What is online advertising :
A comprehensive guide
For local business owners

In today’s digital age, online advertising has become an essential tool for businesses of all sizes. It allows businesses to reach their target audience, increase brand awareness, and drive traffic to their website. However, for local business owners with limited online marketing knowledge, navigating the world of online advertising can be overwhelming.

In this comprehensive guide, we will break down the fundamentals of online advertising and provide actionable insights that local business owners can apply to their advertising strategies. From understanding the different types of online advertising to developing effective campaigns, this guide will equip you with the knowledge and tools needed to succeed in the online advertising space.

What Is Online Advertising?

Online advertising refers to the practice of promoting products, services, or brands on the internet through various paid digital channels. It allows businesses to reach a wider audience, increase brand visibility, and drive targeted traffic to their websites. Online advertising offers a range of advertising options, including search engine advertising, social media advertising, display advertising, native advertising, video advertising, and more.

With the increasing number of internet users and the prevalence of digital devices, online advertising has become a powerful tool for businesses to connect with their target audience. It provides businesses with the ability to reach potential customers at the right time and in the right place, delivering relevant messages that resonate with their needs and interests.

Benefits of Online Advertising for Local Businesses

Online advertising offers numerous benefits for local businesses. Here are some key advantages :

Increased reach and visibility

Online advertising allows local businesses to expand their reach beyond their physical location. With the ability to target specific geographic areas, businesses can connect with potential customers in their local community and beyond. This increased visibility can help businesses attract new customers and generate more leads

Targeted advertising

One of the biggest advantages of online advertising is its ability to target specific audiences. Businesses can define their target audience based on demographics, interests, behaviors, and more. This targeted approach ensures that ads are displayed to the most relevant audience, increasing the chances of engagement and conversion.


Compared to traditional forms of advertising, online advertising can be more cost-effective. With options like pay-per-click (PPC) advertising, businesses only pay when someone clicks on their ad, ensuring that their budget is spent on actual engagement. Online advertising also allows businesses to set their own budgets and adjust them as needed.

Measurable results

Unlike traditional advertising methods, online advertising provides businesses with detailed data and analytics. This allows businesses to track the performance of their ads, measure the return on investment (ROI), and make data-driven decisions to optimize their campaigns. This level of measurability helps businesses understand what works and what doesn't, allowing them to refine their advertising strategies for better results.

Flexibility and control

Online advertising offers businesses flexibility and control over their campaigns. Businesses can easily adjust their ad settings, budgets, and targeting parameters to optimize their campaigns in real-time. This flexibility allows businesses to respond to market changes, experiment with different strategies, and find the best approach that works for their specific goals.

How Paid Advertising Works

Paid advertising, also known as pay-per-click (PPC) advertising, is a common form of online advertising where businesses pay for their ads to be displayed on digital platforms. The most popular PPC platform is Google Ads, which allows businesses to create and manage their ad campaigns on Google’s search engine and partner websites.

When setting up a paid advertising campaign, businesses select keywords that are relevant to their products or services. These keywords trigger the display of their ads when users search for those terms on search engines. Businesses bid on these keywords, indicating the maximum amount they are willing to pay for each click on their ad.

The ad auction system determines which ads are shown and in what order. The auction takes into account factors such as ad quality, bid amount, and the relevance of the ad to the user’s search query. The highest bidder doesn’t always win; Google also considers the quality and relevance of the ad to ensure a positive user experience.

Paid advertising offers businesses the opportunity to reach a highly targeted audience and pay only when someone clicks on their ad. This cost-effective approach allows businesses to maximize their ad spend and generate measurable results.

Setting Advertising Goals

Before diving into online advertising, it’s important for local businesses to establish clear advertising goals. Setting specific, measurable, achievable, relevant, and time-bound (SMART) goals will help businesses stay focused and track their progress.

Here are some common advertising goals for local businesses :

Increase brand awareness

If your business is relatively new or unknown in your local area, increasing brand awareness may be a primary goal. Online advertising can help businesses reach a wider audience and introduce their brand to potential customers. By running targeted ad campaigns, businesses can increase their visibility and create a positive brand image.

Drive website traffic

For businesses with an online presence, driving traffic to their website is a common goal. Online advertising can help businesses attract more visitors to their website, increasing the chances of generating leads and conversions. By optimizing their ad campaigns and targeting the right audience, businesses can drive quality traffic to their website and maximize the number of customers coming in.

Generate leads and conversions

Converting website visitors into leads or customers is a crucial goal for many businesses. Online advertising can be a powerful tool for lead generation, allowing businesses to capture contact information and nurture leads through targeted campaigns. By optimizing their landing pages and ad copy, businesses can increase their conversion rates and drive more valuable leads.

Promote special offers or events

If your business is running a special promotion or hosting an event, online advertising can help spread the word and attract attendees. By targeting specific audiences and using compelling ad copy, businesses can effectively promote their offers or events and drive engagement.

Increase sales and revenue

Ultimately, many businesses aim to increase their sales and revenue. Online advertising can play a significant role in driving sales by reaching potential customers at the right moment in their buying journey. By creating compelling ads, optimizing landing pages, and implementing effective conversion tracking, businesses can drive more sales and improve their bottom line.

Types of Online Advertising

Online advertising offers a variety of options for local businesses to reach their target audience. Understanding the different types of online advertising can help businesses choose the right platforms and strategies for their advertising campaigns. Let’s explore some of the most popular types of online advertising :

Search engine advertising

Search engine advertising, also known as search ads or pay-per-click (PPC) ads, allows businesses to display their ads in search engine results pages (SERPs) when users search for specific keywords. Google Ads is the most popular search engine advertising platform, but other search engines like Bing and Yahoo also offer similar advertising options.

Search ads are displayed at the top or bottom of the search results, making them highly visible to users actively searching for information or solutions. Businesses bid on keywords related to their products or services and pay when someone clicks on their ad.

The key advantage of search engine advertising is its intent-driven nature. Users who see search ads are actively looking for information, products, or services related to the keywords they searched for. This makes search ads highly targeted and effective in reaching potential customers at the right moment.

Social media advertising

Social media advertising allows businesses to promote their products, services, or brand on various social media platforms. With billions of active users on platforms like Facebook, Instagram, Twitter, LinkedIn, and Pinterest, social media advertising offers a vast audience for businesses to connect with.

Each social media platform offers its own advertising options and targeting capabilities. Businesses can create ad campaigns that target specific demographics, interests, behaviors, or location. Social media ads can take various formats, including image ads, video ads, carousel ads, story ads, and more.

The advantage of social media advertising is the ability to reach highly specific and engaged audiences. Social media platforms provide detailed user data, allowing businesses to target ads to the most relevant audience. Additionally, social media ads offer opportunities for engagement, such as likes, comments, and shares, which can help increase brand visibility and generate social proof.

Unlike search engine ads, paid advertising on social media is much different because instead of using keywords to trigger your ads, you should actually implement a more educational approach through the use of marketing and sales funnels. People on social media are having fun, watching videos, reading stuff that they find interesting. You should focus on producing content that will help you identify and attract your ideal buyer.

Display advertising

Display advertising involves placing visual ads on third-party websites, apps, or platforms. These ads can be in the form of banners, images, videos, or interactive media. Display ads can be highly targeted based on factors such as demographics, interests, and browsing behavior.

The Google Display Network is the largest display advertising network, reaching over two million websites and apps. Businesses can run display ad campaigns through Google Ads, targeting specific audiences and placements based on their advertising goals. Other ad networks, such as Facebook's Audience Network, also offer display advertising options.

Display advertising allows businesses to reach a wide audience and increase brand visibility. By placing ads on relevant websites or apps, businesses can target users who are likely to be interested in their products or services. Display ads can be particularly effective for remarketing campaigns, where businesses target users who have previously visited their website.

Native advertising

Native advertising is a form of online advertising that blends seamlessly with the content and design of the platform it appears on. Unlike traditional display ads, native ads match the look and feel of the surrounding content, making them less intrusive and more engaging for users.

Native ads can take various forms, such as sponsored articles, recommended content, or promoted listings. They are typically labeled as "sponsored" or "ad" to differentiate them from the regular content. Native advertising allows businesses to reach audiences in a non-disruptive way, providing valuable content that aligns with the platform's style and context.

By integrating their ads with relevant content, businesses can increase engagement, build trust, and drive conversions.

Video advertising

Video advertising involves the use of video content to promote products, services, or brands. With the rise of video consumption on platforms like YouTube, TikTok, Instagram, And even Facebook, video ads have become an effective way for businesses to capture the attention of their target audience.

Video ads can be in-stream, meaning they play before, during, or after other video content, or they can be standalone video ads displayed on social media feeds or websites. Businesses can create engaging video ads that tell a story, showcase products or services, or provide valuable information to viewers.

The advantage of video advertising is its ability to convey messages effectively and engage users on an emotional level. Video ads can be highly memorable and shareable, helping businesses increase brand awareness and reach a wider audience.

Influencer marketing

Influencer marketing involves partnering with influential individuals on social media to promote products, services, or brands. Influencers have a dedicated following and can sway the opinions and behaviors of their audience.

Businesses can collaborate with influencers to create sponsored content, such as product reviews, sponsored posts, or brand endorsements. By leveraging the influencer's credibility and reach, businesses can increase brand visibility, generate social proof, and drive sales.

Influencer marketing is particularly effective when targeting niche audiences or specific demographics. Businesses can find influencers who align with their brand values and audience interests, ensuring a more targeted and relevant reach.


Retargeting, also known as remarketing, is a strategy that allows businesses to target users who have previously interacted with their website or digital content. By using cookies or pixel tracking, businesses can show ads to users who have shown interest in their products or services.

Retargeting campaigns can be highly effective in driving conversions as they target users who are already familiar with the brand or have expressed interest. By reminding users of their previous interaction, businesses can encourage them to take the desired action, such as making a purchase or filling out a form.

Retargeting ads can be displayed on various platforms, including search engines, social media, and display networks. They can be customized based on the user's behavior, such as showing specific products they have viewed or offering special discounts to encourage conversion.

Email marketing

Although not typically considered as online advertising, email marketing can be a powerful tool for businesses to reach their audience and promote their products or services. By building an email list of subscribers, businesses can send targeted emails with personalized content, offers, or updates.

Email marketing allows businesses to nurture leads, drive engagement, and generate conversions. By segmenting their email list based on demographics, interests, or behaviors, businesses can tailor their messages to specific audience segments, increasing the chances of engagement and conversion.

Email marketing also provides valuable data and analytics, allowing businesses to track open rates, click-through rates, and conversions. By analyzing this data, businesses can optimize their email campaigns and refine their targeting strategies.

Choosing the Right Advertising Platforms

With a wide range of online advertising platforms available, choosing the right ones for your business can be overwhelming. Each platform offers unique features, targeting options, and audience demographics. Here are some popular online advertising platforms and their key characteristics :

Google ads

Google Ads is the leading search engine advertising platform, allowing businesses to display their ads on Google's search engine results pages (SERPs) and partner websites. With Google Ads, businesses can target specific keywords, geographic locations, and demographics. Google Ads offers various ad formats, including text ads, image ads, video ads, and app ads.

Google Ads provides robust targeting options, allowing businesses to reach users who are actively searching for products or services related to their business. The platform offers detailed analytics and optimization tools to measure the performance of ad campaigns and make data-driven decisions.

While powerful, I find that Google Ads can get quite expensive without any results to show for, especially if you’re a beginner.

Facebook ads

Facebook Ads is a popular social media advertising platform that allows businesses to reach their target audience on Facebook and Instagram. With Facebook Ads, businesses can create highly targeted ad campaigns based on demographics, interests, behaviors, and location. The platform offers various ad formats, including image ads, video ads, carousel ads, and story ads.

Facebook Ads provides businesses with detailed analytics and reporting, allowing them to track the performance of their ad campaigns and optimize their targeting strategies. The platform also offers advanced features like custom audiences, lookalike audiences, and retargeting to enhance ad targeting and reach.

I love the Facebook Ads platform, I find that it’s affordable, intuitive, and it aligns perfectly with the marketing funnel framework. You can honestly reach your audience with as little as $10 per day.

Instagram ads

Instagram Ads is the advertising platform for businesses to reach their target audience on the popular visual-based social media platform. With Instagram Ads, businesses can create engaging ad campaigns using image ads, video ads, carousel ads, and story ads. The platform offers targeting options based on demographics, interests, behaviors, and location.

As part of Facebook Ads, Instagram Ads provides businesses with access to Facebook's powerful targeting capabilities and analytics. Businesses can leverage Instagram's highly engaged user base and visually appealing format to increase brand visibility and drive engagement.

Facebook Ads and Instagram Ads are both managed from within the business manager on Facebook and the setup is almost exactly the same for both, you can even run both at the same time.

Linkedin ads

LinkedIn Ads is a social media advertising platform specifically designed for professionals and businesses. With LinkedIn Ads, businesses can target professionals based on job titles, industries, skills, and more. The platform offers various ad formats, including sponsored content, sponsored InMail, text ads, and dynamic ads.

LinkedIn Ads provides businesses with unique targeting options to reach professionals in specific industries or job functions. The platform is particularly effective for B2B advertising, allowing businesses to connect with decision-makers and influencers in their target industries.

Twitter ads

Twitter Ads (now X) is a social media advertising platform that allows businesses to reach their target audience on the popular microblogging platform. With Twitter Ads, businesses can create ad campaigns using promoted tweets, promoted accounts, and promoted trends. The platform offers targeting options based on demographics, interests, behaviors, and location.

Twitter Ads provides businesses with real-time engagement and conversation opportunities. Businesses can leverage Twitter's trending topics and hashtags to increase brand visibility and drive engagement. The platform also offers advanced targeting features like keyword targeting and tailored audiences.

Pinterest ads

Pinterest Ads is a visual discovery platform that allows businesses to promote their products or services through pins. With Pinterest Ads, businesses can create engaging ad campaigns using image ads, video ads, carousel ads, and shopping ads. The platform offers targeting options based on demographics, interests, behaviors, and keywords.

Pinterest Ads provides businesses with the opportunity to reach users who are actively searching for ideas, inspiration, and products. Businesses can leverage Pinterest's visual nature and high-intent user base to drive traffic, increase brand visibility, and generate leads.

YoutTube ads

YouTube Ads is the advertising platform for businesses to reach their target audience on the popular video-sharing platform. With YouTube Ads, businesses can create video ad campaigns that appear before, during, or after other YouTube videos. The platform offers targeting options based on demographics, interests, behaviors, and keywords.

YouTube Ads provides businesses with the opportunity to engage users through video content. Businesses can create compelling video ads that tell a story, showcase products or services, or provide valuable information to viewers. With YouTube's vast user base and extensive reach, businesses can increase brand visibility and drive engagement.

Keep in mind that YouTube Ads are managed from the Google Ads platform not directly from YouTube. If you mainly focus on creating video content and if that content has had success on social media, YouTube might be a good option to explore for building some type of video funnel, and of course, you can implement the same funnel on Facebook and Insta using ads as well.

When selecting advertising platforms, it's important to consider your target audience, advertising goals, and budget. Each platform offers unique features and targeting capabilities, so it's essential to choose the ones that align with your business objectives and audience demographics.

Creating Effective Ad Campaigns

Creating effective ad campaigns is essential for online advertising success. Here are key steps to consider when developing your ad campaigns :

Define your target audience

Before creating your ad campaigns, it's crucial to define your target audience. Understanding your audience's demographics, interests, behaviors, and motivations will help you tailor your ad messaging and targeting strategies. Conduct market research, analyze customer data, and create buyer personas to identify your ideal audience segments.

Keyword research and selection

For search engine advertising, keyword research is essential. Identify keywords that are relevant to your products or services and have a high search volume. Use keyword research tools, such as Google Keyword Planner and SEMrush, to discover new keyword opportunities and analyze their performance.

Ad Copy and design

Craft compelling ad copy and design that effectively communicates your message and captures the attention of your target audience. Use persuasive language, clear calls-to-action (CTAs), and relevant visuals to engage users. Test different ad variations to identify the most effective copy and design elements.

Landing page optimization

Optimize your landing pages to ensure a seamless user experience and drive conversions. Align your landing page content with your ad messaging to provide a consistent and relevant experience. Use clear headlines, persuasive copy, and compelling visuals to engage users and encourage them to take action.

A / B testing

Experiment with different ad variations, targeting options, and landing page elements to optimize your campaigns. Conduct A/B tests to compare the performance of different ad elements and identify the most effective strategies. Test variables such as ad headlines, copy, visuals, targeting parameters, and landing page layouts.

By following these steps and continuously optimizing your ad campaigns, you can improve your advertising performance and achieve better results.

Tracking and Measuring Campaign Performance

Tracking and measuring the performance of your ad campaigns is crucial for optimizing your advertising strategies and maximizing your ROI. Here are key steps to track and measure your campaign performance :

Set up conversion tracking

Implement conversion tracking on your website to measure the actions users take after clicking on your ads. Set up tracking codes or pixels to track conversions such as form submissions, purchases, or sign-ups. Use conversion tracking tools provided by advertising platforms or third-party analytics tools like Google Analytics.

Key metrics to monitor

Monitor key metrics to assess the performance of your ad campaigns. Key metrics include click-through rate (CTR), conversion rate, cost per click (CPC), cost per acquisition (CPA), return on ad spend (ROAS), and overall campaign ROI. Analyzing these metrics will help you identify areas for improvement and optimize your campaigns.

Analyzing campaign data

Regularly analyze campaign data to gain insights and make data-driven decisions. Use analytics tools provided by advertising platforms, such as Google Ads or Facebook Ads Manager, to understand campaign performance at a granular level. Identify trends, patterns, and areas of improvement, and adjust your campaigns accordingly. By tracking and analyzing your campaign performance, you can identify what's working and what's not, make data-driven optimizations, and achieve better results with your online advertising efforts.

Optimizing and Scaling Your Advertising Campaigns

Optimizing and scaling your advertising campaigns is essential for driving better results and expanding your reach. Here are key strategies for optimizing and scaling your campaigns :

Campaign optimization strategies

Continuously optimize your ad campaigns to improve their performance. Test different ad variations, targeting options, and bidding strategies to find the most effective combinations. Optimize your landing pages for better conversion rates. Use ad scheduling to show your ads at peak times. Monitor your campaign metrics and make data-driven optimizations based on the insights you gather.

Scaling your campaigns

When scaling your campaigns, consider increasing your budget, expanding your target audience, or exploring new advertising channels. Gradually increase your budget while monitoring the impact on your campaign performance. Expand your target audience by targeting new demographics, locations, or interests. Experiment with new advertising channels to reach a wider audience and explore untapped potential.

By continuously optimizing and scaling your advertising campaigns, you can achieve better results, increase your reach, and drive more conversions.

Local SEO and Online Advertising Integration

Integrating local search engine optimization (SEO) with your online advertising efforts can maximize your visibility and drive more targeted traffic to your business. Here are key considerations for integrating local SEO and online advertising :

Importance of local SEO

Local SEO is the process of optimizing your online presence to rank higher in local search results. It involves optimizing your website, creating local business listings, managing online reviews, and targeting location-specific keywords. Local SEO helps businesses appear in local search results when users search for products or services in their area.

Local SEO best practices

To optimize your local SEO, ensure your website includes relevant location-based keywords, has consistent business information across online directories, and has a dedicated page for each location or service area. Encourage customers to leave online reviews, and respond to reviews in a timely and professional manner. Implement schema markup to provide search engines with structured data about your business.

Integrating local SEO with online advertising

Integrating local SEO with your online advertising efforts can enhance your overall visibility and drive more targeted traffic. Use location-specific keywords in your ad campaigns to reach users searching for products or services in their area. Include your business address and contact information in your ads to encourage local engagement. Leverage local SEO insights to inform your ad targeting and messaging strategies.

By integrating local SEO with your online advertising, you can increase your local visibility, reach more relevant customers, and drive more conversions.

Budgeting for Online Advertising

Determining your advertising budget is an important part of planning your online advertising campaigns. Here are key considerations for budgeting for online advertising :

Determining your advertising budget

When determining your advertising budget, consider your overall marketing budget, your business goals, and your expected return on investment. Allocate a portion of your marketing budget specifically for online advertising. Consider factors such as the competitiveness of your industry, the cost per click (CPC) of your chosen keywords, and the expected conversion rates.

Cost estimation and ROI calculation

Estimate the costs of running your online advertising campaigns based on factors such as ad spend, agency fees (if applicable), and any additional costs like landing page development or creative production. Calculate your expected return on investment (ROI) by estimating the revenue generated from your advertising efforts and comparing it to your total advertising costs.

When budgeting for online advertising, it's important to strike a balance between investment and expected returns. Start with a conservative budget and adjust it based on the performance of your campaigns and the insights you gather.

Hiring an Online Advertising Agency

For businesses with limited resources or expertise in online advertising, hiring an online advertising agency can be a valuable investment. Here are key considerations when hiring an online advertising agency :

Benefits of hiring an agency

Online advertising agencies have the expertise and experience to create effective ad campaigns, optimize performance, and drive results. They stay up to date with industry trends and best practices, allowing businesses to leverage the latest strategies and technologies. Hiring an agency can save businesses time and resources, allowing them to focus on their core operations.

Selecting the right agency

When selecting an online advertising agency, consider their expertise, industry experience, track record, and client testimonials. Look for agencies that specialize in your industry or have experience working with businesses similar to yours. Consider their pricing structure, contract terms, and available services to ensure they align with your budget and goals.

Working with an agency

When working with an online advertising agency, establish clear communication channels and expectations. Provide the agency with all the necessary information about your business, target audience, and advertising goals. Collaborate closely with the agency to develop ad campaigns, review performance reports, and make data-driven optimizations.

By hiring the right online advertising agency, businesses can benefit from expert guidance, optimized campaigns, and improved results.


Online advertising is a powerful tool for local businesses to reach their target audience, increase brand visibility, and drive conversions. By understanding the different types of online advertising, choosing the right advertising platforms, creating effective campaigns, and tracking performance, businesses can optimize their online advertising strategies and achieve better results.

Integrating local SEO with online advertising can further enhance visibility and drive targeted traffic to local businesses. By budgeting for online advertising and considering the option of hiring an online advertising agency, businesses can maximize their advertising efforts and achieve their marketing goals.

As a local business owner, investing in online advertising can help you stay competitive in today’s digital landscape. By implementing the strategies and insights provided in this guide, you can effectively navigate the world of online advertising and drive success for your business.