Before we jump in with all the exciting new tools available, let’s take a step back and think about what you want to achieve. Too many people think: Everyone’s blogging (or podcasting, tweeting, or on Facebook) – I should be blogging – let’s start a blog! This is the wrong starting point. Just because it’s quick, easy and free to set up an account with WordPress, Facebook, Twitter, MySpace or YouTube doesn’t mean you should. Like any form of marketing, your starting point should be your marketing aims and objectives, then identifying your community and where they hang out, then you choose appropriate tools to reach them. This article will give you a crash course in online marketing strategy, and help you understand some key principles of social media that will enable you to use any tool appropriately and effectively.

What is online marketing? There are almost two billion people online. Some of them are your ideal clients or customers. If you can reach even a tiny fraction of them, you will have a viable business. The internet has brought enormous benefits to the way we market our businesses. A website is like a virtual shopfront that is always open. Email reaches targeted audiences with news of our latest products. A blog provides regularly updated information for customers and prospects, which they can comment on. People can listen to us wherever they are on an MP3 player. They can watch video demonstrations of our products online, now that massive take-up of broadband enables us to watch large streaming video files. Social networks enable us to make direct connections with people who are interested in our wares. We can reach niche audiences more easily than ever before – and the power of the Internet makes these niches global. However specialised our niche, there is a market for it online, which not only can we reach but, by increasing our visibility online, will also come looking for us.

Online marketing does a lot of the same things that traditional marketing does – it just does them more cheaply and effectively with a greater reach.

You may be familiar with the traditional marketing concept of the sales funnel. It describes the stages through which you push potential customers from being a mass market of people who are unaware of your existence to a highly loyal customer who comes back for more. It also describes which marketing methods to use at which stage.

Online marketing methods loosely map on to traditional methods, but at every stage you are making yourself visible to people who will seek you out, and engaging a highly targeted audience, rather than broadcasting an indiscriminate message and hoping for the best. Word of mouth is the Holy Grail of marketing – and very difficult to achieve offline. But is turbo-charged with online marketing.

Online marketing is: Affordable. Because it is cheaper than traditional marketing, you can use it to punch above your weight. Effective. People spend more time online- use online marketing to reach your market where they are. Authentic. Tools such as social networks, blogging and podcasting are personal media. You can use them credibly as a small business owner, in a way that is hard for large corporates to do.

Given the amount of time people spend on the Internet, particularly on social sites such as Facebook and Twitter, it makes sense to join in. The average consumer tends to be ahead of most businesses in their use of social media. If your market is spending time on these sites, so should you – go where your market is. Specific reasons why online marketing works for business include:

1. Drive traffic to your site. This is probably the single biggest reason for using online marketing. Your website is the hub of your business, and the aim of your online marketing activities is to drive traffic to it.

2. New ways to connect with your market. By establishing a presence on social sites that your market use, rather than taking an if you build it they will come approach to your business website, you’ll become visible to a new set of prospects.

3. Build trust. People always prefer to do business with people they know. Your clients and customers can get to know you through your online presence.

4. Start a conversation. Online marketing is a conversation – not a lecture. A two-way dialogue with your customers and prospects is much more effective than a one-way broadcast of your marketing message.

5. Create value. Part of the secret of online marketing is creating useful content and giving it away. If you can create a useful resource or interesting content targeted at your niche, they will keep coming back for more.

6. Building communities and relationships. Think of your market as a community of interest, built around a particular topic related to your business. You may also be able to create a community around your business or product- if it is interesting enough!

7. Provide quick, up-to-date information about your business or topic of interest. The breaking news aspect of many forms of online marketing makes it ideal for announcements about new products or services, special offers, or simply valuable topical information about your sector or area of expertise.

8. Data capture. Building a database of potential customers is a core aim of your email marketing campaign. But much of your online marketing effort will also be geared towards list building – not just your lists of Facebook fans and Twitter followers, but the calls to action you will use to encourage people to sign up to your email newsletter.

9. Market research. One of the benefits of using the new online marketing tools is that you are much closer to your market and aware of what they want. But you can go a stage further and ask them for their feedback on your products or services, or even an online questionnaire and market it through your online marketing channels.

10. Low-cost, low risk, effective. Most of the tools are available either free or very cheap. The investment is often in time rather than money. The risks of using social media and communicating openly with your market are low.For anyone still concerned about maintaining control, it is important to remember that we have already lost control – and probably never really had it in the first place. People are already talking about us. It is important for you to be aware of where those conversations are taking place, to join them, and to influence them where appropriate.