06/04/2010 02:03 pm ET Updated Aug 09, 2011

Internet Marketing: 5 Things You Need To Know

Many entrepreneurs don't maximize the marketing power and reach of the Internet -- whether it's social networking, tools to identify and track customers, or even their own websites. Either they don't really understand how to use the Web for advertising and marketing, or they are reluctant to add new dimensions to their existing marketing plans. But the reality is that Internet marketing just as much, if not more, valuable -- not to mention, more cost effective -- than a traditional marketing campaign.

For business owners that have tried to embrace Internet marketing, they often misuse or overuse it, particularly social media. As with any other marketing strategy, using the Internet to market products or services cannot be aggressive or overt. It's most effective when used in conjunction with traditional marketing techniques as another way to develop real relationships with future and existing clients and connect with them in targeted, personal ways. As an entrepreneur, you need a solid plan for navigating the path to successfully marketing, networking, and advertising of your business online to fully take advantage of growth opportunities.

So what's the best way to approach Internet marketing? Here are five things you need to know.

1. Diversify your Internet marketing portfolio by thinking beyond your website.
Any marketing strategy needs to be based on the types of connections you are trying to make, rather than focused to a specific medium. The best way to make as many connections as possible and get a higher rate of client acquisition is to diversify your Internet marketing portfolio. Many entrepreneurs make the mistake of sticking with one or two marketing strategies and excluding others -- they put all their eggs in one basket. As a small-business owner, if you want to get more clients, you have to get prospective clients streaming in from many different sources. This means you have to pay attention to and try new Internet marketing strategies as they surface.

Peter VanRysdam, chief marketing officer of Web development firm 352 Media Group, suggests adding two online marketing tools to the mix: blogging and webinars. "So many people look at blogging just from a community-building perspective, but that's only half of what a good blog can do," he says. "With well-written titles and good links, a blog can be the best tool for improving search engine rankings." He advises that any business blog needs to live under a company's domain name instead of in Wordpress, Typepad, or any other outside blogging website. "Just remember that writing a blog post is not like writing a dissertation. A great blog post can be a couple sentences and an embedded video." He also suggests diversifying with webinars. "If you write someone an e-mail asking them to buy something from you, chances are they delete it. However, if you invite them to a free webinar where they will learn something that can help, there is a better chance you will get a response, especially in business-to-business marketing scenarios. The webinar itself should avoid a blatant sales pitch. The goal of a webinar is to establish you and your business as experts."

2. Build a brand by building buzz.
According to Jenn Mathews, SEO expert and president of Wappow, Inc., a company that holds conferences, you need to use social-media marketing to build a strong brand presence. To do this, you have to create a buzz about the products and services you provide, no matter what they are. "Once you have a solid base of friends and followers, start marketing to them, seeding your page with personality," she says. "Keep the fan page for the company or product for marketing and promotions, and talk to friends on Facebook on a personal level. Get them excited about the brand of the company. If they see positive feedback on Facebook or Twitter, send them promotional swag as a thank you -- gift cards through email, promotional discount codes, pens, etc." Use these customers to help create more friends and friends of friends. Internet marketing is about networking. You need to get to know people, be friendly, thank them for buying your product, and help them when they have a problem.

3. But don't forget your website, either.
Mathews also notes that entrepreneurs must back up their brand and social networking with very strong website design and functionality. As an online marketer, you need to make sure your site is SEO friendly and ranks high for terms attached to your brand, as well as general search terms people would be using to find companies like yours. Then, your website needs to "clearly state the value proposition with a specific call to action on the website or landing page" to make sure prospective clients are compelled to contact you, Mathews says. What will prospective customers find compelling and which keywords will they search? "The number-one factor in Internet marketing is knowing who your audience is," Mathews says. She suggests that entrepreneurs invest money in a professional market-research company to clearly segment out the target audience. No matter what, to be a savvy online marketer, you need to do significant research and talk to your target audience to find out exactly what motivates them, what their needs are, and how you can fulfill those needs.

4. Go local -- and global.
John Nicholson of Marketade, a small-business Internet marketing firm, notes that adding your business to Google Places is an incredibly important part of any marketing plan. "Google's local business listings -- the search results that appear next to a map with addresses and phone numbers -- are much more prominent than they used to be," he says. "If your business serves local customers, register it on Google Places and you can appear in these listings, even if you don't have a website. Add as much information as possible when completing your profile, such as hours, photos, and most importantly, your business categories."

5. Track what works.
Nicholson also recommends that all entrepreneurs add Google Analytics tracking to their websites. "Without Web tracking in place, you won't know what's working and what's not with your marketing and website," he says. "Sign up for a free Google Analytics account, and you'll receive a small piece of code to add to the bottom of your site's pages. You'll soon see how many hits you're getting, where they come from, and where they go on your site. Above all else, by seeing your site's progress, you're much more likely to be motivated to keep improving your online presence."

The original version of this article appeared on AOL Small Business on 6/4/10.