Before the rise of smartphones and the internet, small businesses relied on traditional marketing methods like print ads, TV commercials, and billboards. However, with roughly 70% of U.S. adults now shopping online, more and more companies are adopting digital marketing strategies as a way to reach and convert customers.
LocaliQ's Small Business Marketing Trends Report shows that 49% of small and midsize businesses plan to increase their marketing budgets in 2025. But interestingly, only 27% of businesses plan to invest more in traditional marketing. Instead, most of the investment is being funneled toward digital marketing efforts, such as content marketing (51%), search advertising (47%), social media marketing (43%), and search engine optimization (42%).
So, what are the specific advantages of using digital marketing, and what types of challenges can it help your business overcome? This guide answers both of those questions and explores nine powerful benefits of online marketing for small businesses.
In 2025, small business owners face countless challenges and obstacles. For example, some of the most common pain points for small businesses include:
Your business can overcome these challenges by implementing digital marketing campaigns that are tailored to your organization’s budget and industry. Some examples of digital marketing tactics commonly used by small business owners include:
With a strong digital marketing strategy in place, your business can build brand awareness, reach your target audience, improve your brand's online reputation, and gain other crucial benefits. We’ll examine nine of them in the next part of this guide.
Whether you operate two locations or 20, a digital marketing strategy can help your business grow and thrive.
To find out how and why, let's break down nine benefits of digital marketing for small businesses. They include:
Digital marketing is the modern response to traditional marketing methods, like billboards, direct mail, posters, and cold calls. Instead of magazines, newspapers, or TV commercials, online marketing uses digital channels like websites, email, and social media platforms.
Compared to traditional marketing, digital marketing offers a wider variety of advertising options for small businesses. To share some examples, here are five ways small businesses can market and promote themselves online.
You can promote your business online using social media platforms like TikTok, Facebook, Instagram, Reddit, and X (formerly Twitter). Create posts, share brand mentions, tag users, start hashtag campaigns, interact with customers, collaborate with influencers, and more.
Search engine optimization, which involves tactics like performing keyword research and building quality backlinks, helps your business get seen by more people. We'll cover SEO later in this guide.
User-generated content is important because it inspires more trust in consumers than branded content, making it easier to convert customers. UGC includes ratings, reviews, testimonials, and other content created by customers.
Organic channels are unpaid, while paid channels cost money to advertise. Some examples of organic marketing include publishing content and improving your SEO. Examples of paid marketing include using Facebook and Google ads, like search ads, display ads, or video ads.
You can boost traffic while establishing yourself as an authority on your subject by regularly publishing informative, keyword-rich content. In addition to creating blog posts or guest blogging, you can also create video or audio content like YouTube videos or podcasts on Spotify.
By taking advantage of the versatility that digital marketing offers, your business can reach customers wherever they are, however, they prefer to consume content — whether that’s by scrolling through social media, checking out online reviews, listening to podcasts, or researching topics that interest them.
Not only are digital marketing services more versatile than traditional marketing methods, they're also more cost-effective. That’s a crucial advantage for small business owners, who usually need to stretch tight budgets.
Many digital marketing tools are available at low or no cost, giving you options no matter what your budget looks like. Two of the biggest platforms are Facebook Ads and Google Ads, which both enable businesses to manage their spending and make campaign adjustments in real time.
As Google explains, you can "decide your monthly budget, and adjust at any time" to ensure you stay within your budget while getting the best ROI from your campaign.
Additionally, Google Ads is currently offering up to $1,500 in credit for new customers who sign up. Claiming the offer can help you get greater value out of your first Google Ads campaign.
Digital marketing enables small businesses to target specific audiences and create personalized, relevant messaging that resonates with the intended demographic or market segment. Some examples of targeting tactics include:
Targeting isn’t the end of the story, either. Businesses have another opportunity to convert customers with retargeting, a strategy where ads are displayed to consumers after they leave your website.
By using targeting and retargeting strategies effectively, small companies can connect with the right market segment and boost conversions.
We'll keep this section brief since we've covered SEO in depth in our posts on franchise marketing and responding to online reviews. But to give you a quick rundown, here are some need-to-know essentials.
SEO, or search engine optimization, involves making a wide range of improvements to your website, including technical improvements as well as improvements to the user experience (UX). Some examples include boosting site speed, optimizing for mobile, designing an easy-to-navigate site structure, ensuring that URLs are concise, and making use of alt text.
It also involves taking steps to boost your presence outside your website. Some examples include optimizing your Google Business Profile, guest posting on other websites, and getting high-quality websites to link back to your own, which is called building backlinks.
By making these types of improvements, you can enhance your online presence, making it easier to compete with big brands and help new customers find you.
Digital marketing is one of the most dependable ways for small businesses to generate high-quality leads — and the data proves it.
According to recent research by LocaliQ, 50% of small and midsize businesses say that digital marketing and online advertising is their number one best source for new customers and leads. This is surpassed only by customer referrals, which 65% of businesses say is their best source.
Other top sources of leads include:
Digital marketing generates leads by using precise targeting, leveraging a variety of channels, improving search visibility with SEO, and creating more opportunities for interaction and engagement.
Digital tools like analytics — which we’ll discuss in the next section of this guide — enable you to collect huge volumes of data that help you understand your customers and predict future trends. But analytics aren’t the only source of valuable data about your customers. You can also gain actionable insights directly from your customers themselves.
There are multiple ways to collect feedback from current and potential customers, such as asking for Facebook recommendations. Some examples include:
For example, specialized review platforms like Angi and Zillow are great for professionals in the real estate industry. Other examples include Avvo for law firms, Edmunds for automotive dealerships, OpenTable for restaurants, and Zocdoc for medical professionals.
However, manually collecting and managing reviews on multiple platforms is time-consuming. Shout About Us streamlines the process by automatically pulling reviews from across the web into one dashboard, enabling you to sort and respond to feedback with ease while getting detailed business reports.
Analytics tools, such as Google Analytics, are integral to any digital marketing strategy. Their purpose is to track data and identify patterns that businesses can use to make better, more profitable decisions that convert more customers.
With analytics at your fingertips, it’s easier to assess the profitability of your campaigns, determine whether they’re resonating with the intended audiences, and track how they’re impacting engagement. Using analytics tools, you can track metrics like:
The best part? Many of these tools are low-cost or completely free to use, which can help you lower your overall digital marketing cost. We've included a few examples below to help you get started.
Google Analytics is free to use. It includes features like predictive capabilities, acquisition and engagement reports, campaign performance snapshots, and more.
It also integrates with other Google tools, including Google Ads and Google Search Console, to help give you a clearer, more detailed picture of your ROI.
Microsoft Power BI is also free to use, with professional versions available for $10 to $20 per user per month.
Depending on which version you select, Microsoft Power BI comes with powerful analytics features like custom reports, data visualizations, data filtering features, and a searchable Q&A help center.
We’ve all seen it happen before: a company spends millions of dollars on a TV commercial or new series of print ads…only to have it miss the mark and turn into a financial flop.
For large companies, that might be a temporary setback — but for small businesses, which are usually operating on tight budgets, there’s less of a margin for error. As a growing brand, you can’t afford to waste resources on ineffective ad campaigns.
Fortunately, you don't have to worry about running into this scenario when you market your business online. That’s because digital analytics tools reveal how your campaigns are performing in real time, as we explored in the last section.
Equipped with up-to-the-second data and insights, your business can pivot effectively and make on-the-go strategy adjustments. That means you can minimize costs and losses while getting a better ROI from your digital advertising campaigns, ensuring the process is totally optimized from start to finish.
Digital marketing is one of your most powerful tools for building a positive reputation that earns brand loyalty and boosts customer retention. Here are a few of the ways that digital marketing can enhance the customer experience (CX) and keep shoppers coming back for repeat business.
To recap, your small business can develop a powerful digital marketing strategy by using tactics like:
By implementing these types of strategies, your business can overcome hurdles like fierce competition and budget restrictions, while simultaneously gaining numerous advantages. These advantages include generating qualified leads, gaining actionable business insights, improving your online reputation, earning loyal customers, and the other benefits we covered in this guide.
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Book your demo today to see how Shout About Us can help grow your business.
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