What it means
It is not necessarily your homepage, and usually it should not be. A landing page carries on the exact conversation the ad started, and gives one obvious thing to do next.
Why it matters to a small business
This is where most small-business ad money leaks away. The ad promises a specific thing, the click lands on a general homepage, and the visitor has to go hunting for what they were promised. Most will not. Sending the click to a page about the thing you advertised is usually the single biggest improvement available for no extra spend.
The bit people get wrong
Adding more options makes it worse, not better. Every extra link on a landing page is another way out of it. A page with one clear next step outperforms the same page with a nav bar, a newsletter box and three other offers on it.