What Is Online Advertising? A Complete Guide for Small Businesses
- Josh Levine
- Sep 14
- 4 min read
Online advertising has become a must-have strategy for small businesses looking to grow, compete, and attract new customers. But with so many platforms, formats, and buzzwords, it’s easy to feel overwhelmed—especially if you’re just getting started.
This guide will walk you through exactly what online advertising is, how it works, and the most effective strategies for small and local businesses to use in 2025.
What Is Online Advertising?
Online advertising is the process of promoting your business, products, or services through paid placements on digital platforms. These placements can appear in search results, on websites, social media platforms, apps, streaming services, and more.
Think of online ads as the digital version of billboards, flyers, or radio spots—but with one major upgrade: you can target exactly who sees them.
Want to see what paid search ads look like? Here's Google’s official ad example gallery to help you visualize different formats.
Why Online Advertising Matters for Small Businesses
If you’re relying only on word-of-mouth or organic search, you’re leaving money on the table.
Here’s why online ads matter:
Targeted Reach: Only show ads to people most likely to become customers
Fast Results: See traffic, clicks, and leads within days—not months
Flexible Budgets: Start with as little as $10–$20/day and scale as you grow
Trackable ROI: Measure every click, conversion, and cost with built-in analytics
Local Advantage: Use geotargeting to reach people within a specific city or zip code
Whether you're a dentist, restaurant, or real estate agent—online advertising helps put your business in front of the right people, at the right time.
To see how we’ve helped local businesses achieve this, check out our PPC services page.
How Does Online Advertising Work?
Most online advertising works through auction-based platforms. Here’s a simplified breakdown:
You choose your audience. This includes location, age, interests, search behavior, or even job title.
You set your budget. Most platforms let you set daily or monthly limits and control how much you bid per click or impression.
You create your ad. This could be a text ad on Google, a banner ad on a website, or a video ad on Instagram.
Your ad competes in an auction. Platforms show your ad when it wins the auction (based on relevance, budget, and competition).
Users interact with your ad. They click, call, fill out a form, or visit your website—depending on your campaign goal.
You review performance. Platforms like Google Ads or Meta Ads show you clicks, conversions, and ROI in real time.
For a deeper dive into how search ads work, this HubSpot PPC guide is a great resource.
Popular Types of Online Advertising
There are dozens of online ad formats, but here are the most common types that small businesses use:
1. Search Ads (Google, Bing)
Text ads that appear when someone searches for a relevant keyword (like “dentist near me”).
Want to know when Bing Ads might work better than Google? Read our post: When Should Small Businesses Use Bing Ads Over Google Ads?
2. Display Ads
Banner or image ads shown on news websites, blogs, or apps.
3. Social Media Ads (Facebook, Instagram, LinkedIn)
Highly visual ads targeted by interests, behavior, or demographics.
4. Video Ads (YouTube, TikTok)
Short videos that run before or during content—great for storytelling and awareness.
5. Programmatic Ads
Automated, AI-powered ads that show across a wide network of websites and platforms.
Not sure what programmatic advertising is? Explore our PPC platform breakdown
6. Local/Geofencing Ads
Target users in specific zip codes or who visit certain locations—perfect for restaurants or local events.
How to Choose the Right Online Ad Channel
The best platform depends on your goals and audience:
Google Ads: Great for lead generation and intent-based searches
Facebook & Instagram: Best for visual storytelling and audience building
Bing Ads: Cost-effective for local and B2B audiences
YouTube or TikTok: Ideal for brand awareness and short-form content
Programmatic: Best for scaling across multiple channels and retargeting visitors
Need help choosing? Our digital marketing services page explains how we guide clients through multi-platform strategy decisions.
Tips to Get Started with Online Advertising
Here’s what we recommend at Wise Roots LLC for new advertisers:
Start Small Test one platform with a clear goal (e.g., drive 10 calls per week).
Use Geo-Targeting Focus your budget on the areas where your customers actually live or work.
Set Clear KPIs Whether it’s cost per click (CPC), cost per lead (CPL), or return on ad spend (ROAS), define what success looks like.
Track Everything Use conversion tracking, heatmaps, and call tracking to evaluate performance.
Test and Optimize Run A/B tests on headlines, creative, and targeting—small changes can make a big difference.
When to Get Professional Help
Online advertising is powerful—but it’s also competitive. If you're spending more than $500/month and not seeing results, it might be time to call in expert support.
Wise Roots LLC offers fully managed online advertising campaigns that take the guesswork out of PPC, so you can focus on running your business.
Final Thoughts
Online advertising levels the playing field. You no longer need a massive budget to compete—you just need a smart strategy.
Whether you’re a brand-new startup or a local business ready to grow, understanding how online ads work is the first step to building a profitable marketing engine.
Need help launching your first campaign? Let Wise Roots LLC guide you from setup to scale.
Book your free strategy session today and start seeing real results from your online advertising.
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