Beauty is Pain: Finding Opportunities in The Beauty Industry's Competitive Landscape

The beauty industry is ruthless. Creative campaigns are backed by multi-million dollar ad budgets, and there's a well-established workflow where influencers feed the marketing arms. The only other industry I have seen this type of volume in is Gaming.  Most brands sell their products through Sephora, a platform that often acts as a black box of information. Brands receive reports on what worked and what didn’t, but rarely gain insights into the specifics.

Influencers charge hundreds of thousands of dollars for content with limited usage rights, often capped at one to three to six months. These deals, which can include percentages on ad spend, carry the risk of not performing as expected. Despite advertisements being viewed on phones, there's a meticulous attention to detail that begs the question: is all this really necessary? Somewhere in between TikTok and LVMH lies today’s standard of “cool”.

However, the beauty industry sticks to what works. Common tactics include:

• Product Pumping/Displaying Openers: Highlighting the product upfront to grab attention.

• Voice Over with B-roll: Combining voice narration with footage of the talent and product.

• Split Screens: Showing multiple perspectives or before-and-after comparisons.

• Talking Head Testimonials: Featuring individuals sharing their positive experiences.

• TikTok Trends: Attempting to stay relevant with trending formats and challenges.

• Product Shots: Highly polished visuals to showcase products.

I once conducted a test using an influencer with about 100k followers alongside one of my most effective actors. The influencer/creator talent performed about 3.7x better than the actor, who still secured second place in a campaign with a high five-figure ad spend. The beauty industry is impressive, but it's ripe for a refresh in performance creative.  Trust me, I fully subscribe to the 'if it ain't broken, don't fix it' philosophy. However, there's immense potential for short and long wins by incorporating strategies from other industries. After all, we're dealing with performance marketing, where algorithms tend to favor similar tactics. The real challenge lies in conveying this to brand departments.   

Key Opportunities:

1. Leverage Influencers Effectively: Prioritize influencer collaborations that truly connect with your target audience. Consider partnering with micro-influencers, who often have a smaller but highly engaged community, as opposed to macro-influencers, who can sometimes feel disconnected from their vast audience.

2. Optimize Creative Tactics: Reassess the balance between overproduction and authenticity to enhance engagement.  If it's for social, then push the brand.  If it's for performance, sell the brand.

3. Utilize Performance Data: Gain deeper insights from ad performance to refine and improve future campaigns. Don’t ignore the numbers!

The beauty industry is poised for innovation, and with the right strategies, there are immense opportunities to enhance performance and drive success. Let UA and Creative guide you to these opportunities.