Digital marketing for small business: Practical strategies that work

Published Sunday 5 October 2025

Table of contents

• What is digital marketing?
• Types of digital marketing
• How to create your digital marketing strategy
• How much does digital marketing cost?
• Ways to do digital marketing for free
• Paid digital marketing for small business
• How to measure your digital marketing success
• DIY or use a pro?
• Getting started with digital marketing: Your first steps
• Make digital marketing work for your small business
• FAQs on digital marketing for small businesses

Key takeaways

• Start with free digital marketing methods like claiming your Google Business Profile, creating helpful content, and optimising your website for search engines before investing in paid advertising.

• Test multiple marketing channels with small budgets (£4-8 per day) for 2-4 weeks to identify which platforms deliver the best return on investment for your specific business.

• Define your target audience precisely by understanding their demographics, interests, and online behaviour to ensure your marketing messages reach the right people on the right platforms.

• Allocate 5-10% of your revenue to digital marketing and focus your spending on channels that demonstrate measurable results through careful tracking and analysis.

What is digital marketing?

Digital marketing is any online activity that promotes your business and drives sales. For small businesses, this includes social media marketing, email campaigns, search engine optimisation (SEO), and online advertising. It's a world of opportunity where smart targeting can deliver impressive returns.

"Some startups spend their marketing budget quickly because the return on investment can be high," says online business consultant Marc McKeown of FortBrave. "They often earn back what they spend, and more."

Fellow online business consultant, Shaheman Farid of Boobooks Accountants, says that despite this great potential, some startups have a difficult time figuring out how to do digital marketing. "I've seen businesses spend thousands on campaigns without getting a single conversion."

Both agree that the key to digital marketing for small businesses is to test different approaches in a controlled way and see what works. What can you try?

Types of digital marketing

Digital marketing channels fall into two main categories:

• Free marketing: Build your audience through content creation, social media engagement, and search engine optimisation
• Paid marketing: Accelerate growth through targeted advertising, sponsored content, and pay-per-click campaigns

Each approach has distinct advantages and works best for different business goals and budgets.

Ben Charlton

Most people get on the ad platforms and start spending straight away but you don't have to. There's lots of free value out there. Take care of that stuff first.

Ben Charlton owns Air8 Digital marketing agency and runs an online shop, so he tests digital marketing strategies daily. He says free marketing methods can be effective.

How to create your digital marketing strategy

A good plan is the key to getting results. Before you spend a penny, take time to think about your digital marketing strategy. This will help you focus your efforts and make your budget go further.

1. Set clear goals: What do you want to achieve? This could be more website visits, more sales, or more customer enquiries.
2. Know your audience: Who are you trying to reach? Think about their habits and where they spend their time online.
3. Choose your channels: You don't need to be everywhere. Pick one or two channels to start with, like social media or email marketing, based on where your audience is. Many small businesses find that email marketing brings them the highest return on investment.
4. Decide on a budget: Figure out how much you can afford to spend each month. As a benchmark, the average local business allocates 5-10% of its revenue to its digital marketing budget. You can start small and increase your budget as you see what works.

How much does digital marketing cost?

Experimenting, learning, and improving can be rewarding. But it also costs money. So how much will you need to spend?

Is there a way to advertise your small business for free or for a low cost?

Small budget testing makes digital marketing accessible for any business. You can start experimenting with as little as £4-8 per day across multiple platforms.

Effective low-cost approach:

• Daily budget: £4-8 split across 2-3 platforms
• Testing period: Run campaigns for 2-4 weeks minimum
• Success metric: Focus on cost per customer acquisition
• Scaling strategy: Increase spending on platforms that deliver results

If you have time, you can take a careful approach. Online startups often have low operating expenses, so you can test what works. However, McKeown recommends investing in marketing for long-term growth.

"It's a numbers game. You need to get a lot of people to your site so we recommend clients put 40% of their startup budget toward marketing. That's still not expensive when you consider what a bricks-and-mortar store would spend on signage and merchandising. That proportion of spending will come down once you've figured out what works."

Ways to do digital marketing for free

Charlton's goal with his online shop was to spend nothing on advertising. "I'm focused on the free opportunities and haven't had to spend anything yet to get sales." SEO (search engine optimisation) and content marketing are the two main ways he attracts customers for free.

SEO marketing

Search engine optimisation (SEO) helps your business appear when potential customers search for your products or services online. This free marketing strategy can drive consistent, targeted traffic to your website.

Key SEO actions for small businesses:

• Claim your Google My Business listing: Ensures local customers can find you, which is critical since research shows 76% of consumers who search for something 'near me' will visit a business within a day
• Connect to Google Shopping: Displays your products directly in search results
• Optimise your website content: Use keywords your customers actually search for

Even though SEO can bring free traffic to your site, you may choose to invest in it. An SEO consultant can help you improve your search rankings.

Shareable content

Olivia Park

I don't spend money on advertising. I create content aimed at helping my target customer and share it on Instagram or via podcasts. It attracts enough new clients to keep me busy.

When you share helpful advice or interesting stories on social media, others are more likely to share your content. To increase that likelihood, consider that 66% of marketers report funny content is most effective, followed closely by relatable and trendy content. Just ask Olivia Park of Olivia Park Coaching.

Paid digital marketing for small business

There are many ways to invest in digital marketing. The three main approaches are pay-per-click advertising (PPC), social media advertising, and display advertising.

Pay-per-click

Pay-per-click (PPC) advertising puts your business at the top of search results immediately. You only pay when someone clicks on your ad, making it a cost-effective way to reach customers actively searching for what you offer.

PPC works particularly well for small businesses—in fact, 65% of small to mid-sized businesses have a PPC campaign—because you can set daily budgets and target specific locations or customer types.

Paid social (ads or sponsored content)

You can also pay to have your ads or stories appear in the feeds of your target customers on social media, a channel that accounts for 30% of digital advertising spend. Most social platforms allow you to create a particular profile of the type of people who you want to see your ads – so you can hone in on your ideal customer.

Display ads

Marc McKeown

Your ads can follow customers online for a short time. If someone abandons a cart, you can retarget them with an ad offering a discount or free delivery. If they have already made a purchase, you can show them ads for related products.

You can also have your ad displayed in banners on various websites, including social media sites. This isn't often done by small businesses, except as part of a retargeting campaign. Marc McKeown says retargeting can help you close a sale with someone who's previously been to your site.

How to measure your digital marketing success

Testing multiple channels is the key to digital marketing success. What works varies by business, so smart experimentation helps you find your best opportunities.

Your testing approach should include:

• Start broad: Try 3-4 different channels in your first three months
• Set small budgets: Test with minimal investment to reduce risk
• Track everything: Monitor which campaigns deliver the best return on investment
• Double down: Increase spending on channels that work, pause those that don't

Most advertising platforms show you campaign statistics, such as how many people saw your ad, the click-through rate, and the number of purchases. Track your results regularly, as what works now may change over time.

DIY or use a pro?

Choosing between DIY and professional help depends on your time, budget, and technical comfort level.

DIY digital marketing works when you have:

• Time availability: 5-10 hours per week for campaign management
• Learning willingness: Comfort with new platforms and tools
• Budget constraints: Less than £1,000 monthly marketing spend

Professional help makes sense when you:

• Lack time: Need to focus on core business operations
• Want expertise: Require advanced strategies and optimisation
• Have budget: Can invest £1,000+ monthly in marketing

Charlton says that agencies tend to work with businesses that are spending a lot – upwards of a thousand per month – so that may not be an option straight off the bat. But he adds that freelancers can be a great way to start.

"If someone charges you £200 and saves you two days, it can be worth the investment. You may already know someone who can help with digital marketing for your small business. Since 40% of business-to-business marketers list LinkedIn as their most effective channel for finding high-quality leads, it can be a good place to start your search. Try posting on LinkedIn or look for freelancers on Fiverr."

Meanwhile Farid says not to be afraid of using overseas experts. "Just search for 'small digital campaign' and a good agency will find you! We've discovered some great talent at a quarter the price in those markets. Work with your freelancer to create the ads, as collaborating on wording can help ensure your message is clear and effective."

Getting started with digital marketing: Your first steps

Ready to get started? You don't have to do everything at once. Here are a few simple steps to begin your digital marketing journey.

1. Claim your online profiles: Set up your Google Business Profile and social media pages. Make sure your business name, address, and phone number are consistent everywhere.
2. Start with one channel: Pick one marketing type to focus on first. If you're good at writing, maybe start a blog. If you enjoy creating visuals, try Instagram.
3. Test and learn: Try a small, low-cost ad campaign. See what happens. The goal is to learn what your customers respond to.

Make digital marketing work for your small business

Precise targeting determines your digital marketing success. The more specifically you can define and reach your ideal customer, the better your results will be.

Effective targeting requires:

• Customer definition: Know their demographics, interests, and pain points
• Platform selection: Choose where your customers spend their time online
• Message matching: Use language and tone that resonates with them
• Intent alignment: Match your content to their buying mindset

Implementation tip: Create detailed customer profiles before launching any campaigns to ensure your messaging hits the mark.

Approach digital marketing with an open mind. Test different types and carefully track your results. Focus your budget on campaigns that deliver returns.

As your business grows, keeping your finances in order helps you make smarter decisions about your marketing budget. Xero gives you clear financial insights, so you can focus on running your business. Try Xero for free.

FAQs on digital marketing for small businesses

Here are some common questions small business owners may have about digital marketing.

What are 7 types of digital marketing?

There are many types, but seven common ones are search engine optimisation (SEO), content marketing, social media marketing, pay-per-click (PPC) advertising, email marketing, affiliate marketing and mobile marketing. You do not need to do all of them – just choose what is right for your business.

What is the 70-20-10 rule in digital marketing?

This is a simple guide for your content. It suggests 70% of your content should be proven, helpful information for your audience, 20% should be content shared from other sources your audience finds interesting, and 10% can be promotional content about your business

How can I do digital marketing with no money?

You can start by focusing on free tactics. This includes creating useful content for a blog or social media, optimising your website for search engines (search engine optimisation), and building an email list. These methods take time but can be very effective without a large budget.