Small business advertising vs. marketing guide

Key takeaways

• With advertising, you pay money to a third-party platform to gain brand visibility, while marketing requires you to build up a following organically
• Using marketing and advertising campaigns together will bring the biggest return on your investment
• The right advertising platform for your business depends upon your target market

If you’re a small business looking to scale your brand, where should you spend your time: marketing or advertising?

The (somewhat frustrating) answer is: It depends. Many factors come into play, including your budget, target audience, how many years you’ve been in business, if you’re trying to break into a new market, or even the season or time of year. 

While a strong, small business advertising push might work for your right now, you could find that a well-crafted marketing campaign is a better fit six months from now.

Discover what small business advertising is, how to approach it, and why it’s different from small business marketing. You’ll also learn a few marketing tips to help bring in the biggest return on your investment.

What is marketing vs. advertising?

Before you determine if marketing and/or advertising is right for your business, you should have a clear definition of each.

What is marketing?

Marketing involves building relationships with potential customers so a sale can take place. If you want to grow any business, marketing should be a top priority. In fact, according to a QuickBooks Small Business Insights survey, “improving marketing results” was the second leading priority among small businesses (next only to increasing online sales).

Picture the sales journey like a funnel. At the top of a funnel, you have those who have barely (if ever) interacted with or heard of your brand. At the bottom, you have those who are ready and eager to buy. 

The purpose of marketing is to guide those at the top of the funnel toward the bottom. You can do that by explaining your competitive edge, showing proof of your past work, and/or promoting products and services the customer might be interested in.

What is advertising?

Advertising is a business practice where you pay money for brand visibility.

In other words, you invest a specified dollar amount for your business, product, and/or service to be displayed in front of potential, new customers. Different types of advertising include search ads, direct mail ads, print advertising, and social media ads.

How is marketing different from advertising?

While marketing and advertising are often used interchangeably, they are two distinct business practices. Understanding the differences between a marketing strategy and an advertising strategy will help you determine which is a better fit for your business (or how to use them together).

A few key differences between marketing and advertising include:

• Dollars spent: Advertising is typically more expensive than marketing because you pay a third-party platform to present your business to other customers. With marketing, your costs are typically all internal, such as employee wages, and marketing tools, such as your email automation platform.
• Customer acquisition: When acquiring a new customer through your marketing efforts, you are earning that new customer “organically.” In other words, with marketing, your customers come to you, whereas with advertising, you pay money for your brand to be presented to the customer.
• Time to sale: Typically, it will take longer to acquire a new customer through marketing as you will need to launch multiple touch points (e.g., emails, social media posts, and/or published blog posts) to find new customers. With advertising, your brand is introduced to potential customers the first day of your campaign.
• Platforms used: You will use different channels on marketing or advertising campaigns although there is some overlap. For example, you might use blog posts, email automation, and social media for your marketing campaign. Meanwhile, an advertising campaign might consist of search engine, local newspaper, billboard, or video ads.
• Internal resources required: While it varies from business to business, a marketing campaign will usually require more internal resources than an advertising campaign (unless you outsource to an agency). Marketing usually requires a graphic designer, copywriter, and marketing expert to piece together a campaign, but virtually any small business owner can launch an online advertising campaign on their own.

Advertising vs. marketing: Which method is the right fit for your business?

To be clear, you do not have to choose between marketing and advertising. The vast majority of businesses use both methods to build brand awareness, reach new audience members, and ultimately boost sales. 

That said, no small business owner has limitless time, funds, or internal resources. So you should instead decide where you want to dedicate the most effort.

Can’t decide whether leading with an advertising or marketing strategy will give you the biggest bang for your buck? While each business is different, here are a few questions to help you decide.

• Do you attract one-time or recurring customers? If you attract one-time customers, an advertising campaign might be a better fit because it introduces you to new audience members. If a big portion of your business is repeat buyers, marketing may be a better fit as it can help build a deeper relationship over time.
• Do you get a lot of business referrals? Word of mouth is one of the most valuable (and low-cost) tools for any small business owner. If you get a lot of referrals, it might be better to invest in a marketing campaign where you incentivize existing customers with a discount or coupon for referring their friends and family instead of paying a third-party platform with advertising dollars.
• Did you start a new business or did you recently launch a new storefront? If you recently launched or expanded your business, advertising might be a better fit as it can get customers in the door more quickly.
• Do you have an in-house marketing department? Launching a marketing campaign requires multiple moving parts. If you’re short-staffed or don’t have an in-house marketing team, advertising might be a better option.
• Do you have a budget dedicated to this campaign? If you have a tight budget, marketing may be a better fit (although it could be a larger drain on your time). If you have dollars to spend, you might find that an ad campaign is worth the investment.
• Do you have an existing audience? If you’re starting from square one—meaning no social media followers, no email list, and no visitors to your website—advertising might be a better solution. Advertising introduces you to those who may never have heard of your brand, which can help build an audience over time.

Small business advertising and marketing tools to help launch your campaign

Before you launch an advertising campaign, you should know which platforms to use.

Analyzing your target market will help you determine which platforms are right for your business. Where do your potential customers hang out online? How do they spend their free time? For example, if you target an older demographic, perhaps a print ad or coupon in the community newspaper might be worth the investment. If your target customers are Gen Z or millennials, consider advertising on social media platforms, such as TikTok or Facebook.

Below are a number of channels that could fit within your larger advertising strategy, along with marketing tools for each. For the largest return on your investment, couple each advertising campaign with a digital marketing push.

1. Social media advertising

If you’re a B2C (business-to-consumer) company, there’s a good chance your target audience spends a portion of their day scrolling through their phones.

In 2021, the vast majority (81%) of adults used YouTube, and 69% of adults used Facebook, according to Pew Research Center. Other popular platforms include Instagram (40% of users), Pinterest (31%), and LinkedIn (28%). 

If you target a younger demographic, advertising on TikTok or Snapchat might be better for you, with 67% and 59% of teens using the platforms in 2022, respectively.

Add in a social media marketing plan 

Whatever platform you choose to advertise with, make sure you maintain an active presence there.

Say you target a potential buyer with an Instagram ad, only for prospects to find you haven’t posted on your page in six months (or more). While launching an ad campaign on social media can help build a following, consistently posting engaging content for that following can boost conversions.

2. Paid search ads

When a consumer is looking for a new coffee shop, pet sitter, dry cleaners, or oil change service, chances are their hunt starts by typing a query into a search engine.

According to Statista, there were 83.9 billion visits to Google in April 2023 alone. With virtually every business in every industry trying to reach the top spot in search results, it’s a tough position to attain. However, by purchasing pay-per-click (PPC) ads on search engines like Bing or Google, you can attract customers searching for your exact product or service, as paid ads appear above organic search results.

Couple with a search engine optimization (SEO) strategy

Building up organic (unpaid) traffic can be a great way to support your paid advertising campaign. SEO is important for small businesses, so add an SEO-optimized paragraph to your website footer, include alt text with images, or write high-quality blog content to attract new readers and help improve your ranking in search engine results.

3. Advertise on Yelp

People are more likely to purchase a product or service based on a recommendation from a friend—which is why many local businesses choose to advertise on Yelp.

More than 80 million people visit Yelp each month looking for businesses, and many of them are also leaving reviews and photos for others to see. To help get more eyes on your Yelp Business Page, consider investing in Yelp Ads. 

After you claim your page, you can use Yelp Ads to target users by location and keyword. When a potential buyer comes searching for your product or service, they’ll find your business listed in key places on Yelp.com and the Yelp mobile app, such as above or below relevant search results in the “Sponsored Results” sections and on your competitors’ pages. And the more you’re found, the more leads you’re likely to get—businesses using Yelp Ads get 2.5x more leads.

Claim your business profile on Yelp

To build up your brand presence in your local community (whether you choose to advertise on Yelp or not), claim your business for free on Yelp. This gives you access to 20+ free tools that will help you create and manage your business page, complete with your hours, website, address, phone number, and other contact information. You can also add photos, respond to reviews, and more, which can help you attract new business.

Scale your business with small business advertising and marketing 

While marketing and advertising often get confused, they are two separate tools. Traditional advertising is when you pay for your company’s products or services to be shown to potential buyers. Marketing activities, on the other hand, don’t necessarily come with a fee attached.

To get the biggest return on your investment, implement a complementary digital advertising and marketing strategy. Pair paid search ads with a content marketing strategy, or support your digital advertising with an influencer partnership or social media marketing push. 

For more ideas on the types of marketing or advertising channels that might be right for your business, check out this guide to small business marketing.