Digital marketing for small businesses: What and how to market online in 5 types and 5 steps

First, the good news…

Despite the internet’s global landscape, a near majority of all Google searches—3.5 billion a day—are looking for local information.

In addition, 92% of people use the internet to find local companies, with over a quarter saying they use it “every day” for exactly that purpose. (That’s double the number from just one year ago.)

Second, the bad …

Unfortunately, 64% of small business owners have yet to stake their claim in digital marketing by creating a website. Worse, a mere one in five actively market themselves on social media channels and even fewer are leveraging non-social online marketing channels.

Data from Google’s Local Search Conference, Bright Local, and CNBC

In other words, your customers and prospective customers are looking for you online, but can they find you? Perhaps an even better question is:

Developing a digital marketing strategy can feel intimidating. When in truth—whether you sell products (through an e-commerce website or retail POS) or sell a service—it’s as simple or as complicated as you make it.

In this guide, we’ll cover the basics of small business internet marketing—the what in five types and the how in five steps—so that your business can thrive.

What is digital marketing for small businesses? A definition and 5 types

As the name implies, online marketing is a broad category that represents any type of marketing activity that takes place through digital methods. Anything from an optimized website to a paid Facebook campaign to emailing customers for reviews.

In essence, marketing is your overall approach …

Although they’re often treated interchangeably, advertising is part of a marketing strategy—a subset of tactics designed explicitly to drive action; namely, generate leads or sales.

For the sake of simplicity, let’s break small business marketing into the following five online types:

1. Search engine marketing (SEM)

Imagine you need some home repairs done. What do you do? Take out your smartphone and Google “handyman near me.”

Do you see the little green boxes that say “Ad”? That’s search engine marketing (SEM) at work—more accurately, Google Ads (Google Adwords).

Using this tactic, businesses pay to have their company displayed on the search results pages, with the goal of getting more people to visit their site and, hopefully, buy their products or use their services.

You’ll also hear it referred to as paid search marketing or pay-per-click (PPC) advertising because how much you spend typically depends on how many clicks your ads generate.

A free search engine tactic is to claim your Google My Business listing. This allows you to update and verify the information that users see when they search for your business (including Google Maps).

2. Search engine optimization (SEO)

Search engine optimization (SEO) is closely related to SEM. The difference is that SEM requires direct dollars (CPC or PPC), whereas SEO centers on behind the scenes tactics to increase your website’s organic ranking on what are called SERPs (search engine results pages). 

SEO still costs, but they’re indirect dollars either in the form of your own time or hiring a specialist.

The basics of SEO involve keyword research and keyword placement into your website so that search engines can tell what your small business is about.

For instance, if you were looking for a place to grab a coffee in Appleton, WI, you’d Google “coffee shop Appleton, WI.”

Yelp and TripAdvisor come up first—and you should be on those platforms, too (more on that in a following section). Below them, we see results for local coffee shops—like Tempest Coffee, All Seasons Coffeehouse, and Copper Rock Coffee Company.

All of these businesses have optimized their websites, likely using both short-tail and long-tail keywords. What are those?

• Short-tail keywords: One-to-three words that capture the core of a business’ products or services: e.g., “coffee shop.”
• Long-tail keywords: Three words or more that are detailed, specific, and will return more targeted results: “coffee shop in Appleton, WI.”

Optimizing your site for search engines is typically considered one of the basics of digital marketing, as even small changes can help you win more traffic and, ideally, new customers.

3. Social media marketing

Research shows that the average person will spend nearly two and a half hours on social media every single day.

That’s why more small businesses are investing time, energy, and money into their social media marketing channels than ever before. Networks like:

• Facebook
• Instagram
• TikTok
• Twitter
• LinkedIn
• Pinterest
• And more

It’s likely you already have one or more social profiles set up for your business. If so, before launching paid campaigns, it may be time to clean up your social presence.

The popularity of social media has resulted in the emergence of a fresh approach known as influencer marketing. This involves collaborating with individuals who have a significant number of followers or a specific target audience, in order to advertise a business, product, or service to their personal fan base.

4. Content marketing strategy

Nielsen estimates that the average adult spends over 11 hours per day interacting with media content—whether it’s watching, reading, or listening.

That’s why more and more businesses are focused on content to engage their customers, foster loyalty, and grow brand awareness.

But what exactly is “content marketing”?

This could include:

• Videos and images
• Podcasts
• Blog posts or other writing
• Social media updates

Rather than sell, content fosters a relationship with a potential customer by offering them something of value for free. That way, when the time comes for them to actually make a purchase, your business will be trustworthy and top of mind.

As such, whether you’re creating YouTube tutorials or writing in-depth guides, be aware that using content isn’t a quick win in the same way that paid advertising might be.

It’s a long-term strategy that requires dedication and effort.

5. Email marketing

With email marketing, you engage with customers and promote your business using email—typically sent to a large audience at a single time rather than individual correspondence through marketing automation.

We’ve listed it last not because it isn’t important. Email marketing is actually the most valuable form of digital marketing.

So, why is it last?

It could be a monthly newsletter you send out about recent happenings with your business or announcements about your sales, promotions, or new products.

5 Benefits of digital marketing for small businesses 

Now that we've covered the essentials of digital marketing types and initial steps, let's delve into the compelling reasons why investing in digital marketing is a game-changer for small businesses.

1. More visibility and reach

Digital marketing acts as a gateway for your business, extending an invitation to a worldwide audience. By employing smart strategies like search engine optimization (SEO) and precisely targeted paid advertising, your business becomes a hub for potential customers from all around the globe. 

Embracing the vastness of the internet, your brand can move past local boundaries and establish itself as a recognizable presence online. Imagine transforming your neighborhood store into a bustling marketplace where customers from every part of the world can visit.

2. Save on marketing costs

Compared to conventional advertising methods, digital marketing offers small businesses a cost-effective solution. You can leverage methods like social media marketing and email campaigns to connect with your target audience without breaking the bank. 

The introduction of paid advertising platforms like Google Ads is better for your budget, allowing your small business to make the most of its marketing budget and allocate resources strategically. 

3. Make decisions based on data

Digital marketing is similar to having a knowledgeable companion who provides valuable insights and data to shape your business strategy. Utilizing tools like Google Analytics allows you to observe user behavior, gauge the effectiveness of your campaigns and make informed decisions based on real information. It's not a one-and-done task; it requires continuous adjustments and improvements, ensuring that your marketing aligns with the changing needs of your audience.

4. Engage with your customers

Social media platforms offer a direct avenue for your business to engage with your audience. When you share interesting content, receive comments and witness your posts being shared, it fosters a sense of community around your brand.

By including interactive elements such as polls and contests, you not only increase engagement but also gain valuable feedback and market knowledge. It is like having a dialogue with your audience, giving your brand a friendly image, and nurturing a community that values your offerings.

5. Build brand loyalty

Having a consistent and impactful digital marketing strategy is essential for establishing a strong brand identity. Content marketing serves as a powerful tool that allows you to tell your brand's story and forge personal connections with your customers. 

By regularly engaging with them through email communication, newsletters, promotions, email marketing becomes like being a friendly neighbor, nurturing long-term relationships with your audience. It's like staying in touch with friends, sharing updates, and ensuring that your brand remains memorable to them over time.

How to begin and optimize your small business online marketing in 5 steps

Now that you’ve familiarized yourself with the basics, let’s talk through the initial steps you can take to begin marketing your own small business online.

Crafting a profitable digital marketing plan shouldn’t be done in isolation from the rest of your business. Instead, the best way to start is to use a business plan template.

1. Set ‘SMART’ online goals

Like anything else you do within your business, there needs to be a purpose—a clear end goal that you can point to.

This speaks to the importance of having a strategy in place (rest assured, it doesn’t need to be anything overly complex), and that all begins with setting goals for your marketing efforts.

The key here is to get specific—“market my business” doesn’t count as a goal. The more granular you get, the easier it is to monitor them.

Rather than setting a goal to “make more sales,” narrow down even further to “bring X number of people to my website” or “start X amount of conversations on social media per week.”

You can set unique goals for each platform you plan to use or specific marketing campaigns.

For example, when you post to your company’s Facebook page, what’s your goal in doing so? Do you want to drive people to your website? Add more subscribers to an email list? Get more ratings and reviews?

Use the SMART goal framework to set objectives that actually motivate you and hold you accountable:

S: Specific

M: Measurable

A: Attainable

R: Realistic

T: Time-bound

With that in mind, here’s an example of a SMART goal that you might set for Facebook marketing efforts:

Post to our company Facebook page at least three times per week, in an effort to increase traffic to our website by 10% by the end of September.

Setting these goals might seem like an unnecessary formality. But, without them you run the very real risk of creating for the sake of creating and not seeing the results of your effort.

Your goals will serve as your compass for where to start and what you prioritize.

2. Determine your digital marketing budget

Recent research shows that the average small business spends 1% of its revenue on advertising.

When it comes to online marketing, there are two terms you’ll hear again and again: paid and organic. You can think of these as the dividing line between activities that will cost you time and those that will cost you money.

Paid marketing requires a direct monetary budget behind it. For example, an Instagram Ad or a sponsored search result.

Organic marketing is a channel you don’t have to pay for—at least, not directly.

Facebook and Instagram posts, Google My Business, Yelp, TripAdvisor (and other online review sites), as well as content and search-engine-friendly changes to your website all qualify as organic.

There are many channels that only require you to enter your address, phone number, images, and a description to start getting new customers.

Most businesses use a mix of both.

If you’re a good photographer, Instagram and Facebook should be your go-to. If you love writing, then invest in blog posts and guides. If videos are your forte, turn to YouTube.

In each instance, set a foundation of organic content and only then determine a paid budget.

3. Know your target market (ideal customer)

You probably had an idea of who you wanted to sell to when you started your business, but customer bases evolve over time. When you take a step back, you might be surprised by who you’re selling to today.

Google Analytics is a great place for hard data. Its built-in acquisition and demographics dashboards contain a wealth of insights—especially when it comes to your current traffic sources as starting points for your digital marketing campaigns:

Image via Annielytics

If not, even taking note of who’s coming in the door, how many new faces you’re seeing, or trends in purchasing behavior can be enlightening. You can also use informal conversations with existing customers to find out more about how they found your business and what problems you’re solving for them.

To develop a clear picture of your target audience, consider mapping out your customer journey and building personas to match.

4. Develop a brand identity

You’re going to have a reputation online that needs to be cohesive with the rest of your marketing plan. The overall feel of your company—the stories you and your customers tell—is what small business branding is all about. This applies as much to your products and people as it does to your words and visuals: “In simplest terms, a brand is the core truth of your company brought to life.”

How do you want your business to be perceived through your various marketing campaigns? Do you want to be:

• Inspiring and motivating?
• Corporate and serious?
• Snarky and sarcastic?
• Casual and personable?

Speak to existing customers and prospective customers to find out how they’d describe your business.

What words do they use? What feelings do they associate with your brand? When they need something, what makes them come to you specifically?

From there, document general rules for how you communicate in your online marketing tactics. That way, if you ever delegate tasks, you already have the foundation in place so everyone understands how your business should be portrayed online.

5. Pick your starting point and build

With those basics in place, it’s time to push on with a digital marketing strategy for small business.

Don’t overwhelm yourself. Instead, build slowly.

Identify your strengths and lean into what you’re already good at to help the whole process feel less intimidating.

If you have a knack for writing, content is a good launching point. Or, if you have an analytical mind with an eye for detail, start with search engine optimization.

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