By Chris Bunyan, managing director of digital and video advertising business, Localstars

Particularly in tough economic times, one of the best sources of revenue for small businesses is on their doorsteps - targeting local customers with their products and services. However these local audiences are bombarded with marketing messages from all sides, meaning that cutting through the noise to reach them can be difficult.

The good news is that technology can help, providing new channels that let you stand out from the crowd, without breaking the bank. In this article we look at five relatively new ways for small businesses to target customers digitally.

1.Locally focused online video ads

Driven by faster broadband, video has become an established advertising channel for big brands. Visually stimulating and engaging, video ads typically achieve click through rates on average three times higher than traditional banner ads. And video adverts have many other positive effects, such as increased brand awareness and greater brand recall that can’t be measured by simple click through metrics.

In the past professional video advertising was beyond the budgets of most small businesses, who would have been faced with the complexity of shooting, editing and finally placing video ads where their target audience will see them. Now however all-in-one services are available that make video advertising simple, straightforward and cost-effective. The majority of regional publishers now provide the ability to quickly create a video or rich media advert, based on library footage that has been personalised to your business and then deliver it to your target audience through their local websites. There aren’t any enormous production fees, with, in many cases, the costs of putting the ad together bundledinto the overall ad placement costs. This means that small businesses can benefit from video advertising from as little as £100 per insertion, bringing it within the reach of even the smallest of budgets.

2. Facebook going hyper-local

The dizzying rise of Facebook means that 48% of the UK population are now members of the social media site. Obviously many small businesses have a Facebook presence as it provides a way to connect with customers cost-effectively. Taking this a step further it was always possible to advertise on the site, using targeted banner ads based, the network is now introducing even more hyper-local targeting. Initially launched in the US, but expected to roll out internationally, businesses can now target ads by postcode to provide an incredibly granular level of detail. Combined with the other demographic factors that Facebook provides (age, sex, interests) this is perfect for small businesses looking to reach customers in particular towns, villages or even specific streets.

3. Groupon and locally focused discount sites

Another social media site that has seen major growth is Groupon. Essentially Groupon works through social buying. A time limited offer, such as a cheap deal at a pub or spa, is advertised and provided enough people sign up to it, they get the offer and the advertiser gets the business. One of the issues with Groupon, along with the cost to the advertiser, was that in markets outside large cities it simply wasn’t local enough. People want deals on their doorstep, not 50 miles away. However new features are now providing more granular targeting — and there are now a range of Groupon-like sites that have sprung up on a local level to deliver even more relevant offers.

4. Lord Sugar’s LinkLocal local screen advertising

Moving off the web, but staying with technology, businesses can invest in digital signage through Lord Sugar’s LinkLocal company. Essentially based on the UK’s fascination with queuing, LinkLocal is built around a network of digital TV screens in petrol stations, convenience stores, leisure centres and GP waiting rooms. These display adverts on a continuous loop in areas where people are likely to be watching. Businesses simply create a template-based advert, add text and choose where and when to display it. While local and inexpensive the service is obviously only going to work for businesses targeting certain demographic groups and doesn’t have the immediate feedback loop of clicking on an advert or an offer on the web.

5. Foursquare, the location based network

As we’ve seen, a key part of local advertising is based on knowing where a potential consumer actually is, so the rise in smartphones and location based services has been a godsend to businesses looking to deliver local offers.

Foursquare is one of the original location based social networks, where members ‘check in’ to particular locations to earn status points and even become ‘Mayor’. As part of its monetisation strategy Foursquare now allows businesses to ‘own’ their venue, deliver special offers and analyse those that visit using the network. So you can reward loyalty by offering a free drink or discount to those that visit you a certain number of times. While Foursquare works particularly well for bars and restaurants, it still has a limited following (10 million members globally), concentrated in big cities. If your business is targeting tech-savvy early adopters Foursquare may well be a good bet, but for the mass market other digital channels will probably work better, particularly if alternatives such as Facebook Places take off.

While this brief survey of some of the digital options available is not intended to be exhaustive, it does demonstrate the range of services available, all designed to fit the needs (and budgets) of small businesses by being focused, easy to use and cost-effective to implement. Like all marketing, which one is right for your business depends on a whole range of factors, from who your target customers are to what you are trying to sell to them. What is true about all of them is that they deliver the power of digital to businesses of all sizes, enabling you to reach local customers quickly and easily.