L2 predicted the death of the advertising complex in the 2015 Year in Review briefing. That sentiment echoes the observations of executives at the largest beauty conglomerates: L’Oréal CEO and Chairman Jean-Paul Agon has said “The brands that grew the most in 2014 were also very low [advertising-and-promotion] intensive like Urban Decay, like Kiehl’s, etc. … NYX has no media. Kiehl’s has no media. Urban Decay has no media.” Similarly, Estée Lauder’s Fabrizio Freda has noted that the conglomerate’s fastest-growing brands – Jo Malone, La Mer and Bobbi Brown – are not advertised in the traditional way.
There is evidence that brands are spending more on social media than on magazines, as Facebook’s 2015 ad revenue is expected to be 2.5x that of consumer print magazines.
Furthermore, digital has made a space for quality to triumph pure spend. For example, NYX owns 1.4% of organic search real estate for unbranded color cosmetics terms while L’Oréal Paris owns just 0.3%. That gap exists even though L’Oréal Paris outspends NYX in keyword buy by 471x.
Members can view L2’s Year in Review briefing here.