The rules of Facebook advertising have fundamentally changed. Since Apple’s App Tracking Transparency (ATT) crushed traditional targeting in 2021, Meta has rebuilt its entire advertising system around AI and automation. For party rental and bounce house business owners, this shift actually creates new opportunities—if you understand how the platform works today. The old playbook of hyper-targeting “birthday party planners” within a 10-mile radius still works, but combining it with Meta’s Advantage+ AI now delivers 14% lower cost per lead and dramatically better results than fighting the algorithm.

 

The post-ATT reality: what actually changed for local advertisers

When iOS 14.5 launched in April 2021, 96% of U.S. iPhone users opted out of tracking—decimating Facebook’s ability to follow users across apps and websites. Return on ad spend plummeted 38% almost overnight, from 3.13 to 1.93. But here’s what most party rental businesses don’t realize: the impact on local service businesses has been less severe than for e-commerce, because your customers still engage directly on Facebook and Instagram.

The targeting landscape has undergone significant consolidation. In June 2025, Meta merged many granular interest categories into broader groupings—specific interests like “Children’s Birthday Parties” may now fall under broader “Parenting” or “Events” categories. Detailed targeting exclusions were completely removed in March 2025, meaning you can no longer exclude users based on interests. However, custom audience exclusions (excluding past customers, for example) still work.

What still works effectively in 2025:

• Geographic targeting remains completely intact (radius and zip code)
• Life events targeting (“Newly engaged,” “New parents,” “Upcoming birthdays”)—this is gold for event businesses
• Custom Audiences from customer lists, website visitors, and engagement
• Core demographics: age, location, job titles, relationship status
• On-platform engagement audiences (video viewers, page engagers)—unaffected by iOS restrictions

The fundamental shift is this: Meta’s algorithm now does the heavy lifting. Your job is to feed it good data, strong creative, and let it find your customers.

 

Advantage+ campaigns: how Meta’s AI actually works for local businesses

Meta’s Advantage+ suite represents the biggest change to Facebook advertising in years. Instead of manually selecting audiences, placements, and budgets, you provide inputs and the algorithm optimizes everything automatically. For party rental businesses, Advantage+ Leads Campaigns (launched in 2025) are particularly relevant—early testing shows 14% lower cost per lead and 10% lower cost per qualified lead compared to traditional campaigns.

Here’s how Advantage+ fundamentally changes targeting: when you select interests like “party planning” or “bounce houses,” the algorithm treats these as suggestions, not constraints. If Meta’s AI determines it can find better customers outside your specified audience, it will—and data suggests this often outperforms manual targeting. Jon Loomer’s March 2025 testing found that Advantage+ Audience with no audience suggestions delivered more registrations at lower CPMs than detailed targeting or lookalike audiences.

For a bounce house rental business, this means your campaign structure should look different than it did two years ago. Rather than creating separate ad sets for “birthday party planners,” “event coordinators,” and “parents of young children,” you should consolidate these into fewer ad sets with broader targeting, allowing the algorithm more data to optimize against. The exception: geographic targeting should remain tight. Keep your radius targeting to your actual service area—the algorithm can’t override location settings the way it can interest targeting.

The practical implication is profound: creative quality now determines who sees your ads more than audience selection does. Meta’s Andromeda algorithm (launched late 2024) uses deep learning to match your ad creative with users most likely to convert, based on visual recognition and engagement patterns.

 

First-party data becomes your competitive advantage

With third-party tracking gutted, the businesses winning on Facebook in 2025 are those with strong first-party data—customer lists, email subscribers, and proper server-side tracking. For party rental businesses, this is more achievable than you might think.

Conversions API (CAPI) has become essential, not optional. Traditional pixel tracking misses 20-40% of conversions due to ad blockers, browser restrictions, and iOS opt-outs. CAPI sends conversion data directly from your server to Meta, bypassing these limitations. Advertisers implementing CAPI typically see a 15-20% increase in reported conversions and significantly better ad optimization.

Implementation is simpler than it sounds. If you’re on Shopify, enable “Maximum” data sharing in your Facebook & Instagram sales channel settings—it automatically enables Pixel + CAPI for all events. WooCommerce and Wix offer similar plug-and-play integrations. For custom websites, Meta’s CAPI Gateway provides a no-code option through AWS Lambda or Google Cloud Platform.

Customer list uploads remain powerful for party rental businesses. The practical minimums:

• Technical minimum: 100 contacts
• Practical minimum for meaningful results: 1,000+ contacts
• Lookalike seed audience sweet spot: 1,000-5,000 of your best customers

Match rates vary significantly: B2C businesses with personal emails typically see 50%+ match rates, while phone numbers often match even better than email. Include multiple identifiers when uploading (email, phone, name, city, zip) to maximize matches.

For building your first-party data, implement email capture with clear incentives: “Get 15% off your first bounce house rental” works better than generic newsletter signups. Contest entries, loyalty programs, and quote request forms all feed your custom audience pool. The goal is accumulating enough first-party data that your targeting depends less on Meta’s increasingly limited third-party data.

 

Broad targeting versus detailed targeting: what the data shows

The most counterintuitive finding from 2025: broad targeting often outperforms detailed interest targeting. This represents a complete reversal from Facebook advertising best practices just three years ago.

Jon Loomer’s controlled testing found that Advantage+ Audience without any audience suggestions delivered lower CPMs ($0.68-$0.89 cheaper) and more conversions than campaigns using detailed targeting or lookalike audiences. Tara Zirker of Social Media Examiner goes further: “You must be radically broad. Target the entire country with no age selection, no gender selection, and no interests. This gives the AI the maximum amount of data to find your ideal customer.”

For party rental businesses, a nuanced approach works best. Use broad targeting within geographic constraints. Set your radius targeting to your service area (typically 15-50 miles), then let the algorithm optimize everything else. Your ad creative—showing bounce houses at birthday parties, happy children, satisfied parents—signals to the algorithm exactly who should see your ads.

When detailed targeting makes sense:

• Life events targeting for event businesses (newly engaged couples, new parents) remains highly effective
• Initial testing with limited budgets where you need faster learning
• Remarketing campaigns with specific messaging for past website visitors

When to go broad:

• Conversion-optimized campaigns with sufficient budget ($15-30+/day per ad set)
• Scaling proven campaigns
• When you have strong creative that clearly signals your target customer

The key insight: detailed targeting inputs are now just suggestions when using Advantage+ features. The algorithm will expand beyond your selections if it predicts better performance—and your job is to let it.

 

Lookalike audiences in 2025: diminished but not dead

Lookalike audiences have lost significant effectiveness since ATT, with some agencies reporting 45% higher CPMs compared to broad targeting. The fundamental problem: lookalikes are built from custom audiences, which are themselves compromised by iOS tracking opt-outs.

Jon Loomer’s perspective captures the industry consensus: “The concept of lookalike audiences is outdated now. The entire point of Advantage+ Audience and algorithmic targeting is similar to the original goal of lookalike audiences. Meta knows who has engaged with you and performed certain actions in the past, and the algorithm will find more people like that.”

That said, lookalikes remain viable for specific use cases. A supplement retailer using a Facebook lookalike audience from ~19,000 past customers achieved a 21.3% conversion rate and 6.8× ROI. The key is source audience quality.

Best practices for lookalike audiences in 2025:

• Use customer purchasers as your source (not just website visitors)
• Minimum source size: 1,000+ customers
• Stick to 1-2% lookalikes for precision; avoid 10% lookalikes
• Combine multiple lookalikes in a single ad set rather than separate ad sets
• Test lookalikes against Advantage+ Audience—the latter often wins
• Implement CAPI for better source audience data quality

For party rental businesses with substantial customer databases, lookalikes can still work. But if you have limited customer data, broad targeting with strong creative may outperform.

 

Creative is the new targeting: why your ad content matters more than ever

Meta’s 2020 research showed 56% of campaign sales ROI comes from creative quality. By 2025, with targeting controls reduced and algorithmic optimization ascendant, that percentage has only grown. The phrase “creative is the new targeting” has become industry gospel—and it’s directly applicable to party rental advertising.

Here’s how creative functions as targeting: Meta’s algorithm analyzes your ad images and videos, identifies patterns and objects, and matches them with users who engage with similar content. A video showing a bounce house at a children’s birthday party signals to the algorithm: find parents of young children interested in party planning. The visual content does the targeting work that interest selections used to do.

Format diversity is essential. Test across:

• Carousel ads showcasing multiple rental items (bounce houses, tables, chairs, tents)
• Short-form video showing setup process and happy customers
• User-generated content and customer testimonials
• Before/after transformation photos of event spaces
• Real people enjoying events (builds trust far more than stock photos)

Refresh creative regularly—monthly for smaller budgets, weekly for larger ones. A design bootcamp case study showed a drop from $86 per conversion to $13.87 within 24 hours after implementing fresh creative. The algorithm rewards novelty and engagement.

For party rental businesses, authenticity wins. Polished commercial photography often underperforms genuine customer photos and behind-the-scenes Reels showing your team setting up bounce houses. “Ads that don’t look like ads” get wider AI-driven reach.

 

Lead generation ads versus website conversions: which to choose

Facebook Lead Ads (Instant Forms) show strong performance metrics for local businesses: 12.54% average conversion rate versus 10.47% for landing page campaigns. Users never leave Facebook, forms auto-fill with their information, and mobile friction is minimized.

However, cost per action runs higher at $17.98 versus $13.26 for landing pages, and lead quality can suffer from easy form fills. For party rental businesses, the calculus depends on your follow-up capacity and website quality.

Choose Lead Ads when:

• You need high lead volume and can handle immediate follow-up
• Your website isn’t mobile-optimized or loads slowly
• You’re just starting with Facebook Ads and want quick results
• You can integrate forms with your CRM for automated response

Choose Conversion campaigns when:

• You have a high-converting website with proper tracking
• Lead quality matters more than volume
• You want to build remarketing audiences
• Your booking process requires detailed information

The 2025 best practice: use Conversion Leads optimization, which integrates with your CRM to feed back conversion data. This teaches Meta’s algorithm what high-quality leads look like—people who actually book, not just fill forms. It may increase cost per lead but dramatically improves lead-to-customer conversion rates.

New spam controls also help: Meta now offers SMS and email verification for Instant Forms, reducing fake leads from accidental clicks.

 

Budget and bidding: practical numbers for local businesses

Facebook Ads remain significantly more cost-effective than Google Ads for local services. Average cost per lead on Facebook: $27.66 versus $70.11 on Google Ads. For personal services and events, expect approximately $30.57 average cost per lead—though party rental businesses often see $15-40 depending on market competition.

Recommended starting budgets:

• Testing phase: $10-30/day for 2 weeks minimum ($280-840 total)
• Established campaigns: $50-100/day
• Monthly allocation: 70% to scaling proven campaigns, 30% to testing new creative/audiences

Meta’s learning phase requires approximately 50 conversions per ad set per week for optimal algorithm performance. At a $25 cost per lead, that’s $1,250/week per ad set—unrealistic for most small businesses. The workaround: consolidate ad sets. Rather than running five narrow ad sets at $20/day each, run one or two broader ad sets at $50-100/day each. This gives the algorithm more data faster.

CBO versus ABO: Campaign Budget Optimization (now “Advantage Campaign Budget”) automatically distributes spend across ad sets. Use it for scaling proven campaigns. Ad Set Budget Optimization gives you manual control—better for testing where you want equal spend across variables. Start with ABO for testing, move winners to CBO for scaling.

For bidding, Lowest Cost (the default) works for most local businesses. Only move to Cost Cap after you’ve established baseline performance and want to maintain specific unit economics at scale.

 

The 2025-2026 roadmap: what’s coming next

Meta’s December 2025 announcement signals the next evolution: AI interaction data will now inform ad targeting. Conversations with Meta AI will personalize ads, significantly expanding behavioral data available for targeting.

Key recent and upcoming changes:

• Advantage+ Leads Campaigns now globally available—prioritize testing these
• AI Video Expansion automatically adjusts creative aspect ratios
• Generative AI creative tools showing 11% higher CTR and 7.6% higher conversion rates
• Threads advertising now testing with 350M+ monthly users
• Messenger inbox placement removed (November 2024)

The trajectory is clear: more automation, more AI, less manual control. Businesses that embrace algorithmic optimization while maintaining strong first-party data and creative quality will outperform those clinging to deprecated tactics.

 

Putting it together: action plan for party rental businesses

Week 1-2: Foundation Set up Conversions API through your website platform. Verify your domain in Meta Business Manager. Ensure your Meta Pixel tracks key events (Contact Form Submissions, Quote Requests, Bookings).

Week 3-4: First-party data Upload your customer list (aim for 1,000+ contacts). Create engagement audiences from video viewers and page engagers. Set up CRM integration for automated audience syncing.

Week 5-6: Campaign launch Start with Advantage+ Leads Campaign, targeting your service area radius. Use life events targeting (newly engaged, new parents) as audience suggestions. Launch with 3-5 diverse creative variations—video, carousel, and static.

Ongoing: optimize and scale Test broad targeting against interest-based targeting. Refresh creative monthly. Monitor cost per lead (target under $35 for party rentals). Scale winners by 20% weekly; pause underperformers after 7+ days.

The party rental businesses winning on Facebook in 2025 aren’t fighting the algorithm—they’re feeding it great data and creative, setting geographic constraints, and letting Meta’s AI find their customers. The targeting precision that ATT took away has been replaced by something potentially more powerful: machine learning that knows your customers better than your interest targeting ever did.

 

Conclusion

The post-ATT Facebook advertising landscape rewards a fundamentally different approach than what worked in 2019. First-party data, strong creative, and algorithmic trust have replaced granular audience targeting as the primary success drivers. For party rental and bounce house businesses, this shift is actually advantageous: your customer actions happen in the real world (bookings, events, referrals), giving you clear conversion signals that train Meta’s AI effectively.

The businesses struggling are those still manually managing audiences like it’s 2018, while the winners have embraced Advantage+ automation, implemented Conversions API, and invested in creative diversity. With average lead costs still well below Google Ads and strong targeting for life events like birthdays, engagements, and new parenthood, Facebook remains the most cost-effective paid acquisition channel for local event businesses—if you adapt to how it works today.