Marketing is an important function of any business enterprise. Marketing increases the reach of the company’s product and contributes directly to the top line revenues of the company. With the advent and penetration of the internet, online marketing has emerged as an important tool. Today, no organisation can afford to ignore an online presence for itself and its product.Online marketing is a very efficient method of marketing. At minimal cost, a wide reach can be ensured. With a well-designed website and good presentation, online marketing uses web and email to drive sales via electronic commerce. It is mostly used in conjunction with traditional marketing like advertisements in radio, television and newspapers. Online marketing can be of three types – web marketing, email marketing and social media marketing.Web marketing refers to setting up of eCommerce websites, affiliate marketing websites or informative and promotional websites. It involves online search and is geared towards search engine optimisation. Email marketing involves the collection of email addresses and sending out promotional mailers to individual addresses. Sending them to select email ids of persons who may be interested in the product or service may have more effect than sending them out to all the addresses that one can gather. Social media marketing is a kind of word of mouth marketing on a large scale. It uses social networks like YouTube, Facebook, Twitter, Digg, Instagram and so on. Social marketing is a very powerful medium and any negative comment on social media will have an almost immediate and adverse impact on the company and its product or service.Online marketing is especially good for small businesses, as they have a wide reach at a comparatively low cost. It can be effective on a budget that is many times smaller than the budgets of traditional marketing tools. It also has the advantage of being capable of targeting a niche audience. Highly targeted marketing is possible over the internet. While making a strategy for online marketing, the company must be highly focussed on the target audience. The strategy cannot be short term, as most internet users are more knowledgeable and can identify a shallow story easily. The strategy must be consistent and built up over a period of time into a solid reputation. Online marketing must aim to keep the internet users engaged and interested. Consistent strategy and a solid reputation online can bring great results to the marketing effort.