Following years of decline, ad spend in the global beauty market is finally starting to look good, according to Zenith’s first Beauty Advertising Expenditure Forecast. This year growth is expected to increase from -1% to nearly 3%, totaling $14 billion in the US. By 2021 spend will increase about 5%, driven mostly by e-commerce advertising and superior premium digital environments.
When the beauty market started becoming more fragmented due to the proliferation of media channels, and new competition from D2C, eco- and retailer-owned brands emerged, spend weakened. But a turnaround is happening as brands embrace new and traditional tactics to reach their audiences. Here are a few of the forces helping in the recovery of ad spend.
Social and eCommerce Rejuvenate Sagging Spend
As the maturation of Facebook, Instagram, YouTube and other digital platforms increase the supply of high-quality environments, brands are able to reach consumers more easily than ever in all the places consumers search for inspiration. In addition, brands in the beauty category are continuing to invest in internet advertising to take advantage of its dual combination of effective brand building and a direct channel to sales.
“The advertising landscape for beauty marketers is changing, enabling brands to build more personal and direct relationships with loyal consumers,” said Lauren Hanrahan, CEO of Zenith USA. “Beauty brands are investing more in native content partnerships, video and newer search categories like voice search and e-commerce marketplaces.”
A Fresh New Look
However, despite the shift in attention from offline to online channels, the majority of beauty purchases are still made in brick-and-mortar stores. Because most consumers want to experience a product before they buy it, the online experience is primarily acting as a gateway to an offline purchase. Beauty brands have recognized that although online retail has opened new markets and created new opportunities, they must provide inventive, new and exciting offline approaches to reach and entice their audience.
What this means to marketers, according to Forrester, is that brands will need to work with retailers to create more in-store experience opportunities, and use new technology like Augmented Reality to create digital brand experiences that allow consumers to try before they buy online. By tying together their e-commerce and in-store experiences, beauty brands can lead consumers down the path to purchase more effectively.
Traditional Media Still Sitting Pretty
Television and magazines remain important to beauty brands and attract a considerably higher share of beauty ad spend than other verticals. Magazines commanded 21% of spend in 2014, but fell to 13% in 2018, though that’s still high compared to the 4% share across all categories. By 2021, magazines will account for 8% of beauty ad spend versus 3% for the market as a whole. Similarly while television’s share of beauty ad spend dipped below 50% for the first time in 2016, and fell to 40% in 2018, that’s still higher than the 31% of ad spend across all categories.
Some of what’s keeping beauty stronger on the traditional advertising front might be attributed to D2C brands realizing there’s a limit to the market share they can win without creating mass awareness, and many are beginning to invest in traditional brand-building campaigns.
Ultimately, in today’s marketing environment beauty brands would do well to utilize a number of different strategies to stay competitive and get closer to their consumers.