How Can I Improve the Clickthrough on my Facebook Ads?

yikes!!! you definitely want to aim for the .2% range when you're starting out. it's difficult to give you any actionable advice not knowing what niche you're targeting but...
for starters, images will have the BIGGEST impact on your conversions so test a minimum of 10 images before even moving on further.
usually natural, attractive faces perform the best. depending on your niche.

Do you know what size of image I should use, I am currently using a 154px x 154px image, to your knowledge is this the correct size?

Ok, I have just created a version of my ad with a picture of me looking all grumpy and cheesed off! It has got nothing to do with the product I am promoting.. I will keep you posted on how this performs! LOL

Bumped this thread because of lack of replies. Help if possible please. Thank you.

In your ad image, try to cover ALL these points if possible:

1. Use an image of a person of the opposite sex of your main demographic (no partial nudity - do not try an image of measuring tape around a woman's waist, for example), and ensure their eyes are showing, and that they're a reasonably attractive person.
2. Make sure the image portrays humor of some sort; make sure it's captivating enough to illicit some humorous response in the majority of your target demographic.
3. Make sure the colors contrast again Facebook's background. Try to make sure these colors are a natural part of the picture, but even so, a red or purple border will do the trick (yes, purple - we're looking for attention-grabbing contrast here)
4. Obviously make sure the ad if tailored around your target niche/demographic, so for the cigar market for example, you could place a woman with a cigar in her mouth, making a humorous face, with a contrasting-colored pink towel around her head like she just got out of the shower.

That about covers it, but obviously for animal-centered niches you'd feature the animal rather than a person.

You could also randomly have an attention-grabbing non-related picture of you doing a funny face (which you, funnily enough, are currently trying) which has been shown to make for a decently converting ad.

Hope this helps.


Chris

Are you paying per click or for thousands impression. Sometimes when impression doesnt work well, it's better to change it to per click.

Just thinking guys... would Google Trends be a good tool to use to geotarget my Facebook Ads?

A very important aspect of improving CTR is targeting... Are you sure that your ads are shown to people that would have any interest in clicking them?

There's a formula to doing this right... this is from an article I wrote in response to a Forbes piece earlier this year that I think will help you understand why your conversions are low, and what to do about it.
How to Win With Facebook Ads

Instead of targeting people through the Broad Interest categories, use the Precise Interests field.

Search around Facebook and find other pages that are in the same niche as the one you are promoting. Look for pages that have 20,000+ fans. Once you have found some, go back to setting up your ad, and in the Precise Interests field, start typing in the names of those pages. This will make your ad only show to people who are already fans of a page that is similar to yours, which will make your ad laser targeted.

My facebook experience has been unpredictable because I never know what is going to get through and what isn't. I usually throw darts until something sticks, but obviously eye catching photos help a lot.