How Effective Is Online Advertising For Small Businesses?

. 6 min read
How Effective Is Online Advertising For Small Businesses?

The whole world is now on the internet. Be it students, doctors or business owners, the internet has taken over all industries. In fact, according to statistics, around 75% of potential and new customers find local businesses online. This figure shows how important it is for small businesses and companies to opt for online advertising and digital marketing.

Online advertising is synonymous with internet advertising. Today, it is one of the most effective ways to reach your target customer, increase your reach and expand your customer base. In order to survive and sustain the competition in today’s marketplace, every business, company and brand must invest in online advertising. As a startup or small business owner, you must understand the benefits of online advertising and choose profitable digital marketing strategies to grow your business.

Effectiveness of Online Advertising For Small Businesses

Before we learn more about online advertising tools and channels that are helpful for your business, we’ve enlisted some of its benefits:

1. Cost-Effective

We are all aware of how expensive traditional marketing can be. Advertising on traditional spaces like magazines, newspapers, billboards and TV forces you to pull all stops and go all out to market your business or product. The amount of money that is required varies in all these media and the cost is usually so high that a small business or company can only pay for one spot. This is not just expensive but also ineffective as your advertisement is not on diverse portals. Also, an ad appearing once does not guarantee that your target customer has seen it and will purchase your product.

Compared to these issues with traditional marketing and advertising, online advertising is way more cost-effective. With a small amount of money, you can advertise your business on various portals and social media. The technology available today allows you to test your ads, make changes and understand what is working and what isn’t. This makes online advertising, especially for small businesses, very cost-effective.

2. Easily Scalable

For any company or small business owner, the ability to scale what works and discontinue what isn’t is critical. This prevents wastage of marketing budget and helps one change the strategy in order to reach the right target customer. In the case of online advertising, A/B testing becomes very easy as the tools available make it easy to tweak and try each campaign on a small scale to see which works. Once the company is confident and happy with an ad campaign, it is very easy to scale it to reach a larger audience.

woman working on laptop and displaying online advertising on it

3. Equalises the playing field for all

When a business is small or new, they are often intimidated by the larger companies in their segment in terms of their marketing and advertising might. For example, a newly launched smartphone company is definitely going to feel threatened by Apple’s billboard or TV ads. The reason? Well, Apple being the premium smartphone manufacturer in the world, can shell out a large amount of money for prime-time TV commercials and premium billboard ads. This is a challenging playing ground.

However, with online advertising, the costs are so affordable that it equalises the playing field for all sorts of companies – new, small, big and the mighty! So no matter how small your company is, you have the same resources and power to reach your target customer, even if that means competing with a market leader.

4. Quick Feedback

An exciting benefit of online advertising is quick, sometimes almost instant, feedback that you receive for your online advertising campaigns. For instance, when you give an ad in a magazine or newspaper, the only way you can measure the effectiveness of your advertising is by the number of phone calls you get for your ad or by direct sales. If your ad is running in different places, it becomes difficult to determine which of your ads has been most effective. With online advertising, you can get instant statistics and analytics for your various ad campaigns and you can gauge which of your ads has reached the right customer or elicited the right response.

5. Easier to target the right customer

With traditional ads, targeting can be done to a certain extent. For example, if you are a beauty product company, putting up an ad in a beauty or lifestyle magazine can help you reach the right customer. But, the same cannot be said about billboards and TV as non-potential customers will also be reading your ad. Also, there is no way to determine if your target customer has seen your ad. With online advertising and its myriad number of tools, reaching your target customer has never been easy. You can choose various filters to custom-create an ad for each of your user personas.

6. Helps you reconnect with customers you’ve lost

From an earlier example, have you ever wondered what happens to potential customers who have not seen your offline advertisement? Or if you have lost a big client? Do you lose them forever? While there isn’t much you can do about lost customers in the case of offline advertising, cold calling a few customers may help you get a big client back.

Online advertising, on the other hand, helps you re-target and reroute your customers back to your ad and brand. In marketing terms, this process is called re-marketing. This strategy is particularly useful for small businesses as they can put in very little money to increase their reach. This happens because your so-called ‘lost customer’ has actually come across your brand and re-marketing to them using online ads convinces them to make a purchase. Some ways to re-market are – Facebook re-marketing, Google ads, and email re-marketing.

7. High ROI

For any small business, email marketing plays a very critical role because of its effectiveness in terms of reach as well as cost. Did you know that email marketing has a very high ROI (44:1) as compared to traditional marketing that gives 2:1 ROI? In the case of stiff competition, email marketing can be supplemented with online advertising on social media.

8. Easy to automate

An important advantage, often overlooked, is the ability to automate online advertising campaigns. In the case of traditional marketing, a large number of resources in terms of money, time and people are invested to make sure one ad comes up. With online advertising, even small business owners and their small teams can set up huge advertising campaigns with automation tools and software at minimal costs.

laptop placed on glass table displaying online advertising

Types of Online Advertising Strategies

Now that you are convinced about how effective and essential online advertising is for small businesses, let’s take a quick sneak peek into the various online strategies that you can use to set up and run effective online advertising campaigns.

  • Facebook: With around 2 billion people on this omnipresent platform, there isn’t a better place for online advertising, especially for small and medium businesses. Facebook’s ads manager is an essential tool for marketing and reaching targeted audiences. Facebook’s paid ads that come in different forms are extremely useful to increase your brand, product or service visibility and encourage customers to click on your ads. Due to their frequently changing algorithms, hiring an expert to help you in online advertising is a great idea.
  • Instagram: Now owned by Facebook, Instagram has established itself as a millennial and Gen Z portal. This makes it an ideal portal for small companies and businesses to advertise and market products to this age group. This visually appealing portal makes it easy to use different types of media for advertising and marketing.
  • Google Ads: By far the best online advertising for small and large businesses alike. In order to make your Google ads effective, having a person with technical expertise in it is very important. These ads usually appear in your Google search bar, right above your first search result. Due to their location, companies need to bid for the keywords and space.
  • Display Ads: Google’s display ads are by far, the world’s largest display ad network and according to the company, their ads network reaches around 90% of internet users. Google’s display ads appear as small text boxes, text+image boxes, banners, video ads, etc., and promote products and services. Unlike Google Ads that require you to pay upfront, these display ads are Pay-Per-Click(PPC). This means, even though your ad is seen by many potential customers, you pay only when one of them clicks on your ad. For any small business, this is very cost-effective. Display ads are also a great way to re-market.
  • Twitter: With over 500 million tweets tweeted every day, Twitter is a popular social media platform. Around 2/3rds of Twitter users have said that they have found small and medium businesses on the medium via their online ads. Twitter ad formats are of three types – promoted tweets, promoted accounts and promoted trends.


As an entrepreneur and small business owner, what works for your brand or company needs to be decided by you and your team. There are many different online advertising and marketing strategies that one can use but finding the right mix that clicks for you is essential. Online advertising is, indisputably, the most effective way to reach your target customer and grow your business in today’s digital world.

Also Read:

1) How To Calculate Marketing ROI of Your Small Business?
2) How To Start A Blog For Your Small Business?
3) How to Support Small Businesses Without Spending Money?
4) 14 Tips To Grow Your Small Business from Scratch