This study examines the impact of digital marketing on competitive advantage and performance of Micro, Small, and Medium Enterprises (MSMEs). Using a quantitative method with SPSS and SEM, the research finds that digital marketing significantly enhances competitive advantage and positively influences MSME performance. Competitive advantage also significantly affects MSME performance. Furthermore, digital marketing positively affects MSME performance through competitive advantage. The study highlights that digital marketing strategies, such as using digital TV, social media, email, mobile/wireless, internet, and databases, are crucial for improving competitive advantage and business performance. The results support theories that digital marketing leverages digital technology to achieve marketing goals and enhance competitive advantage. The study also shows that competitive advantage is a key factor in determining MSME performance. The findings indicate that digital marketing strategies have a direct and indirect effect on MSME performance, with competitive advantage acting as a mediator. The study concludes that implementing effective digital marketing strategies is essential for improving the competitive advantage and overall performance of MSMEs in the digital era.This study examines the impact of digital marketing on competitive advantage and performance of Micro, Small, and Medium Enterprises (MSMEs). Using a quantitative method with SPSS and SEM, the research finds that digital marketing significantly enhances competitive advantage and positively influences MSME performance. Competitive advantage also significantly affects MSME performance. Furthermore, digital marketing positively affects MSME performance through competitive advantage. The study highlights that digital marketing strategies, such as using digital TV, social media, email, mobile/wireless, internet, and databases, are crucial for improving competitive advantage and business performance. The results support theories that digital marketing leverages digital technology to achieve marketing goals and enhance competitive advantage. The study also shows that competitive advantage is a key factor in determining MSME performance. The findings indicate that digital marketing strategies have a direct and indirect effect on MSME performance, with competitive advantage acting as a mediator. The study concludes that implementing effective digital marketing strategies is essential for improving the competitive advantage and overall performance of MSMEs in the digital era.