20 years ago, everywhere on Straits Times or TV, you’d see Channel 8 celebrities endorsing beauty salons.
I predicted a decline in the beauty salon industry in an old article.
We rarely see beauty salons advertising anymore these days. The only one recall seeing is that SlimFit advert of the rollerblading woman. But this industry has mostly already been replaced by Medical Aesthetic Clinics.
Likewise, today, all signs point towards digital marketing as the future. Businesses want to start advertising. Students want degrees in it so they can secure good careers. But are there signs of opportunities? Or danger?
FB ads in 2015 targeting a custom audience in the women/beauty segment
FB ads targeting the same segment in 2017
The above images show my campaigns in 2015 and 2017. In 2017, I improved the Relevance and CTR to the point where my ads should cost 50% CHEAPER than in 2015 … But instead, I’m paying more in 2017! What the heck is happening!?
Observe the column “CPM”, which means “cost-to-reach-1000-people”. Notice how it doubled from 2015 to 2017?
Let’s use the simple analogy of property here (because Singaporeans love property).
Property/Land = Google, Facebook, Stomp, YouTube, HardWareZone, PropertyGuru, etc
Property agents = Digital marketers
Homebuyers/Investors = Advertisers
Today’s market is one where the property is overheated. The cash-rich Chinese (MNCs, government grants, SMEs with high profits) are bidding for every property they can find. This pushes the price of everything up. Property agents (digital marketers) are simply there to help the MNCs buy these overheated properties.
All these results in 2 major problems.
Because of how hot the market is, more agents are entering every year. The growth rate of property agents exceeds the growth rate of property buyers.
This only causes the commissions (salary) of the agents to drop. Don’t want the deal for a measly 1% commission? 100 other agents are queuing up.
A good agent can be the difference between a losing deal and be making a profit. Powerful agents might even have their own exclusive buyer/seller network. Unfortunately, property buyers are unable to tell who’s good, and usually, just go for the cheapest agents.
The future isn’t promising for agents (digital marketers).
Think back to the above Facebook ads example. Now imagine Mary, young Singaporean lady who’s about to get married.
Coca-Cola, a wedding photographer and cake shop all want her business. How much can they pay?
Both Coke and the wedding photographer can afford to pay high prices for this space. This puts our cake shop in a dilemma.
Match their bids and pay today’s property (advertising) prices? Or give up? Match their bids and you lose money. Give up and your business can’t grow fast.
Remember, my Facebook ad statistics only compared from 2015 to 2017. I did not show the ridiculous increase from 2010 till 2017. I suspect it’d continue to rise and double up again within the next 3-5 years.
In this overheated property market, there is simply no room left for the retail investor/home buyer (small businesses).
But as with any market in crisis, there is always opportunity.
We are in this situation today because of 2 things:
Point #2 is a KEY opportunity. Basically, anything that creates new advertising space online WILL be able to generate revenue. SGAG, XiaXue and other blogs, random niche websites, Carousel. Get enough traffic and advertisers WILL come.
Don’t be a property investor. Become a property developer. Hot money is looking for properties. Build properties for them!
With the growing popularity of digital marketing, more youths and mid-career upgraders are looking to pick up the skill.
Recall the Facebook ad example again. See how much can change in just 2 years? This also means no school syllabus will ever prepare digital marketers for the real world. To the poly and university undergrads here, I’m sorry to say but whatever you learn in school is ALREADY outdated.
Constant upgrading is needed in this industry. And what better way to take advantage of it than to teach aspiring marketers? Courses funded by SkillsFuture credit and those that can issue certificates are the most sought after.
What do major funds do when a property is overpriced? They seek alternative properties or simply look at stocks, bonds, startups and everything else that might give a better return. Here are some key areas that I personally feel are much more promising than digital marketing:
So if you’re a small company, what options are left for you? Basically, I feel AdWords and SEO will always be money makers. They target specific buying intent so profit will be there. The only problem is it’s limited in volume.
SEO has also changed a lot since 2015, and not many vendors in Singapore are updated about it. This is especially important for more competitive spaces such as medical, finance, weddings, law etc. If you try to SEO your site using the same methods you did in 2015, I guarantee you won’t get into the top 5. Look forward to a new article about a few experiments I’m running in the most competitive industries in Singapore and how the SEO changes have impacted all existing players.
Things are always changing in digital marketing. It’s up to individuals to keep up. Or better yet, go into Artificial Intelligence.