Digital Marketing for Small Businesses: Benefits and Challenges

Statistically, global digital advertising spending reached $601.8 billion in 2023. This means that digital marketing is a must-have tool for all business owners that want to improve their revenue. Whether you have a small business or you are the owner of a big company, you simply can’t do without digital marketing tools today. Just look around and you’ll see that digital technology has changed the world we live in. The way businesses operate has also changed. All techniques that were used 5-10 years ago don’t work anymore. This industry is dynamic and rapidly changing. If you want to make the most out of your digital ads, you have to follow the latest trends in this niche.

Today, digital marketing plays an important role in running your online business. If a company wants to increase sales and overall growth, it simply can’t do without powerful and effective digital marketing campaigns.

In this comprehensive post, we’ll look closer at all the benefits of small business digital marketing. We’ll define the meaning of this term, the importance of digital marketing, and the main reasons why you need to opt for it. Get comfortable and have a look!

What Is Digital Marketing?

Let’s begin with the basics and define what digital marketing for small businesses is. It’s a kind of art that allows you to attract new visitors and convert them into real customers that will buy your products or services. This marketing form is based on electronic devices—modern users are contingent on their smartphones, tablets, wearables, TVs, laptops, and computers, and the only way to reach your targeted audience is to use these devices. 

Small business internet marketing uses different strategies to find potential customers. Simply put, it’s the type of marketing that is done on the web. Here are the most effective and popular methods that are used in digital marketing for small business:

• Search engine optimization
• Affiliate marketing
• Pay-per-click
• Inbound marketing
• Content marketing
• Email marketing
• Social media marketing
• Search engine reputation management
• Influencer marketing

And it’s up to you to decide which digital channel to use to develop your brand awareness. You can use either one channel or opt for a few of them. The performance of all these methods is measurable and powerful.

Whether you have a small local business or you are a CEO of a big enterprise, your business will undoubtedly benefit from digital marketing strategies. Experts say that small business digital marketing can influence people’s habits, interactions, and lifestyles. Let’s see how this happens:

• With the rapidly growing accessibility of the internet, the number of online users is also growing. So far, there are 5.19 billion active internet users and over 56% of them access the internet via mobile devices. The vast majority of these users can be your potential clients.
• 45% of global consumers use their smartphones to shop online at least once a day.
• By 2026, mobile phones will reach 69% of the ad spending share while desktop PCs will have only 31%.

These figures prove that the influence of digital marketing is rapidly growing, and so far, it’s a must-have tool for running your business online!

How Digital Marketing Helps Small Businesses

So, you have a small local shop where you sell unique handmade items, but why do you need small business internet marketing? What are the benefits of this investment?

First, you have to remember that digital marketing for small business includes a few tactics to connect your brand with your potential customers. And if you run a small business, it’s a challenge to understand how to make it work for you. However, you can easily tackle that challenge by hiring a professional marketer or an outsourcing company that can help you build the right marketing strategy.

Nevertheless, it’s one of the most effective ways for a small company to reach out to clients. It’s the only method that allows you to come into the spotlight as the best company that sells things or services. With the help of digital marketing, you can build trust among your audience, get more customers, improve ROI, and make your business grow!

Benefits of Digital Marketing for Small Businesses

Gradually, we are moving to the most interesting section of our review—what are the main benefits of digital marketing for small companies? Why should you invest in these digital tools? Let’s review the main reasons that might persuade you to opt for this powerful tool for your business. 

Provide Equal Opportunities for Everyone

It doesn’t matter what the size of your company is. Digital marketing for SMB is available for everyone. It’s not something that you can’t reach, even if your budget is limited. Even a small business can easily reach its target audience through the use of various strategies. Digital marketing is the space where everyone is equal. This is where small businesses can compete with big companies by leveraging various marketing tools and strategies. The selection of digital marketing tools is huge, so you can choose the one that suits your business needs—and most of all, your budget.

Target the Right Audience

As we have already mentioned, the internet has over 4 billion users, and most of them use their smartphones. So far, every single social media platform is a huge pool of potential clients that might be interested in your products or services. You just need to find them with the help of catchy online ads and the right marketing strategy.

To get the right audience, you can use the following targeting tools in your strategy for digital marketing for small business:

• Google ads
• Facebook custom audiences and retargeting
• LinkedIn for keyword research
• Search Engine Optimization

Cost-efficient

A few years ago, business owners used printed flyers, rented billboards, or placed banners to let people know about their business. However, this costs a lot. Some business owners use these strategies even today, especially in small towns. Nevertheless, the main downside of this technique is that it’s impossible to measure its effectiveness.

Even today, it is more effective and cheaper to invest in a digital marketing campaign instead of printing advertising flyers. If you want to get the most out of your campaign, you have to opt for the services of professional marketers or a trusted digital agency. Don’t deal with amateurs that lack experience in this area.

Overall, thanks to a massive collection of digital marketing tools and fantastic opportunities provided by them, business owners can quickly measure the effectiveness of ads, make changes, stop ineffective campaigns, and invest more in online ads that work well.

Build Brand Recognition

Another reason to choose online marketing for a small business is brand recognition. It allows you to introduce your products or services to people. In doing so, they will learn more about your company, concept, products, or services that you sell. It will help them remember your logo and brand, and next time, when a user sees the logo of your company, he or she is more likely to interact with your brand. Simply put, digital marketing tools enable people to connect emotionally with your company. 

Provide You With Exposure

If you want to get more customers, you need to remember that online visibility is of utmost importance—especially today, when the market is overloaded with competitors. If you have a small company, digital marketing tools allow you to build your own exposure space on your platform and concentrate on your potential clients online.

Increase Revenue

Surely, the services of digital marketers aren’t cheap. However, the main reason why business owners need to opt for digital marketing campaigns is the opportunity to get more conversions. The higher conversion rates, the better your revenue. Business owners that opt for digital marketing tools get more revenue compared to other companies that don’t use social media marketing. A combination of various marketing strategies allows you to create a better response and as a result, increase your revenue.

Give Measurable Results

Remember that the performance of each marketing channel is measurable and therefore you can easily evaluate the effectiveness of your campaign across each of them. After your advertising campaign is launched, you can easily check out the results and evaluate its performance. If it’s poor, you can switch this ad off. You’ll see what products or services are appreciated by your audience and which of them are less popular.

Getting Started on Digital Marketing for Small Businesses

So, how do you get started in digital marketing for small business? How do you run the most effective ads that will surely bring income? Of course, the fastest and most effective solution is to hire a digital marketing agency for small businesses. In doing so, you’ll entrust this task to professionals in this area and save a lot of your personal time.

However, you need to make sense of it all yourself. In other words, if you want to get the most out of your campaign, you should know how it works.

There’s no need to delay building your online presence. Here are the main directions on how to get started:

Define the Main Objective of Your Business

Before running a marketing campaign or using digital marketing services for small business, you need to define the main objective of this campaign. Think about what goals you wish to achieve and how you will convert leads, improve web traffic, enhance brand awareness, get more qualified leads, etc.

Analyze Your Competitors and Define Your Target Audience

If you want to make your business grow, your first and foremost task is to research online and find out more about your competitors. Check out what people say about you and your competitors. This information will help you learn more about the marketing strategy used by your competitors. This is where you may borrow some ideas.

Work on Building Social Media Presence

To get started, you need to create social media accounts for your company. First off, before people buy anything, they go online to check the account of a chosen company. Secondly, social media is a mandatory component of any digital marketing strategy.

Opt for Email Marketing Campaigns to Contact Your Customers

Although some marketers say that email marketing is not as effective as other channels, small businesses can use this tool to get personal connections with their users. It is easier to personalize or customize your email as in this case as you communicate directly with your targeted audience.

Use Video Marketing

Catchy videos are usually more effective than informative posts on Facebook or Instagram. In a simple one-minute video, you can quickly show your message. The videos may be funny or informative. Although it takes time to create an engaging video, the result is surely worth it.

Online Marketing Challenges for Small Businesses

Along with the opportunities digital marketing offers for further development and stronger market position, small businesses may find themselves too careless in choosing and implementing marketing strategies. This leads to the loss of important resources (money, time) and sometimes, can even ruin the reputation of the brand. 

Here are some common challenges typical to online marketing for small business:

• Incorrect definition of the target audience. No matter how much you invest in your digital marketing strategy, it’s likely to be ineffective and less able to provide a ROI if you have not correctly identified the target audience for your project. In addition, some marketers may make mistakes in choosing specific channels to interact with their audience. All of these mistakes invariably lead to the same undesired outcome: low conversion rates and extremely high costs of attracting and retaining each new customer.
• Misunderstanding of your main competitors. The formation of any digital marketing strategy should also take into account the main competitors of a particular business: what communication channels they use, what techniques they choose to retain customers, what their customers are dissatisfied with, and so on. Only in this case, the chosen strategy allows small businesses to maintain their competitiveness (and, therefore, achieve the desired conversion rates).
• Unprofessional approach. Some small business owners try to cope with the challenges of digital marketing on their own, relying solely on superficial knowledge obtained from the Internet. This is ultimately the wrong approach, which often leads to choosing ineffective tactics and overpaying for methods that initially would not work.
• Revaluation of your own resources. Digital marketing can have a different budget—it all depends on the nuances of a specific business niche and the expectations of customers. At the same time, companies may initially overestimate their internal resources, believing that they will be enough to cope with all this without third-party professional help. As a result, this leads to irrational expenses and not always to a positive effect from the online marketing strategy itself.
• Insufficient digital presence. Digital marketing performance indicators are entirely dependent on how strong your business’s online presence is. This means that in the long term, businesses should strive to implement as many different types of marketing as possible: SEO to attract organic traffic, social media marketing, influencer marketing, email marketing, etc. Without awareness of this global goal, these businesses risk staying in the same place where they started.
• Lack of understanding of the goals, needs, and pain points of customers. Digital marketing must take into account the goals, needs, and pain points of customers. Unfortunately, not all approaches to analyzing the target audience are able to fully understand all these aspects, and often, very important insights remain overlooked. Moreover, detailed marketing research, especially for new business niches, is an expensive procedure, and not every small business can have the budget for it. As a result, understanding their target audience turns out to be built on hypotheses only. All this quite often leads to incorrect positioning of brands and, as a result, the absence of any significant effect from digital marketing.
• Incorrect choice of social networks for promotion. Since social media is the primary tool for online interaction between brands and their customers these days, the wrong social media marketing strategy can ruin your entire business. In particular, problems can be both fundamental—such as the incorrect choice of social platforms for promotion—and more specific—such as the irrelevant content published there.
• Lack of consistency. One of the main parameters for the effectiveness of the chosen digital marketing strategy is a general understanding of the goals and objectives that it must accomplish. In turn, when the strategy consists of randomly testing various digital marketing techniques, this leads to irrational spending, enormous time expenses on obviously ineffective techniques and, as a result, a lack of general progress.
• Lack of regular content marketing. Digital marketing always includes a strategy to create content that provides interest and value to the target audience. At the same time, many business owners decide to assign content creation tasks to their in-house employees. As a result, because they will still be required to perform their regular work responsibilities, new content may not be published regularly or be of poor quality. Neither outcome is acceptable for business since they don’t result in online promotion in the end.
• Lack of adhering to market niche trends. Since almost every business niche is constantly evolving and influenced by certain trends, businesses must consider all of these aspects in their digital marketing strategies. Sometimes, this turns out to be impossible due to improper budget planning for digital marketing and, as a result, instant adaptation to new nuances of the market becomes impossible (for example, in the case of the COVID-19 pandemic when many businesses had to shut down).
• Reluctance to delegate marketing tasks to an outsourcing company. Business owners may be well aware of all the complexities and challenges they are likely to face when independently selecting a digital marketing strategy and implementing it. However, at the same time, the risks associated with hiring a third-party contractor may seem much more significant to them. As a result, underestimating the capabilities of companies whose main activities include digital marketing can cost these businesses enormous resources and hinder significant success in their promotion.
• Excessive conservatism. Digital marketing is about constantly experimenting and testing new hypotheses about their audiences and competitors. In turn, some small business owners, due to their excessive conservatism, may follow outdated promotion methods, which, as a result, does not allow them to achieve the desired business goals.

How Can You Overcome These Challenges?

In general, overcoming all of the above challenges is possible only one way: hiring third-party professionals who have experience promoting in your business niche. NIX’s team will be glad to help you with online business promotion.

Outsourcing digital marketing activities is the approach that will help you save time and money. Moreover, thanks to this, you will be able to unlock the limitless possibilities of digital marketing and fully demonstrate the potential of your business to your target audience.

And all this will be achievable through good interaction with customers during their daily activities—checking social networks, reading blogs, shopping online, searching on Google, and much more.

Overall, the methods your contractor chooses will allow your audience to interact with your marketing materials in a non-invasive way that is not disruptive but rather aligned with their interests.

Here are some more useful tips that will help you cope with the problems described in the previous paragraph.

• Manage your online marketing budget wisely. Online marketing usually requires a significant investment of time and money, and its final size will depend on the marketing methods of your choice. Therefore, it is essential to plan your budget in advance so you don’t miss opportunities to apply the most effective approaches in a timely manner. That’s why you should consider how much you can afford to spend and how it will benefit your business.
• Conduct an analysis of existing digital marketing activities on a regular basis. Digital marketing is constantly evolving, so you should stay up to date with the latest trends and technologies. This implies that you have to check which strategies and tactics will work best for your business and how you can implement them in the least resource-intensive way.
• Hire specialists who will create great content. Most digital marketing strategies rely on relevant content. This means that you will have to regularly create high-quality content that is of interest to your target audience. This approach can help you build long-term relationships with your customer base and increase its overall engagement.
• Outline realistic goals for your digital marketing strategy. Your digital marketing strategy may have a variety of business goals, from raising brand awareness to increasing conversion rate. Therefore, you should develop it according to these predetermined goals while setting deadlines for achieving them.
• Analyze the results of your marketing activities and implement the necessary changes. You should use specialized tools that will monitor and correct your digital marketing campaigns according to the results you obtained during analysis. This will ensure that each of your dollars will be spent on marketing needs wisely.
• Delegate tasks to marketing experts. Digital marketing is a complex task, so outsourcing may be the best option. This will help you save time and money and ensure the profitability of your campaigns.

We hope these guidelines will help you get the most out of your digital marketing efforts without breaking your budget. And, of course, if you are just looking for a reliable contractor both for the implementation of specific digital marketing tasks and for the development of a large-scale marketing strategy, feel free to contact us. We will provide professionals with experience in your business niche so that you will be able to get the maximum ROI in online promotion.

Conclusion

Well, it’s time to wrap up what has been said about online marketing for small business. We hope that now you understand why digital marketing is important for small businesses and are ready to implement effective marketing campaigns for your business goals. You see that it can help boost ROI, target the right audience, get measurable results, get quality leads, build brand awareness, and, of course, save you money. So, entrust this task to a time-proven digital marketing company for small businesses with many years of experience under their belts. This is where you simply can’t do without the services of NIX. We’ll help you implement advanced digital techniques to improve ROI and outsell your competitors!

FAQ

Is it Worth it to Hire a Digital Marketing Agency for Small Businesses?

Hiring a digital marketing agency will help your business involve real professionals in creating and executing your marketing strategy. At the same time, you will not need to burden your in-house specialists and divert them to third-party tasks, or organize your own local marketing department, spending enormous amounts of money and time in the process. Generally speaking, collaborating with such an agency will help you get the most out of your budget for SEO, advertising on social media platforms, content marketing, influencer marketing, and many other types of digital marketing.

How Much does Digital Marketing Cost for Small Businesses?

The cost of digital marketing services for small businesses can vary significantly depending on the types of marketing to be implemented and the overall scope of the chosen tactics. Moreover, the cost for the same type of marketing (for example, social media marketing) can range from approximately $1000 for some basic activities to several thousand dollars to ensure the widest possible coverage of the target audience, audience engagement measuring, and development of a monthly content plan.

How does Online Marketing Differ for Small Businesses Compared to Larger Corporations?

Depending on the scale of your business, you may use different channels of communication with your target audience. Particularly, in the case of small businesses, it’s very important to choose those that will bring the greatest return on investment since often the budgets of such companies for digital marketing are quite limited. Also, strategies for small businesses usually do not include omnichannel and multichannel types of marketing— seamless communication with customers across all existing social media channels—as they have only one platform for presenting their products. And, finally, it’s worth noting that strategies for small businesses must be implemented within acceptable limits of conversion rates because they are unlikely to cope with a large influx of buyers/clients as they do not have enough resources for this.

Can You Explain the Importance of Content Marketing for Small Businesses in the Digital Space?

Online marketing for local business requires constant development and scaling. In particular, having content (text, media files) on your website provides its visitors with all the necessary information about your products, as well as additional insights on how they can be selected, used, etc. In addition, content marketing is part of SEO since the use of relevant keywords and regular content updates ensure your website’s visibility in search engines such as Google.

How can Small Businesses Build and Maintain a Positive Online Reputation through Digital Marketing?

Properly-performed online marketing for local business allows the business to implement consistent interactions with their audience and ensure their engagement. For example, social media marketing, content marketing, email marketing, and some other types of digital marketing, combined into one strategy, will provide you with convenient tools for productive communication with your customers, which, in turn, increases their loyalty to your brand.

How Can Small Businesses Use Data and Analytics to Refine Their Digital Marketing Strategies?

The use of analytic tools such as Google Analytics provide businesses with real-time visibility of key business indicators. In particular, understanding these indicators allows them to evaluate the effectiveness of the chosen marketing strategy and adjust it depending on the obtained insights. This is especially useful for companies that have very limited budgets for marketing initiatives and need to be able to measure the return on investment for every dollar spent.

Are There Any Potential Pitfalls or Mistakes Small Businesses Should Avoid in Their Digital Marketing Campaigns?

There are generally six main mistakes that any small business owner can face:

• Expecting quick results
• Not taking into account the interests and needs of users
• Neglecting to evaluate previously used small business marketing strategies
• Underestimating the power of relevant content
• Incorrectly defining their target audience
• Ignoring customer feedback

How Can Small Businesses Adapt Their Digital Marketing Strategies to Changing Consumer Behaviors and Trends?

There are several best practices for adapting digital marketing strategies to changing consumer behavior and overall market trends:

• Expanding your web presence on new digital platforms
• Personalizing the customer experience
• Monitoring and using real-time data analytics to enhance your digital marketing tactics
• Focusing the digital marketing strategy on interaction with clients and building long-term relationships with them

How Can Small Businesses Measure the Return on Investment (ROI) of Their Digital Marketing Campaigns?

More often than not, small business owners perceive the costs associated with implementing digital marketing strategies as part of the basic cost of maintaining their viability. Thus, ROI is calculated as the quotient of the resulting increase in income divided by marketing costs.