Effective online marketing is essential for any small business looking to grow in the digital age. However, the world of online marketing comes loaded with insider terms and acronyms that can seem overwhelming at first glance.
This comprehensive guide breaks down 25 must-know online marketing terms for small business owners and entrepreneurs. With clear explanations and real-world context around each concept, you‘ll gain the knowledge needed to make informed decisions about online marketing campaigns and leverage these methods to fuel your business growth.
Let‘s dive in!
The Online Marketing Methods You Need to Know
While dozens of online marketing approaches exist today, five core methods form the foundation for most small business marketing campaigns. Master these areas first before exploring more advanced tactics:
Search Engine Optimization (SEO)
SEO helps you improve your visibility in search engine results pages (SERP) for relevant keyword searches. For example, optimizing your website and content so you rank highly when local customers search for "Honolulu bakery" in Google. The higher the search ranking, the more traffic and leads.
73% of search engine users never scroll past the first page of Google, so page one SEO results deliver exponentially more visits than later pages [1].
Why It Matters:
- Increased website traffic from free, targeted visitors.
- Drives qualified leads and new customers.
- Builds authority and trust in your brand.
Tips to Succeed:
- Research keyword demand and competition.
- Create search-friendly page content.
- Build quality backlinks to your site.
Pay-Per-Click (PPC)
PPC campaigns target interested searchers by displaying your ads in paid ad spaces alongside Google, Bing and social media search engine results. For example, showing an ad for your bakery to locals searching "pastries near me." You pay a small fee each time someone clicks your ad.
The average conversion rate for search PPC hovers between 2-4%, significantly higher than most other online ad formats [2].
Why It Matters:
- Laser-focused targeting options.
- Complete control over budget & spending.
- Trackable results and fast optimization.
Tips to Succeed
- Set your max Cost-Per-Click bid appropriately.
- Test ad variations to raise click-through rates.
- Use negative keywords to reduce irrelevant clicks.
Social Media Marketing
Promoting your brand, products and special offers on social platforms like Facebook, Instagram and Twitter allows you to engage current customers and reach new ones. Build an audience base on one or more networks and consistently post engaging, relevant content to drive website traffic, raise awareness and stimulate sales.
There are over 4 billion active social media users worldwide, representing a massive opportunity for brands [3].
Why It Matters
- Connect on a more personal level with your target audience.
- Build meaningful relationships and community.
- Attract website visitors through content shares.
Tips to Succeed
- Understand each platform‘s unique audience and strengths.
- Post at optimal times when your audience is most active.
- Use high-quality photos, videos and infographics in your content.
Email Marketing
Broadcast promotional emails send deals, offers and valuable content directly to subscriber inboxes. For example, sending monthly newsletter emails touting new cupcake flavors or limited-time sales. Personalized emails drive higher open and click-through rates for Conversion Rate Optimization (CRO) versus generic mail blasts.
Email achieves a Median ROI of 122% according to DMA research, HIGHER than any other marketing channel [4].
Why It Matters
- Build an owned, direct line to customers.
- Keep your brand top of mind.
- Offer subscribers special perks and incentives.
Tips to Succeed
- Offer an irresistible lead magnet such as a coupon or eBook to capture new subscribers.
- Segment your list based on preferences and purchase history for targeted campaigns.
- Test email subject lines to determine which resonate best with your audience.
Content Marketing
Content marketing focuses on consistently creating, curating and distributing valuable, relevant content to attract and engage a clearly-defined audience. Rather than direct promotional messages, the goal is to provide useful information tailored to their needs.
Strategic content marketing costs 62% less to acquire a lead than traditional outbound marketing methods [5].
Why it Matters
- Establishes your brand as an authority.
- Earns the awareness, trust and loyalty of prospects.
- Expands reach by appealing to search and social channels.
Tips to Succeed
- Study your persona buyer‘s journey to identify content needs.
- Commit to a regular publishing schedule on your company blog or media properties.
- Promote new content across all marketing channels for maximum visibility.
Now that you grasp these essential online marketing disciplines, let‘s explore key terminology that applies across all digital marketing activities.
Must-Know Marketing Methodology Terms
Understand these universal concepts below to speak fluently about implementing any online marketing program:
A/B Testing
A/B testing, or split testing, compares two versions of an online element to determine which one performs better. For example, testing a green Call-to-Action button against a red version to see which color drives more clicks and conversions. The winning variation remains while the underperforming option gets eliminated.
SaaS provider Optimizely found that A/B testing can raise conversion rates by as much as 400% [6].
Analytics
Digital analytics examine performance data around website traffic, lead conversions, sales activity and more to derive actionable insights. For example, reviewing monthly Google Analytics reports to compare traffic metrics year-over-year, pinpoint landing pages with high bounce rates in need of optimization and identify your top referral sources across channels.
A mere 10% increase in data accessibility leads to over $65 million added value for typical Fortune 1000 companies [7].
Call to Action (CTA)
A call-to-action is an instruction or prompt on a webpage, ad or other marketing material to provoke an immediate user response. For example, "Click Here To Download" triggering a brochure form fill or "Shop New Arrivals" button to browse latest products. High contrast color buttons with brief, benefit-focused copy make effective CTAs.
Just a 5% increase in CTA conversion rate can raise revenue by 25% or more [8].
Conversion Funnel
Also called a sales funnel or buyer journey, conversion funnels map out the sequential stages site visitors move through on their path from awareness to becoming a lead, then loyal customer. From initial click-through to checkout and beyond, digital marketers optimize every phase – acquisition, activation, retention, referral – to reduce fallout and maximize conversions.
Companies that excel at converting cold website traffic through sales funnel optimization grow revenues up to 275% faster than other businesses [9].
Conversion Rate
Conversion rate is the percentage of visitors who complete a desired action out of your total site traffic during a given period. Improving conversion benchmark metrics like email signup rate, free trial sign-up rate or product purchase rate indicate an effective customer experience and digital marketing program funnel.
Based on research from IgnitionOne, prospects with the highest conversion rates convert 6x more than lower funnel traffic [10].
Go-to Tracking and Reporting Metrics
To accurately evaluate campaign reach and results, familiarize yourself with these digital marketing key performance indicators (KPIs):
Bounce Rate
Bounce rate measures single page sessions – visitors who enter and exit your site without clicking through to additional pages. High bounce rates generally signal poor page experience. For example, irrelevant content, lengthy copy, design issues or slow load speeds quickly prompt visitors to leave.
The average website bounce rate is just over 50 percent [11]. Strive for 40 percent or less.
Click-Through Rate (CTR)
Click-through rate shows how many ad or email recipients engage with your message and click for more information. To calculate: Total clicks / Delivered impressions or sends. For example, if 100 people view your Facebook ad and 10 people click through to your site, the CTR is 10%.
For display network ads, the average CTR equals 0.35% across formats and placements [12]. Benchmark your own display ads against this, testing different elements that may lift CTR.
Cost Per Acquisition (CPA)
Cost per acquisition determines average spend to acquire a conversion – often a lead opt-in or customer purchase. Calculate CPA by: Total ad spend / Total conversions. For example, $1,000 total spend to generate 50 sales equals CPA of $20. Use CPA to gauge campaign or channel profitability ROI and adjust budgets accordingly if CPA caps are exceeded.
Average CPA varies widely by industry – SaaS software ranges from $185 to over $400+ [13] – track metrics against your own business model for optimum payback.
Customer Lifetime Value (CLV)
Calculate a customer‘s revenue value over their entire relationship with your brand – from inception to dormancy. This forecasts the return you gain on marketing investments to acquire new customers. For example, a buyer who spends $500 per year over 5 years equals $2,500 CLV. Subtract CPA; if it cost you $100 to obtain this customer through online advertising, the $2,400 net return justifies this upfront ad spend.
Research shows acquiring customers with higher projected lifetime values makes businesses more profitable and successful [14].
Return on Investment (ROI)
ROI compares hard marketing investment costs against tangible revenues and sales generated. Calculate using this formula:
(Gain From Investment – Cost of Investment) / Cost of Investment
Aim for positive ROI where gains continually outweigh spends. For example, spending $5,000 to implement a new digital ad strategy that yields $25,000 in first year revenues equates to 400% ROI.
Top-performing companies achieve +25% higher ROIs from their marketing efforts than lower performing businesses [15].
Review these reports frequently, set goals against key benchmarks and track lifts or declines from optimization efforts. Now let‘s explore must-know metrics and terminology specifically for optimizing paid search, social media and email channels.
