A Definitive Guide to Using Online Marketing to Attract New Customers

A Definitive Guide to Using Online Marketing to Attract New Customers

online marketing for small businesses

  • Between 2005 and 2017, the number of internet users increased 3.5-fold from 1.02 billion to 3.58 billion. Consumers are turning to online for shopping, communicating, working, learning and making money.
  • Because there are many options to choose from, you could market online with very little money and still reach your targeted audience.
  • Keep reading if you're looking for a detailed and digestible overview of online marketing for SMEs and how to use it to attract new customers.

In this article, we dive into what online marketing actually is, why you should be marketing online, how to create an online marketing strategy, sales funnels and budgets.

What Is Online Marketing?

Online marketing is any marketing strategy that promotes a brand, business or person through channels or mediums that require an internet connection such as social media, search engines, websites and email marketing.

Online marketing is also referred to as internet marketing.

What Are the Benefits of Online Marketing?

There are 3 main reasons why you should be marketing your small business online:

  1. More and more people are online
  2. Online marketing is easier to measure
  3. Online marketing can be cost effective

1. More and more people are online

This is a no-brainer. Between 2005 and 2017, the number of internet users increased 3.5-fold from 1.02 billion to 3.58 billion. Consumers are turning to online for shopping, communicating, working, learning and making money.

2. Online marketing is easier to measure

Compared to traditional marketing, you get more data for your campaigns and online channels. Best of all, they are automatically available and, in some cases, free. Compare this to the traditional direct mailing strategy, which requires a manual process of gathering data to know whether your campaign has been a success or a failure.

3. Online marketing can be cost effective

Because there are many options to choose from, you could market online with very little money and still reach your targeted audience. You can choose to hire people to help you market online or do everything yourself.

What Is the Difference Between Online and Digital Marketing?

The two terms are often used interchangeably but there is a subtle difference between them. Online marketing, which runs over the internet, is often considered a subset of digital marketing.

On the other hand, digital marketing encompasses all digital channels. A video game ad, that doesn’t require an internet connection, is considered digital marketing. Digital billboards, TVs and radio channels are further examples.

What Are the Different Types of Online Marketing?

Generally, online marketing falls into three different categories:

  1. Owned Media
  2. Earned Media
  3. Paid Media

1. Owned Media

Owned media are assets that you create and control. These types of online marketing are:

  • Your website and blogs
  • Social media channels
  • Email marketing
  • Content marketing
  • Online listing or directories

2. Earned Media

Earned media assets are the exposure you earn through online word of mouth. These types of online marketing are:

  • Search engine optimization (SEO)
  • Social media shares
  • Online reviews
  • Appearing in online content such as news sites
  • Guest blogging on external websites

3. Paid Media

Paid media assets are mainly online advertising where you pay to market online. These types of online marketing include:

  • Social media marketing 
  • Search engine marketing (SEM) and advertising
  • Banner advertising
  • Affiliate advertising
  • Online sponsorship

You should always consider using a range of owned, earned and paid online marketing to cover the touch points where your target audience is likely to be. In other words, don't put all of your marketing eggs in one basket.

For example, a local hairdresser could aim for a mix of:

• Owned - a blog with client hairstyles, Facebook and Instagram accounts to organically grow a community and have a conversation with clients and prospects

• Earned – online reviews from clients and articles in the local newspaper

• Paid – a Facebook ad campaign to increase bookings during off-peak hours

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Which Online Marketing Strategy Should SMEs Use?

With many tools, platforms and digital channels available, it’s hard to pinpoint which marketing strategy is right for SME businesses. 

There are three steps that will guide you towards picking the right SME online marketing strategy:

Step 1: Choose your objective

What do you want to achieve with your marketing efforts? Do you want to:

  • Increase brand awareness?
  • Drive traffic to your website?
  • Build an online community around your brand?
  • Generate sales?

Once you have identified your core goals, you can move onto the next step.

Step 2: Determine your budget

You should be spending between 5% and 10% of your annual turnover on marketing. Divide this number by twelve and you’ll have a rough monthly budget.

Depending on how big your budget is, it will determine:

  • The channels you use
  • The paid ads you put out
  • The organic growth strategy you’ll use

If your budget is small, it's likely you will need to do most of the work yourself, forego ads and choose channels that maximise your budget efficiently such as using social media.

Step 3: Define your target audience

Who does your business serve? When defining who your ideal client is, consider:

  • Are they businesses or consumers?
  • Does your offering fit a specific industry?
  • What’s their demographics? (gender, age, location, relationship status, kids or no kids, pets etc.)

For example, if you are a plumber in Sydney, it would be wise to include Facebook and SEM in your online marketing strategy to attract new customers and use email marketing to nurture existing customers.

If you are a financial planner who helps small business owners, a mix of LinkedIn, display advertising and email marketing can help you attract and nurture your ideal clients.

Once you have gone through these steps, you’ll have the solid foundation to know what channels to find your ideal client on and then plan out your content and how you will engage them.

How Do You Build an Online Marketing Sales Funnel?

When building an online marketing sales funnel, there are three phases to consider:

  • Phase 1: Building awareness of your business – the “get to know me” phase
  • Phase 2: Engagement with your current and potential customers – the “like me” phase
  • Phase 3: Converting prospects into clients – the “trust me” phase

Phase 1: Awareness 

Like any relationship, you can’t expect someone to marry you after the first date. You must take the time to get to know each other and see if you are a good fit.

In the awareness phase, you’re aiming to increase the visibility of your business to your ideal target market. Generally, businesses are looking to educate their target buyers on the problems the business is trying to solve. For example, a hairdresser in the example above may start a content series on how to care for your hair on a budget.

Tactics to increase brand awareness:

  • Posting interesting content on social media
  • Writing blogs on your website and then re-posting on other channels
  • Creating short video blogs (vlogs) and posting to YouTube
  • Start a podcast, and share it out on your website and social media channels

Phase 2: Engagement

This is when you need to build a community around your brand – people who you can have a conversation with to turn them into customers. These are people who have expressed interest in your business from the awareness phase.

Tactics to increase engagement:

  • Generating conversation through Facebook Live event.
  • Getting people to sign up to your email list and sending helpful content
  • Using ads to remarket to people who have visited your website or engaged with your content

Phase 3: Conversion

Conversion happens when you have gained trust with those people in the engagement phase. This is the chance for you to convert them to customers. Once they buy from you or use your service, they are the best sources to help convert other people to customers.

Tactics to increase conversion:

  • Asking customers to post online reviews on, for example, Google and Facebook
  • Showcase their experience through case studies
  • Have your customers give a testimonial
  • Ask customers to share your content on social media

The process of building an online marketing sales funnel does not necessarily move in a linear line. You will find that you’re constantly moving through all three phases as you build up your business.

How to Use Online Marketing to Attract More Customers

What Budget Do You Need for Online Marketing?

Deciding on a budget for online marketing depends on which area of online marketing you are focusing on. We've broken down a couple of areas below.

1. Online Content Production

Producing your own content for a website, blogs and social media will save you a lot of money.

If you need to outsource the content creation, prices for copywriting and social media management vary depending on who you speak with and if you decide to go with someone locally or contract someone overseas.

You will save money by offshoring this element, but the quality of work may not be the same standard. Other cost factors include experience, size of the business and how much you outsource. For example, 4 blogs per month may cost less per blog than just having one written.

2. Online Advertising

However, the online world is increasingly becoming a ‘pay to play’ environment as competition is getting stiffer. You should consider setting a budget for paid advertising to promote your brand online.

In terms of how much you should be spending on your marketing, conventional wisdom puts the figure at anywhere between 5% and 10% of your annual turnover.

How to Use Online Marketing to Attract More Customers

What Are the Typical Monthly Costs for Online Marketing for SMEs?

Here are some of the average monthly costs you can expect to pay for social media, SEO and SEM.

Social media advertising costs

Facebook is one of the best advertising channels for SMEs as the targeting options are better. You can keep track of your campaign’s KPIs and it is generally lower in costs, while giving you an audience of 15 million Australians who are using it monthly. If you execute everything well, you can expect to get a positive return on investment (ROI) with an ad spend of as little as $500 per month.

LinkedIn costs

You’re looking at a cost per click (CPC) of anywhere from $5 to $10. Depending on how much traffic you need to drive to your website, it is usually out of the reach for most smaller SMEs but can be a highly valuable channel for B2B brands.


If you’re looking to hire someone that’s competent and reputable, you’re looking at a budget of approximately $1,000 per month


Depending on the time of year, how competitive your industry is, and what keywords you are trying to target, you’d be looking at a budget starting from $1,500 per month to run a decent campaign.

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Paula O'Sullivan


Director, Digital Strategist and Chief of Social for Possum Digital. Loves cheese. Plays netball. Obsessed with cooking good food.

Comments (1)
Justine Garcia

Justine Garcia, Community Manager at

Good points Paula. There are really a lot of options for online marketing. Not all businesses are the same though, each business can focus on certain online marketing strategy to attract more clients and be more successful.