportunity: proactively filling your capacity with the right people, well in advance.

This is a classic mistake – focusing on the tiny percentage of people you just lost, instead of the massive untapped market of people you could be attracting. Forget the 100 people who couldn't book; we need to build a machine that brings you a steady stream of thousands of potential customers.

I'd say you need to redefine your customer, not just chase them...

The single biggest mistake I see businesses make is defining their customers by shallow demographics. "Couples aged 30-50" or "Families in the South East" tells you nothing of value. It leads to generic, boring ads that resonate with absolutely no one. To stop burning cash, you have to define your customer by their pain. By their nightmare.

Your Ideal Customer Profile (ICP) isn't a demographic; it's a problem state. You need to become an obsessive expert in their specific, urgent, expesive frustration that your hospitality business solves.

Who are they, really?

• -> Is it the overworked couple from the city whose nightmare is another weekend of chores and Netflix, feeling disconnected? They aren't buying a "room for the night"; they're buying a chance to reconnect, a moment of peace, a romantic escape.
• -> Is it the frazzled parents whose nightmare is hearing "I'm bored" for the tenth time during the school holidays? They aren't buying "family accommodation"; they're buying guaranteed fun, happy memories, and a break from the parental grind.
• -> Is it the solo traveller whose nightmare is a soulless, corporate hotel chain? They aren't buying a "bed"; they're buying a unique experience, a sense of discovery, and a story to tell.

Once you understand this, your entire approach to advertising changes. You stop chasing website visitors and start targeting the problem itself. On platforms like Meta, you can find these people. You can target interests around "weekend breaks," "spa resorts," "fine dining," but you can also find the niche interests that signal their pain. People following luxury travel magazines, members of foodie groups, people with an interest in "stress relief" or "mindfulness."

Here’s how you should start thinking about it:

Doing this work first is non-negotiable. Without it, you have no business spending a single pound on ads. This intelligence is the blueprint for your entire targeting and messaging strategy.

You probably should rethink your entire advertising funnel...

Your idea of retargeting people who couldn't book is a Bottom of Funnel (BoFu) tactic. The problem is, you have no Top of Funnel (ToFu) or Middle of Funnel (MoFu) to feed it. You're trying to harvest fruit from a tree you haven't planted yet. We need to build a proper, structured funnel that guides a potential customer from being completely unaware of you to becoming a loyal, repeat guest.

This is how we structure campaigns for our clients, from eCommerce stores to service businesses, because the underlying customer psychology is often similar.

1. Top of Funnel (ToFu) - Prospecting the Dream

This is where you introduce your business to people who have the "nightmare" but don't know you're the solution. The goal here isn't an immediate booking; it's to plant a seed and make them aware of the experience you offer.

• -> Targeting: This is where your ICP work pays off. You'll build audiences based on detailed interests that align with your personas. For the "Escape Artist Couple," you might target interests like 'Boutique Hotels', 'Spa Breaks', 'Fine Dining', 'Conde Nast Traveler', layered with age and location demographics. Once your Meta Pixel has enough data, you can move to Broad targeting and let the algorithm find people similar to your existing bookers.
• -> Creatives: This must be aspirational. High-quality video is king here. A 30-second tour showing off the stunning views, the cosy fireplace, the delicious-looking food. It should sell the feeling, not the features. Use copy that speaks directly to their pain: "Tired of the city noise? Escape to tranquility."

2. Middle of Funnel (MoFu) - Fanning the Flames

These people have shown interest. They've watched your video, visited your website, or engaged with your Facebook page. They know who you are, but they're not ready to commit. Your job is to build trust and overcome their objections.

• -> Targeting: This is proper retargeting. Create custom audiences of 'All Website Visitors (last 30-60 days)', '50% Video Viewers', and 'Facebook/Instagram Page Engagers'. Crucially, you must exclude anyone who has already booked.
• -> Creatives: Now you get more specific. Show them user-generated content or testimonials. Run ads highlighting specific features that might be a deciding factor, like your pet-friendly policy, your award-winning breakfast, or a specific package deal. Create gentle urgency: "Planning a spring break? Our rooms for May are booking up fast."

3. Bottom of Funnel (BoFu) - Closing the Deal

This is for the hottest leads. People who have gone to your booking engine, maybe even selected dates, but for whatever reason, didn't complete the purchase. This is a much more valuable audience than the "capacity capped" group you were thinking of.

• -> Targeting: A tight custom audience of people who have triggered an 'InitiateCheckout' event but not a 'Purchase' event in the last 7-14 days. This is a small but highly motivated group.
• -> Creatives: Be direct. Give them a reason to come back and finish what they started. This is where a small, direct incentive works wonders. "Still thinking about it? Complete your booking now and enjoy a complimentary bottle of prosecco on arrival." It's not a discount; it's an added-value nudge.

Here’s a simplified campaign structure we might build to reflect this:

You'll need an offer that actually drives bookings...

The biggest failure point in advertising is often the offer itself. In the B2B world, the "Request a Demo" button is an arrogant, high-friction disaster. Your equivalent is a passive "Check Availability" button on a generic website. It presumes the customer has already decided and just needs to execute the transaction. This is rarely the case.

Your offer isn't just the room. It's the entire package you present. It must be crafted to feel irresistible and solve their underlying "nightmare". It must be more than just a bed for the night; it has to be a solution. This makes a complex service feel simple, tangible, and less riskey for a buyer to invest in.

We use a simple copywriting framework called Problem-Agitate-Solve (PAS) to build messages that can't be ignored.

• -> Problem: State the pain they're feeling, in their own words.
• -> Agitate: Poke the bruise. Remind them of the consequences of not solving the problem.
• -> Solve: Present your business as the clear, obvious solution.

Let's apply this to your personas:

See the difference? We're not selling rooms. We're selling the end result. We're selling the solution to their nightmare. This emotional connection is what drives action and makes people choose you over your competitors.

We'll need to look at what this will actually cost (and what it's worth)...

The question isn't "How low can my Cost Per Booking go?" The real question is "How high a Cost Per Booking can I afford to acquire a fantastic, long-term guest?" The answer to that lies in their Lifetime Value (LTV).

Most small businesses get obsessed with low upfront costs and miss the big picture. Let's do some simple maths that will change how you think about your budget forever.

Calculating Your Guest Lifetime Value (LTV)

We need three numbers:

1. Average Revenue Per Booking (ARPB): What's the average total spend for a single guest stay? Let's say it's £400 (including room, food, drinks).
2. Gross Margin %: After your direct costs of servicing that guest (cleaning, supplies, food cost), what's your profit margin? Let's be conservative and say it's 60%.
3. Customer "Lifetime" & Repeat Rate: How many times does a good guest book with you over, say, a 3-year period? Let's say your best guests come back once a year, so 3 times in 3 years.

Now, the calculation:

Gross Profit Per Booking = ARPB * Gross Margin % = £400 * 0.60 = £240

Lifetime Value (LTV) = Gross Profit Per Booking * Number of Repeat Bookings = £240 * 3 = £720

This means that over three years, a single good customer is worth £720 in pure profit to your business.

So, what can you afford to spend to get them?

A healthy business model aims for at least a 3:1 LTV to Customer Acquisition Cost (CAC) ratio. This means you want to spend no more than a third of the customer's lifetime value to acquire them.

Maximum Affordable CAC = LTV / 3 = £720 / 3 = £240

Sudenly, the game has changed. You can now confidently spend up to £240 to acquire a new guest through your advertising, knowing that they will be highly profitable over their lifetime. This frees you from the tyranny of cheap clicks and allows you to invest properly in the targeted, high-quality funnel we've just discussed. A £50 cost per booking doesn't look so scary anymore, does it? It looks like a bargain.

This is the maths that unlocks aggressive, intelligent growth. We've used this same logic to help clients scale profitably, from a home cleaning company where we saw costs of £5/lead, to an e-commerce brand achieving 691% Return On Ad Spend.

This is the main advice I have for you:

To pull this all together, here is the strategic shift I'm recommending. This is a framework to move you from reactive, inefficient tactics to a proactive, profitable growth engine.

As you can see, this is a much bigger project than just tweaking a retargeting audience. It's a fundamental shift in how you approach marketing your business. It's not just about setting up an ad and hoping for the best. It's about a deep understanding of your audience, strategic funnel construction, compelling creative, and ruthless optimisation based on the right financial metrics.

That's where professional expertise can make a huge difference. Taking on this entire process yourself can be overwhelming and costly if you make the wrong moves. We live and breathe this stuff every day, implementing these kinds of strategies for clients and taking over the entire optimisation process for them to ensure every pound they spend is working as hard as possible to grow their business.

If you'd like to discuss how we could apply this thinking specifically to your business in more detail, I'd be happy to offer you a free, no-obligation strategy session where we can audit your current approach and map out a clear plan for growth.

Regards,

Team @ Lukas Holschuh