Online advertising for small businesses – what you need to know

Setting up your website, online store or social media page is the first step to bringing your business online. Next comes growing awareness with online advertising. What are the basics you need to know?

It’s clear today that more and more consumers and businesses have turned to the internet and social media as sources of information when it comes to product research and purchases.

To be able to tap on this huge market, businesses of all sizes have created their online presence in the form of simple websites, ecommerce stores or social media pages. These function as a “storefront” for businesses to get connected to their customers.

However, the challenge most small businesses face when putting themselves online is how can they get the attention of potential customers, and to stand out from the clutter.

Getting attention, organically

Most of us would use a search engine like Google to look for particular products and services that would meet our needs.

It is challenging for most website owners to organically rank high in search results, given that it takes time to build up the relevance and credibility of your website in Google’s ranking. This will require a consistent practice of Search Engine Optimisation.  

Speeding up results

For small businesses to speed up this process, there’s the option of doing online advertising. It allows businesses with fairly modest budgets to have a chance to reach relevant potential customers, and be in the same space as bigger enterprises within the industry.

The most common and effective online advertising channels for small businesses are Google Ads (search engine advertising / marketing) and Facebook advertising (social media advertising / marketing).

Online advertising basics

When you, as a consumer, perform a search on Google for a product or service, the search platform will “match” your search keywords or phrase to both organic website listings and advertisement from Google Ads.

Here’s basically how Google Ads works when you run a search engine advertising campaign:

  • User searches for certain keywords and phrases in Google Search.
  • Companies create advertising campaigns in Ads and specify keywords that they think their customers search for.
  • Google Ads lets companies bid against each other for a slot on the search results page and have their ads displayed.
  • Google Ads will determine which position each ad gets depending on
    • Bid price – how much a company is willing to pay when a user clicks on the ad.
    • Quality score – how relevant the company’s website content is with regards to the search keywords (determined by Google).
  • The various ads will then be displayed at the start and end of the search results page.
  • Every time a user clicks on one of these ads, the company will pay that amount to Google, out of a budget that is set at the start of the campaign (like a credit system).
  • Customers will then be directed to the website specified by the company.

For Facebook, the approach is a little different. Given their large pool of data on Facebook users, they are able to offer advertiser the ability to identify potential customers using that data, and show them ads that they think they might be interested in.

  • When setting up a Facebook advertising campaign, companies will specify the “profile” of their potential customers, which may include:
    • Gender,
    • Location,
    • Interests, etc.
  • Facebook will then match millions of users to these profiles and serve them the advertisements in their timeline.
  • The companies will specify a campaign budget, like what is done in Google Ads, and will pay Facebook an amount for each time a user clicks on the ad (similar credit system).
  • Given that there are also multiple companies that bid for the same profile, the cost for each click will vary based on competition.
  • Customers will then be directed to the website specified by the company.

The price to advertise on Google and Facebook can be as low as cents per click, or a few dollars, depending on how much the competing companies are willing to bid. That said, it still presents a huge opportunity for small businesses to be able to reach the massive online market.

The best thing for business owners to do is to start advertising online and learn from the experience. Run a few advertising campaigns with small budgets and see what combination of messaging, targeting and pricing works the best for you.