Digital Advertising for Small Businesses: A 6-Step Plan for Building E-commerce Success

During the COVID-19 pandemic consumers moved online in droves, spurring a major surge in digital sales. The trend has continued, with the number of online buyers still soaring: A recent report from Boston Consulting Group predicts that e-commerce will account for 41% of global retail sales by 2027, up from just 18% in 2017.

Competition in the e-commerce space is also increasing—in fact, it’s growing faster than the market itself, which means growth is essential for businesses to just maintain market share. Standing out among crowds of digital sellers and consistently turning browsing habits into revenue opportunities demands a robust e-commerce advertising strategy. Many business owners, however, leap into the fray without a clear plan or understanding of the digital ecosystem.

As a seasoned e-commerce strategist with experience guiding businesses of all sizes toward growth, I know that certain fundamental principles of e-commerce marketing always apply, regardless of budget or industry. But there are also a number of insights that are particularly important to consider when building out an advertising strategy for a small business.

This step-by-step guide outlines the critical steps for optimizing your digital advertising. From deeply understanding your target customers and enhancing your website, to developing a plan and creating platform-specific content, each step is designed to help you navigate the complexities of online selling and maximize the success of your campaigns.

1. Get to Know Your Customers

You might think you know who wants to buy your products, but there’s always more to learn. The more you understand your audience, the more likely your marketing efforts will have an impact. To dive into your demographic and gauge where your ads will perform best, start by organizing your product into clear segments. If you have multiple products, prioritize them based on popularity or strategic importance. This focus enables you to allocate your resources more effectively, ensuring that you’re not spreading your efforts too thinly.

Next, create a buyer persona for each segment. This is an opportunity to engage with the habits and behaviors of your customers. Give these personas names, demographics, interests, and narratives. This creative process helps you visualize your target and secondary markets as real people with specific needs and preferences, making your marketing efforts more relatable.

Research where your target market spends time online. Identifying the online spaces your preferred customers inhabit is critical for effective e-commerce targeting. Start by conducting market research and hypothesizing about your audience, and then move quickly to validate your assumptions through testing, surveys, interviews, or prototype ads. Some of the online spaces you might find your audience include:

• Social media platforms: The average Internet user spends more than two hours a day on social media—the challenging part is finding out which platform your audience is on and if it’s worth advertising on that platform. Instagram, Facebook, TikTok, and Pinterest are frequently prime advertising venues for e-commerce businesses.

• Blogs and content platforms: Audiences often visit blogs or other niche online publications, such as fashion blogs or tech review sites, that cater to a specific interest or need. Blog readership is high: A 2023 HubSpot survey found that 18% of respondents read blogs daily, and 29% read blogs one to four times per month.

• Video-sharing platforms: With more than 2.7 billion monthly active users, YouTube is a major destination for many people seeking entertainment, education, and product reviews. Other prominent video-streaming platforms, such as Twitch, are also popular spaces to investigate.

• Podcasts and audio platforms: With the huge growth in podcasting, platforms like Spotify, Apple Podcasts, and SoundCloud are increasingly becoming spaces where audiences spend their leisure or learning time. A study by Nielsen found that podcast ads drove an aided brand recall rate (the likelihood of someone remembering your brand when prompted) of 71%.

Understanding your customers and where they spend their time online will allow you to focus your resources and tailor your marketing efforts, resulting in greater impact and engagement.

2. Optimize Your Website’s E-commerce Path

You can have the best-performing advertising campaign of all time, but if your website isn’t ready for the spotlight, then neither are your ads. The better your site looks and feels, the more your audience will trust your brand. I often guide clients who are true beginners in the modern e-commerce space through the selection of not just which commerce tools to use, but also how to build an optimized shopping site from the ground up. This process starts with choosing a platform and ends with streamlining the checkout process.

Choose a Suitable Hosting Platform

There are several robust solutions available for building an e-commerce website, and the one you choose will depend on the stage and size of your business. Here are my top three recommendations for e-commerce platforms:

• Best for the beginner: Squarespace offers a blend of aesthetic appeal and functionality. It provides elegant design templates and straightforward tools for creating and customizing an online store.

• Best for the short or medium term: Shopify is designed with the nontechnical user in mind. It offers an intuitive platform with built-in SEO, marketing tools, reliable hosting, and security.

• Best for the long term: According to a 2024 report by the small but well-respected technology research company W3Tech, more than 40% of the world’s websites use WordPress, a highly flexible and open-source platform. If you need a website quickly, however, this might not be the best option for you, as it is more technical to set up and maintain. If you’re just starting out, consider switching to WordPress when you have larger infrastructure in place.

Lay the Content Foundations

The importance of basic website content can be easily overlooked, but think of your website like a physical store; you wouldn’t open it without the appropriate signage, professional facade, and staff in place. Ensure that your website communicates your brand’s value proposition clearly and compellingly.

Core pages, such as Home and About, should clearly present your brand’s offering, story, and what distinguishes you from the competition. Include a list of FAQs and detailed shipping and returns information to address common customer queries and concerns. Make sure support options like live chat, email, or phone agents are readily available to assist customers. Aim for a user-friendly design with intuitive navigation, ensuring visitors can easily find what they need. Prioritize fast loading times and don’t forget to optimize for mobile use as well as desktop.

Develop a Robust Landing Page

A good landing page for digital ads is the cornerstone of any e-commerce business. It is where your advertising efforts bear fruit—where your website visitors convert into customers. The ideal landing page construct is different for each brand: For instance, an apparel store could see success from an advertising campaign directing customers to a page that showcases a variety of product options. On the other hand, if your site is advertising a single high-value item, a landing page that features extensive content explaining the product’s utility could be more effective in convincing potential buyers of its value. In other words, the landing page you create is dependent on your unique product and business needs. That said, there are best practices any landing page should follow, including:

• A clear and compelling headline or page title. The headline should instantly convey the main benefit of the offer, capturing the visitor’s attention and encouraging them to read on.

• Engaging copy. Use persuasive subheadings and body text that explains how the product will meet their needs, highlighting the key features.

• Minimal distractions. Design the page with a clear focus on the conversion goal, removing any unnecessary navigation tools, links, or information.

• High-quality photos and videos. Offer multiple views and zoom features for each product to help customers visualize owning and using the product. (An expert digital marketer or developer can help you balance high-resolution photography with fast load times if you’re not sure how or the web platform you’ve chosen automatically adjusts for that.)

• Effective calls to action (CTAs). CTAs should be prominently placed and encourage visitors to take the next step, whether it’s making a purchase, signing up for a newsletter or discount, or contacting your business.

• Customer testimonials or reviews. Showcase customer reviews and testimonials to build trust and credibility.

If writing isn’t your strength, tools like Grammarly or ChatGPT can help you get started on writing simple, clear copy. You can also use tools such as Canva for professional-looking graphics.

Streamline Your Checkout Process

The checkout experience is a critical component of your sales funnel and will directly impact your advertising campaign conversion rates. The easier and quicker your checkout process, the higher your return on advertising. Conversely, a convoluted checkout process will limit any marketing efforts. To minimize checkout friction on your website:

• Offer a single-page checkout, with a guest checkout option to reduce steps.
• Limit required fields, allow autofill for returning customers, and validate inputs in real time.
• Enable multiple payment methods and save payment information for future use.
• Ensure the checkout is responsive on mobile devices.
• Offer a final order review before purchase completion.

Popular online payment solutions include Stripe, Square, Helcim, Shopify, and WooCommerce. Whether you’re choosing one of these or have a payment structure in place already, make sure it has these features:

• A merchant account to process electronic payments
• An SSL certificate to encrypt data and secure transactions
• PCI DSS compliance to adhere to security standards and protect cardholder data
• A user-friendly interface to reduce cart abandonment
• Fraud prevention tools to detect fraudulent transactions
• Purchase tracking to monitor your advertising campaigns

Don’t underestimate the importance of an efficient checkout process—it’s worth investing the time and effort to ensure there are no barriers to conversion.

3. Pick the Right Advertising Channels

Once you have identified the online spaces where your audience spends time and made sure that your website is ready to welcome customers, it’s time to align digital ad channels with your primary product segment. For example, advertising handmade art items yields great results on Etsy, whereas health and wellness offerings often gain good traction through Instagram or Google Search ads. For tech products, YouTube (and occasionally Reddit) serve as effective channels. Fashion and apparel find a responsive audience on Instagram, TikTok, and Pinterest, while LinkedIn stands out for B2B products.

Compile a list of the best spaces to advertise, rank these advertising channels by their expected return on investment, and initiate your campaign with a targeted strategy before broadening your reach. By starting narrowly, you can test the effectiveness of your messaging, offers, and overall strategy; gather valuable data; and make necessary adjustments.

If the platform you select achieves poor results, don’t give up. Online advertising is all about persisting until you find the winning formula. If you have a limited budget, just make sure that you start slowly to allow for the testing of different methods before you go all in on one advertising channel.

4. Create Platform-specific Ad Material

Whether it’s eye-catching images for Instagram or informative videos for YouTube, the content should address your audience’s pain points and highlight the value of your offering, while using collateral that is organic to the platform:

Carefully selecting the channel or channels that align best with both product and audience and creating ad content suited to the nature of the platform will maximize the success of your campaigns.

5. Test Your Digital Ad Strategies

Evolving your process is essential to any advertising strategy. Sometimes you can deliver a powerful campaign right out of the gate, but it’s unusual. Most success comes from iteration and testing new approaches. To get started, create an initial advertising budget—perhaps 5% or 10% of sales is a good estimate—and start slowly to learn and test for maximum results.

It’s important to test different audiences, ad copy, and product shots to know which one earns you the most product sales. One way to do this is through A/B (or split) testing—trialing two versions of your ad with one major difference between the two in order to find the winning variable.

Experimenting with different target audiences can also yield great results. For example, I had a client who sold a unique Halloween-themed product. The ads were performing well, achieving an impressive three times return on ad spend (ROAS) from our Meta campaigns targeting an audience of general Halloween fans. However, after an insightful conversation with the client, I ran a test that targeted Alfred Hitchcock movie fans rather than Halloween fans in general. The results were remarkable. Our ROAS tripled—the client went from making $15,000 per month to $45,000 per month, practically overnight, just from Meta ads and with an advertising budget of only $5,000 per month.

This experience revealed that the ideal customer base was actually an older demographic than initially anticipated and demonstrated that sometimes a niche audience can be more fruitful than a broader one. Testing, even after you find profitability, is always worth the cost. It is typically better to test audiences from broad to more specific segments, allowing you to identify your foundational audience first before narrowing your focus.

6. Understand Your Campaign Metrics

Implement robust tracking mechanisms on your website to monitor the performance of your advertising campaigns. Tools like Google Analytics can help you understand visitor behavior and conversions, enabling you to make data-driven decisions about how your website is set up. Typical advertising platforms offer performance analytics to monitor metrics such as ad impressions and engagement. The main KPIs you should focus on are:

• Return on ad spend (ROAS): This is the ultimate measure of your advertising success. A high ROAS indicates your campaigns are generating more revenue than the cost to run them.
• Cost per acquisition (CPA): This tracks how much you spend to acquire a customer on average. Lower CPAs are generally indicative of a more efficient advertising strategy.
• Customer lifetime value (CLV): This predicts the net profit attributed to the entire future relationship with a customer. Understanding CLV in relation to CPA can help you determine the long-term value of your advertising efforts.
• Traffic and engagement metrics: These include click-through rate (CTR) and cost per click (CPC).
• Conversion rate: High conversion rates indicate your ads are reaching and resonating with your target audience, leading to purchases.

Tracking sales conversions is arguably the most valuable thing you can do, as this metric will allow you to see which ads, in which places, are driving the most sales. This is a high-level summary of what you need to set up conversion tracking:

For any platform, ensure tracking codes or Pixels are correctly installed with platform-specific tools (e.g., Meta Pixel Helper browser extension). Then conduct tests on your site to confirm accurate tracking. Once you have monitoring and dashboards set up, perform regular evaluations and use the results to drive improvements to your advertising campaigns.

E-commerce Is a Marathon, Not a Sprint

I advise my clients to remember that they’re not just preparing for immediate gains from advertising their small businesses, they are laying the groundwork for lasting prosperity in the digital marketplace. Long-term success will hinge on business owners’ willingness to continually adapt and refine their strategies, drawing on concrete data to guide future decisions. Interested companies should start by reviewing their current strategy against this guide, making adjustments where necessary, then testing, tweaking, and continually refining. The e-commerce marketing journey is a marathon, not a sprint.

With a clear understanding of your audience, a fully functional website, and compelling content, you can create impactful digital advertising campaigns that not only capture attention, but turn visitors into customers. With dedication, a good product, and the right e-commerce advertising strategy, your growth potential is limitless.