The objective of this research is to (1) study the components of innovation and digital marketing that affect the small and medium enterprises (SME) performance (2) analyze the influence of innovation and digital marketing that affects the SME performance (3) study the SME performance development model. In this mixed research, there were nine key informants and 460 questionnaires were used. The statistics used were percentage, mean, standard deviation, frequency, Pearson correlation coefficient, percentage, mean, standard deviation, survey factor analysis, and analysis of structural equation model. Found that there are three components of innovation, three components of digital marketing, and SME performance has two components. The model shows that innovation has a direct influence on SME performance, innovation has a direct influence on digital marketing, digital marketing has a direct influence on SME performance, and innovation has an indirect influence on SME performance.