How Competitive is Digital Marketing? | 4 Types of Competition To Watch Out For

February 17, 2024

Digital marketing is highly competitive because of the 1.9 billion websites operating globally. 600 million of those are blogs, according to the latest data from WebTribunal. This shows how competing in a saturated industry is getting more difficult as the 21st century progresses. In fact, Neil Patel mentioned in his YouTube video entitled The Future of Digital Marketing Will Surprise You how businesses worldwide are increasing their sales and marketing spending rather than their product development budget. These companies are pouring money into online marketing to boost their brand presence. According to LinkedIn, digital marketing services like SEO and PPC management are among the most in-demand skills today. This is why many digital marketers find it a lucrative and fulfilling career choice.

In his YouTube video, Is Digital Marketing Saturated? What Others Don't Say, Seth Jared Hymes talked about the significant rise in digital marketing jobs on LinkedIn. The number of jobs posted daily surged from 20,000 in 2016 to 200,000 in 2022. The growing number of businesses moving online and the increased use of digital channels for marketing fueled this uptrend. Despite the rise in competition, the digital marketing industry still has a large income potential. Seth Jared Hymes’ student, Keyshawn, earns $70,000 yearly working for a digital marketing agency.

More companies are vying for visibility on platforms like social media, search engines, and email marketing. According to Invoca, the amount of money spent on digital ads worldwide will grow by 8.4% in 2024. Major players like Google, Facebook, and Amazon dominate ad revenue and market share in the digital marketing scene. These giants set high standards and trends within the industry, so smaller agencies and individual digital marketers must constantly innovate to keep up with the competition. But how do you survive in a cutthroat digital landscape? In today’s read, discover the different types of competition, the factors that drive them, and tips on outpacing your industry rivals.

4 Types of Competition To Watch Out for in Digital Marketing

1. Direct Digital Marketing Competition

Direct competition is when businesses or individuals compete head-to-head and target the same customers with similar offerings. This is highly possible since marketers nowadays target a minimum of 3 customer segments, as stated in HubSpot’s 2024 State of Marketing Report. For example, two digital marketing agencies/professionals that are in the same city. Both offer similar services, such as SEO, social media management, and email marketing, and target local businesses for their clientele. They compete in the digital space by optimizing their websites for local search terms, engaging in localized social media campaigns, and using online ads to target the same regional market.

This direct competition concerns who can rank higher on search engine results for local digital marketing services and who can achieve a more compelling online presence to attract the same pool of potential clients. Volume Nine, LYFE Marketing, and Fresh Content Society are great examples of direct competitors for social media marketing services.

2. Indirect Digital Marketing Competition

Indirect competition is when different businesses/individuals offer various products or services to attract the same group of customers. For example, one company/professional specializes in email marketing services, and another focuses on social media advertising. Both target prospective clients looking to enhance their online presence and customer base but offer different methods of achieving this goal. According to Campaign Monitor, segmented promotions like email marketing campaigns offer 760x more revenue. Email marketing services target clients who prefer direct communication with their audience. Alternatively, social media advertising services cater to those looking to expand their reach on social networking platforms like Facebook or Instagram.

These indirect competitors use digital marketing trends and customer behavior analysis to tailor their services to appeal to a similar audience. Some accurate examples of indirect competitors are Mailchimp and Active Campaign (for email marketing services) vs Sociallyin and Social Media 55 (for social media advertising services).

3. Replacement Digital Marketing Competition

Replacement competition is when professionals/businesses offer a product or service that targets your potential clients but provides a better alternative. Technological advancements usually enhance these service offerings. This happens when customers choose a completely different way to meet their needs. It could replace what your business offers. For example, your business provides traditional online banner advertising. Replacement competitors will offer sponsored content or influencer marketing. In fact, visual content is 40x more effective than other online content, according to HubSpot. These types of content are different but can fulfill the same need for online visibility and customer engagement.

Customers can choose influencer marketing over banner ads because it’s a more engaging and modern strategy. A great example of replacement competition is WebFX and ChatGPT. WebFX offers content marketing services like videos, blogs, infographics, etc. ChatGPT provides content that users can easily generate through the platform, such as photos, long-form blogs, social media snippets, and many more.

4. Potential Digital Marketing Competition

Potential competition is when startup agencies/professionals or existing ones decide to venture into digital marketing. Imagine a local newspaper that traditionally focused on print but started offering digital advertising services. They're new to digital marketing and could become competitors for existing digital marketing agencies and professionals. You need to watch out for these potential new players. As mentioned in Gartner’s 2020 report, 60% of businesses plan to become a composable business to provide new features that are 80% more effective. These companies/individuals bring fresh ideas or different approaches to attract your target clients or customers.

5 Factors That Drive Competition in Digital Marketing

1. Low Barrier To Entry

Getting into digital marketing is easy. It allows even inexperienced marketers to dive into this industry. This low barrier to entry increases competition in the digital marketing field. One reason for this influx is the availability of digital marketing courses online. Platforms like Coursera, Skillshare, and Udemy offer various digital marketing courses, from social media advertising to Search Engine Optimization. These courses help aspiring digital marketers acquire the skills necessary to start a digital marketing business or career. Take The Complete Digital Marketing Course - 12 Courses in 1, for example. It teaches 12 popular digital marketing skills. If you check the number of students who took the course, it totals to over 781k students. That’s how many potential competitors you have when entering the digital marketing industry.

2. AI and Automation

Artificial Intelligence (AI) and marketing automation are changing modern digital marketing processes and driving increased competition. For instance, AI can now write content or help with content marketing tasks that people usually do. According to the latest data from HubSpot, 64% of marketers use AI/automation in 2024. Nowadays, digital marketers use AI to generate creative ideas, create articles and social media posts, and perform data analytics. It's making things faster and more accurate. This shift to AI and automation means digital marketers must be skilled in these new technologies to stay competitive. They're not just creating content anymore. They also manage and optimize these automated systems for the best results.

Reddit user YunLihai talked about losing three of his/her clients who have automated copywriting tasks. YunLihai even introduced the topic of career change in the future because of this technological advancement. This shows how AI poses a threat to individuals with zero skills and knowledge of platforms like ChatGPT, Google Bard, and many more.

3. Outsourcing Overseas and Pricing

Digital marketing agencies/professionals often find it easier and cheaper to outsource most of their work. They do this by hiring freelancers in other countries like the Philippines, India, etc. This is possible because you can do digital marketing tasks online and anywhere. In fact, 54% of businesses worldwide reveal that they have more freelancers on their team, based on data from MarTech and Fiverr Pro’s survey. A digital marketing agency can use this approach to save money, as rates are often lower in other countries. This strategy allows them to offer lower prices, spend more on new technology, or focus on client acquisition campaigns.

4. Location

Location is crucial in determining how competitive a digital marketing segment is. Countries like the U.S. and Canada have increased demand for digital marketers because many businesses use online marketing and lack a skilled workforce. The U.S. has over 50,000 brands with more than 124 million households browsing the internet daily, as reported by Statista in 2021. On the other hand, Canada experienced a significant skill gap in 2021. According to The Canadian Press, 70% of companies struggled to find a marketer with competitive digital marketing skills and knowledge. Since these markets lack experienced digital marketers, many beginners flock to these countries' online landscape to look for job opportunities and potential clients.

5. Target Audience

Target audience plays a massive role in driving competition in digital marketing. Choosing an active customer/client segment helps you acquire more projects. However, most of those segments are already saturated with digital marketers/agencies wanting to secure prospective clients. That’s why monitoring consumer behavior is important to identify viable target markets. According to HubSpot’s Blog Marketing Strategy Report of 2024, 44% of marketers state that they have in-depth, high-quality data on their target audience. Digital marketers and agencies must keep up and adapt their plans to match what consumers like and how they act online. This means always learning about the latest trends and what's popular to create the best content strategy.

Is Digital Marketing a Competitive Industry for Getting a Job?

Yes, digital marketing is a competitive industry for getting a job because of the massive number of marketers actively seeking employment in 2024. LinkedIn lists 714,000 individuals tagged as “digital marketers”. Data from Statista also reveal that 85.7% of digital marketers bumped up their social media marketing activities. This means that the industry is getting more saturated, and skilled individuals are growing. A digital marketing job is popular because businesses do more online in the 21st century and need people with digital skills. LinkedIn says that digital marketing is among the top in-demand skills across North America, Europe, the Middle East, and Asia.

Can You Compete in Digital Marketing With No Experience?

Yes, you can compete in digital marketing with no experience, given you have in-demand skills, the right learning resources, and certifications from reputable platforms and programs. In his YouTube video, How To Get a Digital Marketing Job with No Experience, Neil Patel mentioned starting your digital marketing journey by focusing on a specific skill like social media marketing or PPC management. He also suggested selecting a local niche because of its high customer lifetime value. As you gain solid experience, you can start offering free website or content audits, logo generation, etc. This lets you show potential clients what you can offer.

5 Tips To Beat the Competition in Digital Marketing

  • Choose a Niche That is Not Saturated - Choosing a niche that isn't saturated is essential because it allows you to stand out and become the go-to person for that unique service. Saturated niches in digital marketing often include general fields like health and wellness, beauty, and e-commerce. These areas have many established professionals offering similar services. Alternatively, unsaturated niches are those that recently moved from traditional marketing methods to modern digital marketing channels or those with markets with complex needs. Based on Sergio Sigler’s article on The Niche Guru, some examples include home automation, massage chairs, and van life.
  • Become the Best at a Specific Digital Marketing Skill - Becoming the best at a specific digital marketing skill entails getting certifications and applying your skills to real-world projects to gain a competitive advantage. You can check out free digital marketing courses from reliable platforms like Google Digital Garage, Great Learning, Google Analytics Academy, and Simplilearn. Networking with other experts, acquiring unique marketing practices, and seeking regular feedback help refine your skills. Also, sharing your knowledge, like writing blogs or teaching, can deepen your understanding and establish you as a digital marketing specialist.
  • Stay Ahead of Digital Marketing Industry Trends - Staying updated with digital marketing trends, like data analytics, AI, and marketing automation, is vital for creating high-performing digital marketing campaigns. As industry changes happen, enhancing your skills to include new technologies and workflows makes you more productive. Monique Ellis’ Similarweb blog article states that keeping up with industry trends helps you understand client and consumer behavior better and make smarter marketing decisions. This keeps you ahead in the competitive world of digital marketing.
  • Show Potential Clients That You're a Problem Solver - Showing you're a problem solver in digital marketing is all about highlighting real-life successes and providing concrete proof, as mentioned in Herd Digital’s How to Create the Perfect Digital Marketing Portfolio in 2024 article. Present your digital marketing portfolio and detailed campaign analyses on how you’ve helped brands and clients improve brand awareness and consumer engagement. Presenting case studies and client feedback is a great way to demonstrate your digital marketing efforts and comprehensive marketing strategies. This approach shows potential clients or employers that you're not just skilled but also have a proven track record of applying digital marketing tactics to address and solve marketing challenges effectively.
  • Perform a Comprehensive Competitor Analysis Regularly - Performing a comprehensive competitor analysis is crucial because it helps you understand your competitor’s services and unique value proposition. It also offers insight into what specific services your target market is most interested in and why. This knowledge lets you identify market and competitor gaps, learn from other companies’ experiences, and develop robust strategies that set you apart. You can use tools like Google Analytics to understand website traffic, SEMrush or Ahrefs for SEO insights, BuzzSumo for content trends, and social media analytics tools like Sprout Social or Hootsuite to evaluate social media presence. SpyFu is also great for checking out competitors' ad campaigns. Doing regular competitive analysis helps you discover unique insights for making better digital campaigns.

Can You Make Money With Digital Marketing?

Yes, you can make money with digital marketing by creating sales funnels and digital marketing campaigns, running paid advertisements and SEO initiatives, and developing a digital marketing strategy for different clients. Reddit user DoNotTestMeBii mentioned how he started his online business by gaining 4 to 5 years of industry experience. DoNotTestMeBii makes $2,500 per website through services like on-page SEO optimization, landing page creation, and Google Ads account management.

What are the Top Ways To Make Money With Digital Marketing?

The top ways to make money with digital marketing are lead generation, SEO, and content creation. These services allow you to earn $10,000 to over $50,000 monthly in passive income. According to Demand Sage, 53% of all online site traffic comes from organic traffic. These industries have a deep focus on organic advertising, which makes your potential profit margins higher than other online businesses. Other popular ways of making money online in 2024 include PPC ads management, affiliate marketing, freelancing, and YouTube advertising.

Is Digital Marketing in High Demand in the Future?

Digital marketing is in high demand in the future because of the increased use of social media platforms and online marketing campaigns and the high internet penetration rate. This growth stems from consumers’ changing shopping habits and the market’s technological advancements. Based on summarized reports from Datareportal, almost 65% of the global population spends more than two hours on social media sites daily. Businesses use this opportunity to boost their online presence. That’s why starting a digital marketing career in the 21st century is profitable.

Why Local Lead Generation is a Better Opportunity Than Digital Marketing

Digital marketing offers a lucrative income and diverse opportunities for businesses and individuals, but local lead generation lets you earn a more stable and predictable passive income. The digital marketing industry is getting more saturated in 2024 because of free courses and learning resources online. Aspiring digital marketers are flocking to in-demand niches like SEO and paid ads management. However, standing out from thousands of competitors entails constant upskilling, sacrificing tremendous time and effort, and continuously searching for potential customers and clients.

Scott Lambert’s article on the 7 Reasons Why Digital Marketing Fails mentioned that creating an effective digital marketing strategy requires a competitive analysis, a content marketing plan, in-depth market demand research, and many more. Building a successful agency or career has many requisites. You’ll need to understand the basics of digital marketing, how the industry works, how consumers behave, and the right techniques to retain clients. It will take a toll on your mental and physical well-being. Reddit user Any-Mathematician951 also commented that earning well means venturing into a managerial role. Specializing in a digital skill is not enough.

Local lead generation is less competitive than digital marketing because of its localized niches. Plus, it requires fewer in-depth analyses and research. Since the target market is ready to buy, you don’t need to engage them continuously or publish high-quality content daily. All you need is to build websites for local services. Then, you optimize a business's online presence organically for local searches through SEO. Once they’re ranked on search engines like Google, you can start collecting the “free” leads that contact your websites. You can then help local businesses by selling the leads you acquired. This lets you earn around $2,000 to $10,000 monthly per website.

If you’re looking for an online business model with less competition and more opportunities for growth, success, and profitability, then local lead generation is the best option for you.

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Ippei Kanehara

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