Global investment banking firm, Jefferies, recently hosted a meeting with Tribe Dynamics, the leader in translating digital conversations and influencer content into a measurement of earned media value (EMV). Several insights came from their meeting, including positive sales forecasts for both Estée Lauder and e.l.f. Cosmetics; the continued trend of beauty companies acquiring brands with higher rates of EMV vs. sales; and a shift from paid to earned media whereby smaller brands continue to take share from larger brands, with larger brands increasingly tapping earned media channels to narrow the performance gap. Here, several other highlights from the meeting:
- Estée Lauder is regaining some EMV after a challenging period following the Estée Edit launch. Both La Mer and Glam Glow have tripled the amount of EMV generated in Q217 vs. Q216. Gains in portfolio EMV, coupled with a shift toward margin beneficial improvement in skincare implies EPS growth could accelerate, even on consistent measures of 6% to 8% FX-neutral topline growth.
- MAC, which accounts for the lions’ share of Estée Lauder’s EMV, has shown sequential improvement in EMV over the past 12 months.
- Too Faced continues to over-index in EMV vs. revenue – a positive signal of market share potential.
- Fan/influencer created digital media is often more effective at driving conversion; e-commerce provides direct access without a distribution intermediary.
- Brands such as e.l.f. have garnered substantially more EMV than existing revenue would imply through targeted and strategic use of micro influencers. Given diversity in the beauty bag, multi-brand specialty destinations including Ulta Beauty and Sephora continue to foster experimentation and discovery. Tribe and NPD have both noted that the number of new brand entrants continues to rise.
- Beauty companies with the financial capacity to acquire brands will continue to seek firms with higher rates of EMV vs. sales. Among the fastest growing brands year to date are Anastasia, Tarte, NYX, Too Faced, Tatcha, Huda Beauty, Biotherm, and Freedom Couture. Legacy brands showing signs of inflection include MAC, Estée Lauder, and L’Oréal Paris.
- Total EMV created across beauty categories is still significantly skewed toward cosmetics (85% EMV share). Influencers are increasingly creating content about skin care (5%) and hair care (8%), particularly tied to distinct trends.
- In skin, influencer content has grown surrounding masks, routines, self-tanner and natural ingredients from brands including Kiehl’s, Lush, Farsali, Loving Tan and Glam Glow.
- In hair care, color brands are increasingly partnering with influencers to demonstrate artisanal applications. Top trending hair care brands include L’Oréal Paris, Brazilian Bond Builder, Pulp Riot, Redken, Garnier and Olaplex.
- Tribe is observing a rise in influencer content creation in tools, hair extensions and wigs from brands such as Bellami and Coty’s ghd.
