What Is Advertising?

Business people sitting around table looking at colorful charts

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Advertising is a marketing tool that lets you communicate with potential customers about your products or services through paid channels. The goal of advertising for a small business may be to build brand awareness, improve your image, boost engagement, generate leads, or convert potential leads into sales.

Key Takeaways

  • Advertising is a form of paid communication that uses media to promote your business's offerings to customers.
  • Advertising may inform customers about your business, persuade them that your product is best, or motivate them to act, among other things.
  • A key part of marketing and advertising is establishing who your target market is.
  • Online advertising is one of the most common methods of getting your message out; other channels include newspaper ads and local cable TV spots.

How Small Business Advertising Works

Advertising is just one part of a comprehensive marketing strategy. The marketing mix includes four Cs: client/customer, cost, convenience, and communication. Advertising is the paid media part of the communication piece, along with earned media such as public relations and owned media such as a company website.

Goals of Advertising

Advertising has three main purposes:

To inform: Informative advertising helps build awareness about your brand, product or service.

To persuade: Persuasive advertising tries to convince its audience that a company's offerings are the best for their needs. Its goal is to influence consumers or businesses to switch brands, try a new service, or stay loyal to the current brand.

To remind: Reminder ads prompt people to remember their need for a product or service, or how it can benefit them if they buy more soon.

Target Market

Establishing your target market is the critical first step in any advertising campaign. You need to know who your intended audience is before you can reach them. If your target audience is senior citizens, for example, an advertising medium such as Snapchat is a poor choice. Similarly, millennials are much less likely to read newspapers.

Defining the target market involves building a demographic profile of the prospective customer by taking into account criteria such as age, gender, marital status, lifestyles, shopping habits, etc.

It is also important to check out what competitors are doing in their ads to see if there is a target market they're ignoring that may be a good market for you to target.

Common Advertising Methods

There are many different types of advertising that are typically used by small businesses.

Online advertising

Online advertising includes a myriad of advertising opportunities, such as:

  • Search engine advertising: Advertising with a search engine such as Google or Bing allows you to serve your message to a very targeted audience that is looking for information related to your product or service.
  • Pay-per-click advertising: This is a type of ad that runs on one site and drives traffic to your site. You can get extensive customer data from these ads and you only pay when users click on the link.
  • Email ads: This requires a customer email list and adherence to anti-spam regulations. But for customers who opt in, your emails can be a powerful way to get keep your business in their mindset and get the word out about a new product or promotion.
  • Social media: With easy access to user demographic data (such as age, interests, spending habits, etc.) you can finely tailor ads to the audience. Creating a Facebook page for your business and using it to regularly promote products and services can be a cheap way to advertise. For instance, restaurants often use fan pages to promote new menu items or specials and to receive feedback from customers.
  • Local website listings: Many municipalities and Chamber of Commerce chapters have websites that provide listings of local businesses.
  • Classified ads: This is a low-cost way to advertise a household service, such as house cleaning or home repair services.

Newspaper Advertising

While on the decline (U.S. newspaper ad revenue dropped by over 52% between 2002 and 2020) newspaper ads can still be an effective way to reach customers. Many municipalities have special interest newspapers that can be used by businesses for local advertising.

Direct Mail

Direct mail can be costly if sent via post, but brochures and flyers can still be delivered directly to residences or businesses in targeted geographic areas. 

Cable TV and Radio

While network television spots are be out of reach for most small businesses, cable companies often have local information channels that offer affordable advertising for small businesses.

Local Deal Vouchers

Advertising deals through sites like Groupon and Living Social can be a way to acquire new customers quickly without paying anything out of pocket. But the deal site takes a cut and if you've offered the customer a significant discount, you could end up giving away most of your profit.


What's the difference between marketing and advertising?

Advertising is a component of marketing. Marketing involves identifying cutomer needs and figuring out how to meet those needs, while advertising promotes a business and its products or services through paid channels.

What are some benefits of advertising for a small business?

Depending on your message and the media you use, you could educate customers about products or services, persuade them that yours are superior to competitors' offerings, improve their perceptions of your business, or show them new uses for products or services. Your efforts may attract new customers or help you retain your existing customer base.

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Updated by Yasmin Ghahremani
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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. American Marketing Association. "Marketing vs. Advertising."

  2. Lumen Learning. "Reading: Advertising."

  3. U.S. Census. "Internet Crushes Traditional Media: From Print to Digital."

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