Weekly Newsletter - 11.7.2024

PLUS: E.l.f.'s Stanley collab sellout & McKinsey's warning on price-led growth

Author

Rachael Kennedy
November 07, 2024 • Estimated Reading Time: 7 minutes

YouTube surpasses forecasts in Alphabet's Q3 earnings call

Google parent Alphabet's Q3 earnings call revealed YouTube's impressive performance, bringing in nearly $9b in ad revenue—a 12.2% increase year-over-year. This substantial growth, typically undisclosed by Alphabet, signals the platform's rising dominance in digital advertising.

👉 Fospha highlighted this upward trend in their their latest report, identifying YouTube as the second-fastest-growing ad channel for eCom brands by ad spend.

While YouTube currently reports the highest CPA among Google channels as brands adapt and optimize their campaigns, its increasing popularity reflects a broader shift toward brand-building channels for long-term growth. The platform's potential for driving brand growth makes it one to watch in coming quarters.

BEAUTY INDUSTRY NEWS

E.l.f Cosmetics effectively generates buzz through strategic collaborations, like its recent partnership with Stanley. This collaboration, inspired by viral trends, featured lip oils and matching tumblers. Available online and at Target, the collection quickly sold out, demonstrating the power of innovative partnerships in the direct-to-consumer market.

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BEAUTY INDUSTRY TRENDS

The beauty industry, projected to grow to $590 billion by 2028, faces a shift as price-fueled growth wanes. McKinsey & Co.'s analysis suggests that brands must pivot from relying on price increases to strategies centered on unit growth and consumer engagement.

This transition demands a focus on brand equity, product efficacy, and innovative marketing to maintain consumer loyalty and drive sales. As inflation stabiliSes, brands are urged to enhance their value propositions, leveraging social media and personalized experiences to foster deeper consumer connections.

Emerging brands, particularly, are poised to capitalize on this shift by emphasizing innovation and community engagement. The rise of social media has democratized brand growth, allowing smaller players to capture market share through creative strategies rather than price hikes. Investors are increasingly interested in brands that demonstrate operational efficiency and robust customer retention, recognizing the potential for mergers and acquisitions as legacy brands seek growth through strategic acquisitions.

PRODUCT SPOTLIGHT

Beauty Launchpad's 2024 Readers' Choice Awards highlight top professional beauty products, from hair care to salon software. Winners include DESIGNME HOLD.ME Styling Stick and Malibu C Hard Water Shampoo & Conditioner. The awards celebrate innovation and excellence, offering insights into the latest industry trends and advancements.

Jamie Bolton reveals how top eCommerce brands drive resilient growth:

🌐 Diversification is Key: A diverse channel mix acts as an “insurance policy” for brands amid rising CPAs and a challenging market.

🔄 Stay Agile: What worked last year may not work today. Top brands adjust their strategy over time, adapting to new growth levers as they mature.

📊 Measurement Matters: With channel diversity comes more complex measurement needs. Only with full-funnel attribution can brands assess their channel mix and remain agile.

For a full rundown, check out the full post!

DIGITAL MARKETING

Cryptocurrency is disrupting the beauty industry, offering secure and transparent payment options. Here's how top brands are embracing this trend:

  • Lush Cosmetics: A pioneer in crypto adoption, Lush began accepting Bitcoin in 2017, aligning with its sustainable and ethical values. This move has expanded its global reach by simplifying international transactions.

  • The Fragrance Shop: Partnering with BitPay, this UK retailer accepts various cryptocurrencies, appealing to tech-savvy consumers eager to purchase luxury brands like Chanel and Dior.

    One of the pioneers in the beauty industry when it comes to the adoption of cryptocurrency, Lush Cosmetics began welcoming Bitcoin payments as far back as 2017.

Cryptocurrency payments offer several benefits:

  • Fast, Secure Transactions: Blockchain technology ensures swift, fraud-resistant payments.

  • Global Reach: Crypto eliminates currency exchange hassles, allowing brands to connect with international customers seamlessly.

As more beauty brands recognize cryptocurrency's potential, expect wider adoption, enhancing shopping experiences for crypto enthusiasts.

MARKETING INSIGHTS

Thanksgiving. Christmas. Holidays are just around the corner! To navigate rising holiday advertising costs, diversify your strategy by incorporating platforms like TikTok, YouTube, and Connected TV. These channels offer competitive pricing and reach new audiences. Focus on user-generated content and platform-specific strategies to optimize engagement and conversions, ensuring a successful holiday marketing campaign.

EARNINGS REPORT

Estée Lauder's Q1 fiscal 2025 results show a 4% sales decline, primarily due to challenges in China and Asia. Despite this, growth in Japan and emerging markets offers promise. The company is focusing on strategic innovations and leadership changes to navigate the complex beauty industry landscape.

MARKETING STRATEGY

LinkedIn's new research highlights the effectiveness of connected TV (CTV) campaigns for reaching decision-makers. With LinkedIn's CTV ad options, you can extend your marketing to platforms like Paramount and Roku. This approach could enhance your campaign's reach, especially among influential LinkedIn users who regularly consume CTV content.