Advertising is essential to run a successful business. It has always been this way. People have to know about your services somehow, right? Simply telling another person that you have a business is as much "advertising" as a Superbowl commercial or the sign on the front of your building. I'm always amazed when a business owner tells me they don't do any sort of advertising - as though it's a dirty word. It's an absurd thing to say, and absolute nonsense.
Once upon a time (before the internet), restaurants had to advertise via brochures, yellow pages, billboards, TV and radio commercials, direct mail, and coupons in order to get the word out. Times are changing though. Marketing on the internet is becoming the most powerful form of advertising, and the old methods are on their way out.
You have to put your message in front of the eyes and ears. Your expensive Yellow Pages listing isn't going to do you any good if nobody opens the book. You might as well go whisper to a tree. Meanwhile, 78%  of Americans use the internet, and half  the population are frequent users. If you were wondering where all the eyeballs were, that's where, and if you aren't marketing your business there, you're making a huge mistake.
Below you'll find a list of ways you can market your business online. I've related them to something more familiar to make it easier to absorb. If you're new to all this, the list should help you get started.
1. Social Media - (Word of Mouth) - This has always been one of the most effective and favorable forms of marketing. Word of mouth is perhaps the oldest and cheapest form of marketing. Having your existing customers bring you new customers is brilliant. What's even more brilliant is that these days, people have their "word of mouth" conversations over the internet for everyone to see - and these conversations are often searchable!
It may sound too good to be true, but it really isn't. Social Media websites such as Facebook and Twitter provide forums for people to communicate with one another. As a business owner, you can easily set up Facebook and Twitter accounts for your business and use it to join the conversations people are having about you. You can use it to promote, generate buzz, interact with customers, collect market research and create loyalty in your brand.
The best part is that this costs you nothing but your time (unless you hire a PR company to handle your accounts). These services are free and some of the most valuable resources available. If you don't have a business Facebook or Twitter account, set them up now and do some research on "best practices" for businesses. There are plenty of articles out there to keep you from alienating your customers. As long as you don't treat it like a place to advertise, you'll be fine.
2. Directories - (Yellow Pages) - This is an important one. This is where you should focus most of your marketing efforts. Sites such as Yelp, CitySearch, GrubHub, UrbanSpoon, OpenTable, Google Places, and Foursquare are free and most will list your business without you doing anything. Many of these sites have a social element to them as well. Some are even designed for users to post reviews of businesses.
This is free publicity. Pages and pages all over the internet all about you. Nothing is free though, right? Well, technically someone pays for it - and these sites make their money one way or another - usually from the traffic they receive for providing all of the data they have collected.
Restaurateurs should take ownership of their business listings. Make use of the social aspect of these sites and interact with your existing and potential customers. If the sites offer services like GrubHub and Opentable do where they will actually send you new customers, you need to jump on it. This is advertising you only pay for if it works, and you'll only pay a few bucks per new diner. No form of traditional advertising is that inexpensive, and nothing else is guaranteed to work, profitable and sustainable as is this.
Sites like Yelp and Foursquare provide ways for restaurants to offer reasonable discounts to customers that are already nearby. I've heard of restaurant owners demanding they get removed from these free directory sites - some even threatening to get lawyers involved. It's ridiculous. It shows a complete lack of understanding of the potential and power of the internet, and these same owners will spend $1000 on a Yellow Pages ad that nobody will see. These sites get traffic into the millions - to remove yourself from them makes no sense at all.
3. Website - (Brochure) - Think of your website as a glossy full-color fold-out brochure explaining everything about your business that you hand out to customers. They are typically expensive to create and maintain. They are pretty much necessary to have, but also not typically very effective for bringing new customers in. Restaurants don't need expensive websites unless they are a national chain.
When you create a website, it's really just another thing you have to market and advertise. Search Engine Optimization (SEO) can be expensive. Do you want people to visit your website or do you want them to visit your restaurant and eat something?
Now, a website can be a very useful tool - you can maintain a blog and post specials or provide online ordering (which can be quite expensive). Some services - such as GrubHub - will build and maintain a website for you completely free with online ordering built-in.
Websites can be cheap or they can run into the several thousands. As long as you spend your money wisely and appropriately, you can't go wrong.
4. PPC and Online Advertising - (Billboards, Newspapers and Commercials) - PPC means Pay Per Click so you only have to pay when someone clicks your link. This is a common form of advertising on the internet. The most common places to place your ads are Google and Facebook, but you can place ads on YouTube, Yelp, and even mobile phone apps and games. You can put an ad just about anywhere eyeballs go.
Effectiveness is often low on this one unless your goal is to get traffic to your website. It can also be fairly expensive. People tend to ignore ads online anyway. There are even browser plug-ins that make ads not show up. It can work really well if you target it right though - particularly if you hire a PR company to manage your PPC advertising campaigns and they are strategically planned.
You may want to consider putting part of your advertising budget towards this sort of thing. It's a gamble and the odds are stacked against you, but everyone buys a scratcher once in awhile right? These days, marketers are using ads more for bringing back existing customers. Keep in mind, each different type of online marketing will reach a different type of customer.
5. Daily Deals - (Mailer Discounts and Coupons) - Sites like Groupon and LivingSocial are some of the latest and hottest marketing methods. They work by having you offer a deep discount on your product in order to gain many new customers all at once, and then splitting what little money was collected with the deals site. It works out to you discounting your product by 60-80%. It's like having a "going out of business sale." The problem with these sites is that the customers tend to follow the deals and they're not easy to convert into new customers at regular prices.
Daily Deals work well for some types of businesses - service-related businesses do best because they're only discounting their time. Restaurants are discounting their product which means they are out of pocket. Working with a daily deal site is like taking out a bad loan. For a restaurant, it can be a good way to go broke. I like a good bargain like anyone else, but I don't think these daily deal sites are helping the economy. There's bound to be a coupon bubble as soon as businesses all realize it doesn't work. It's not sustainable economically.
Sites like this are a dime a dozen and they are coming out of the woodwork. Even some of the biggest sites are trying their hand at it - Yelp, Google, and Facebook are all dabbling in daily deals. Small businesses get bombarded by salesmen from these companies constantly, and it can be frustrating. If you do decide to work with one, just be careful with what you give away. You can think of it as dollars you spend to per new customer gained. As such, if you bring them through the door - you had better be prepared to convert them into a repeat customer - and it's going to take more than just providing tasty food.