Performance Marketing
Types of Advertising: A Guide for Business Owners
Steve Burk Co-Founder 7 min read
There are 8 main types of advertising a business can buy today: search ads, Local Services Ads, social media ads, display and retargeting, video and streaming TV, out-of-home, radio and print, and sponsorships. Each reaches buyers at a different stage. For most small and local businesses, the best place to start is the type closest to the purchase.
Most owners do not lack options. They lack a fair way to compare them. Every rep says their channel works, and each reports results in its own terms: clicks, impressions, views or listeners. So the budget gets spread across whatever was pitched last, and nobody can say which dollar produced a customer. This is the exact gap we close through our full-funnel advertising.
Digital types of advertising: search, Local Services Ads, social and display
Most small budgets start with digital ads, because you can turn them on in a day, cap spending and see what each dollar did. The 4 main digital types reach people in very different moods.
Search ads
Search ads appear when someone types a need into Google or Bing, like "roof repair near me." The buyer already knows what they need, so search captures demand instead of creating it. You pay per click, and for local services a click commonly runs $5 to $50, depending on the trade. Of every type here, it has the most direct line from spend to leads.
Local Services Ads
Local Services Ads sit above the regular search ads for trades and some professional services, with a Google Guaranteed or Google Screened badge. Google verifies licenses and insurance before you can run. You pay per lead instead of per click, and the price is set by your category and market. Ranking leans on reviews, responsiveness and distance.
Social media ads
Social ads run on Facebook, Instagram, TikTok and LinkedIn. Nobody scrolling is looking for you, so the ad has to earn attention. That makes social better at creating demand: new products, offers, events and anything visual. Reach is typically cheaper than search, and intent is lower. LinkedIn can target by job title and company size, and its clicks typically cost more than Meta's.
Display and retargeting
Display ads are the banners that run across websites and apps. On their own they buy cheap reach and rarely drive leads. Their best use is retargeting, which shows ads to people who already visited your site. Expect cheap impressions, low click rates and a supporting role.
Video, streaming TV and traditional types of advertising
These types build awareness. They put your name in front of people before they need you, so when the need shows up, you are the name they remember. The tradeoff is measurement.
Video and streaming TV
YouTube ads run before and during videos and are typically bought per view or per thousand impressions. Streaming TV, also called CTV, plays on smart TVs through ad-supported apps. It targets by zip code and household and typically costs $25 to $50 per thousand impressions. Both need a real video, which is a cost of its own.
Out-of-home
This covers billboards, transit ads, digital screens and vehicle wraps, usually priced by location, traffic and run length, often in 4-week periods. It works best for a simple message repeated where buyers live or drive.
Radio and print
Local radio, streaming audio, newspapers, magazines and community publications all fall here. Radio is priced per spot by station and time of day, and it needs repetition before the name sticks. Print is priced per insertion and still reaches older and very local audiences well.
Sponsorships
Youth teams, charity events, local festivals, podcasts and newsletters all sell sponsorships. You pay a flat fee for visibility and goodwill. They build community trust and are the hardest type here to tie to revenue.
Across all 4 of these types, give each placement its own web address or offer code, and expect to undercount. Streaming TV is the exception worth knowing, because a tracking pixel and a holdout test can show real lift. We go deeper on this in our post on how CTV advertising works.
How to choose the right types of advertising for your business
A better filter than gut feel is 2 questions: where are your buyers when they decide, and how clearly can you measure what the channel did?
If buyers search when a need hits (a leaking pipe, a toothache, a legal problem), search and Local Services Ads come first. If buyers do not know they want you yet (a new product, a class, an event), social and video do more of the work. If you sell to other businesses, LinkedIn and search on specific service terms usually beat broad social.
Then rank your options by how measurable they are:
- Most measurable: search, Local Services Ads and social, which report cost per lead and conversions by campaign.
- Measurable with work: retargeting, YouTube and streaming TV, where you track visits and lift more than clicks.
- Hard to measure: billboards, radio, print and sponsorships, which rely on offer codes, unique web addresses and asking new customers how they found you.
Take a healthcare practice. Patients looking for a dentist or physical therapist nearby are ready to book, so search ads and the Google Map Pack carry most of the load. Social earns a role for elective work like cosmetic dentistry. Tighter platform rules on health targeting and retargeting push even more budget toward search. The same problem looks different by vertical, as our page on marketing for healthcare practices shows.
Not sure which channels are pulling their weight? The free Growth Score shows the gaps. Take the free Growth Score →
How to split a small advertising budget across channels
Say you have $3,000 a month for ad spend. The instinct is to try a little of everything. That usually fails. Each channel needs enough spend to produce real data, and 6 channels at $500 each teach you little about any of them.
A starting split for a local service business looks like this:
- 60 to 70 percent goes to search ads and Local Services Ads, where buyers are already looking.
- 20 to 30 percent goes to social ads, including retargeting people who visited your site.
- About 10 percent funds a single test, like YouTube in your service area or a new keyword group.
Here is the math on the search share. At a $25 click, $2,000 buys about 80 clicks a month. If 1 in 10 clicks becomes a lead, that is 8 leads, and within 60 to 90 days you can judge the channel on real numbers. For context, most service businesses spend 5 to 10 percent of revenue on marketing.
What the right type of advertising looks like in practice
Each result below came from matching the ad type to the buyer, then building the campaign to convert:
- Search: a NJ roofer's Google Ads rebuild took cost per lead from $912 to $197 and conversions from 21 to 196 in 90 days, at a 15.62% click-through rate.
- Local Services Ads: a NJ HVAC company grew from 4 to 11 service categories and raised its absolute-top impression share from 12.56% to 30.37%, so it showed first far more often.
- Social: CapYear Academy turned $3,729 of Meta ad spend into $66,176 in enrollment revenue, a 1,774% return on ad spend.
None was the cheapest channel on paper. Each was closest to how that buyer decides, with tracking to prove what it produced. For a real example, read the CapYear Academy results.
Which types of advertising to start with
The short version: start where buyers are already looking, measure every channel in cost per lead and booked revenue, and add awareness types only when the measurable ones stop growing. For most local businesses, that means search and Local Services Ads first, social second and everything else after.
The last choice is who runs it. An in-house hire, a local shop or an agency 2 states away can all work if they report every channel in the same terms: what it cost and what it produced. Knowing your market matters more than sharing your zip code. For a real-world take, read our post on whether your agency needs a local zip code.
Need a campaign that reaches the right buyers across channels? Plan your next campaign with our NJ advertising team.
Frequently Asked Questions
What is the most effective type of advertising for a small business?
For most local service businesses, search ads and Local Services Ads are the most effective starting point, because they reach people who are already looking and report cost per lead directly. Social ads often work better for products, events and offers people do not search for yet. The best type is the one closest to how your buyers decide, judged by booked revenue rather than clicks.
How much should a small business spend on advertising?
Most service businesses spend 5 to 10 percent of revenue on marketing, and ad spend is part of that total. Each channel needs enough budget to produce usable data within 60 to 90 days, which is why small budgets work best on 2 or 3 channels instead of 6. If an agency manages the ads, its fee is usually separate from the ad spend itself.
What is the difference between digital and traditional advertising?
Digital advertising runs online, on search engines, social platforms, websites and streaming apps. It can be targeted by location, interest or behavior and measured down to the click or lead. Traditional advertising includes billboards, radio, print and sponsorships. It reaches broad local audiences and builds familiarity, but tracking it depends on offer codes, unique web addresses and asking customers how they found you.
