Are Beauty Brands Getting The ROI They Want From Digital Advertising?

In this edition of Beauty Independent’s ongoing series posing questions to beauty entrepreneurs, we ask 26 brand founders and executives: What digital advertising have you tried, and have you gotten the return on investment you expected from it?

EMILY H. RUDMAN Founder, Emilie Heathe

We have tested running Google ads, Facebook/Instagram ads, and some display and affiliate marketing. For the most part, we have done well and received the ROI we wanted across a lot of channels. However, FB/Insta has been exceptionally hard to navigate, especially at this time as ads have become pricier and CAC [customer acquisition cost] has continued to rise. 

Because it is an ecosystem and each part amplifies the other, you have to have a 360 strategy across all your paid and earned/organic efforts. We do the best when we are using organic efforts to drive a majority of traffic and, then, are amplifying with retargeting ads. Affiliate links have also been crucial for key press and onsite traffic. We plan to ramp up our influencer efforts for 2021.

Tope Adubi Founder, Kilali Cosmetics

My career before being a full-time entrepreneur was in digital marketing for a large nonprofit organization. However, being an entrepreneur with a small for-profit business, I can assure you the difference is clear. When I run ads mostly on Facebook and Instagram, sometimes I see my ROI in sales for my business. Other times, I do not make any sales, and it just burns! 

I am still a small business, so my marketing budget for a month is not as large as the budget I used to work with in my previous career. Every cent needs to be poured back into the business. I comfort myself in the fact that the ads that don't bring in sales bring in awareness for my brand, which will in turn come up as an "organic" sale in the future.

Irina Gottesman CEO and Co-Founder, House of Grō

So let’s start with the fact that I literally Googled “top trends for 2021” before answering this question. Everything moves so fast with today’s digital world. We are applying social media marketing and old-school email marketing and influencer affiliate programs. The one we’re most excited about is Rewardstyle

I’m really looking forward to virtual educational Q&A. My background is in sales. I always think like a customer, it’s in my DNA. I am looking forward to getting on the sales floor again with the brick-and-mortar model. Personally, I think nothing can bring more of an ROI than getting to know your customer and educating them on your product. In today’s world, it’s insane you can do this online from the comfort of your home, too.

Ilinca Sipos Founder, Rara Club

In terms of digital marketing, we've tried it all. Since we're a fairly new company, it's been all about testing, testing and more testing. For social media, our larger ROI comes from organic growth and influencer marketing, where we had sustained a 15% week-over-week growth for the first five months. Because of that, we've decided to pull out our advertising budget there and reallocate it to SEM [search engine marketing), where we’ve seen the strongest ROI.

Camrin Agin Founder, ALTYR

I have a love-hate relationship with digital advertising.  It is important to reach people you may not otherwise reach, but ours is a service that in particular needs to be understood and spread through those who have experienced it. I like marketing as a tool to spread awareness, which is obviously needed, but it doesn't necessarily translate to sales, which would be the ultimate goal, though not one that I expect through a normal ad spend. For us, it is more about brand building and getting the word out. Once you hear about us, maybe you sign up for our newsletter, try a free mini meditation, we whet your appetite for a real deal wellness experience.

Eric Scheibling Co-Founder, Feals

It feels like we’ve tried it all! Fundamentally, we believe in first trusting your gut, testing all ideas and letting the data speak for itself. Unfortunately, along with the CBD space comes with a litany of restrictions and regulations, which, in most cases, results in an idea failing via an ad rejection. But failing is learning and, while frustrating at times, the outcome hasn’t been all negative. It’s caused us to move away from our more direct-response marketing roots, and lean more heavily into CBD education and community building.  

While this strategy produces a much lower ROI than we’d like, it’s been strong enough to still allow us to scale rapidly over the last two years, and it has a ton of positives which we feel outweigh the negatives. We’re spending our ad dollars on education, trust building, and helping reduce the misinformation and negative stigma that plagues our industry. It’s a much longer tail approach, but we believe it’s better for consumers and the CBD community as a whole.

Vera Oh Co-Founder, Voesh and Glowoasis

We’ve been in the professional beauty industry about eight years. We’ve felt comfortable and accustomed to traditional marketing initiatives like advertisements in magazines and attending trade shows. Since the coronavirus pandemic started, we had to find a way to show our brand to people digitally.

Starting last March, I began digging into hundreds of YouTube videos and did tons of research on Google to understand the concept of digital marketing. After a lot of trial and error, we’ve built up our internal team and hired an agency (Webfx) to work together. Yes, we can see the ROI through our efforts, but, at this point, we still spend more than what we make. I think our ROI will increase if we narrow down and pinpoint our exact audiences, and serve them engaging content that showcases our products, brand mission and skincare benefits in a fresh, informative way.

Aleena Khan Co-Founder, CTZN Cosmetics

We have tried both working with ad agencies and also running ads in-house using online platforms. What surprised me was seeing which pieces of content generate higher ROI versus the ad assets I assumed would perform well. We have learned that video generates higher ROI than images for us, specifically video tutorials zoomed close in to the face showing clear application of our products more than product images or swatches. What I did not expect is how long and critical the testing period can be before knowing if an ad is worth keeping and potentially scaling to allow the ad time to strengthen.

Melissa Jochim Founder, High Beauty

Google and social ads. We have not been successful in consistently running digital ads because we have the word “cannabis” in our product names and brand messaging. The algorithms see it and take down our digital advertisements stating we are in violation of their terms, even though our product and content does not violate their terms. This is a nut we are beginning to crack. We have focused on reimagining our brand copy as well as optimizing our website so we can be successful in digital advertising.

SELMIN KARATAS Co-Founder and CEO, Kazani

Before you do any digital advertising, the first thing should be a great website. It needs to be up to par, and I have been working on [mine] for the past couple of months. Websites also need to be optimized for a faster speed. Visitors look at websites for a couple of seconds, and those pages should load fast. I added an app Superspeed Free Speed Boost on Shopify. I also had a lot of text on the website and that needed to change as people love visuals. I replaced it with pictures.

According to statistics, 80% to 97% of e-commerce businesses fail. After reading a lot of articles on how to do digital advertising and taking a bunch of digital marketing classes, I decided that I cannot do this all by myself because there's a lot that goes into digital advertising. I have been speaking with a couple of marketing agencies who can do the work every month.

So far, I did not get any ROI from what I have done myself, but I did have a lot of impressions on Instagram. To get ROI from digital advertising, brand awareness is key. Writing keywords and being in the first page of Google is an arduous task for an indie beauty brand as bigger companies spend millions of dollars on it. Being active on social media, engaging with followers and continuously building brand awareness is key. Some recommended apps from Shopify: Postscript SMS Marketing, SEO Doctor. To get an ROI, the whole thing should be done through a professional agency where they help with all the digital work. We will work with an agency when we are ready.

Andrea Lisbona CEO, Touchland

We have deployed a true digital omnichannel strategy, including but not limited to paid media, paid search affiliate email (automation and campaigning), display and other social media advertising [on platforms] such as TikTok and Pinterest. Our biggest ad spends have consistently produced a profitable first purchase unit economy, which allowed us to maintain profitability brand-wide while we experienced double- and triple-digit month-over-month growth. Although paid digital advertising has been a great force multiplier to our expansion, our brands growth is most deeply seeded in our organic expansion via organic social search and word-of-mouth virality.

Anna Persaud CEO, This Works

We are very active in terms of our digital advertising, and, in fact, in 2020 dialed up our investment here as our customers turned to the online space, which we saw increase our relative share of voice.  In the U.S., we also invest heavily in our influencer program. What we have found across the board is that digital advertising isn’t a magic switch that you can flick and see an immediate ROI. It’s part of a complex marketing ecosystem and, when measuring ROI, it's critical to remember that, just as in offline marketing, each channel plays a different function and needs to be measured accordingly. 

For example, our influencer program is focused on building brand awareness rather than sales conversion and, if we were to measure it’s ROI purely on a conversion metric, the numbers don’t do justice to the halo impact we know this program has across the whole of our business both online and physical retail.

It’s also worth noting that the success we’ve seen with our digital advertising dovetails with our businesses focus on our own website conversion. This has seen us make improvements to the site with [an] enhanced user-generated experience in addition to improving our customer experience on a mobile device, launching a subscription program, and implementing new payment methods like Klarna and Apple Pay. Testament to this approach is that we’ve seen a 168% uplift in new customer acquisition.

Lizzy Pike Founder, Face Halo

Our digital advertising has been an interesting journey. We have tried external agencies along with doing it in-house with our team, and it is still a work in progress. As the digital landscape is so fast moving and changing rapidly, we are discovering that we really need both, external and in-house. It has without a doubt at times been the most complex part of our business as it is the arm of the business that almost needs 24-hour monitoring. 

Google is different to Facebook is different to Instagram is different to TikTok is different to Twitter etc., etc., and, no, I am not exaggerating. It is all so different, and you have to work out how to talk to each audience on each different platform. Which ad will resonate with which audience? What copy should I write for which ad on which platform? How long will Facebook keep this ad in the learning phase? How many ads should I be running? All these questions and more and, then, as soon as you think you might just have it, they go and change the rules! So, I guess the answer is that we keep on trying. We get it right and, then, we fast pedal to keep up with the ever-changing landscape. This digital world is not for the faint heart.

Yes, we have gotten the ROI we expected—at times. This is why it takes constant monitoring. If it was possible to set and forget once you start getting the ROI you want, then that would be perfect. But, alas, that is not how digital works. You can spend big dollars and many hours creating the most amazing ads and, then, in one afternoon, you can create a really cool idea for an ad with your iPhone that took you two minutes, and lo and behold that is the ad that takes off and goes viral. Yep, go figure!

NINA TULIO Founder, Nina Tulio

I love a good digital media marketing campaign. It’s so important to know your audience first before you pick which media platform that will give you the best ROI. I have tried quite a few: Facebook ads, Instagram ads, Google ad words and, of course, email marketing campaigns. 

Out of the social platforms, Instagram ads work the best for me when it comes to conversion and brand presence. Plus, it's the best bang for your buck, and my target audience fits in perfectly with their demographic. Google AdWords works very well in the beauty industry and can boost your business with new clients in no time. However, you have to have the budget to invest at least $125 to $175 per month to see some traction. 

Hands down, email marketing campaigns are my go-to. You have a captive audience that is waiting for you to speak to them. In most cases, they already know, love and trust you. In my opinion, email marketing campaigns have the highest conversion rate with the least financial investment.

Lindsay McCormick Founder, Bite

As an online business, we do a lot of digital marketing! Because we have such high organic engagement with our ads and posts, we end up with fantastic ROIs on our ads. We’re also really diligent about watching our ad spend and how it's allocated as well. If we do run an ad that doesn't do well (as in, doesn't have a great ROI), we’ll pull it and either rework or abandon it so we can maintain the return we need on ad spend.

Jane Moran Brand Vice President, Eva NYC

When it comes to our digital marketing strategy, our team is constantly curious, and we’re always exploring what else we can do to reach our consumer in fun, new ways. Our in-house creative team produces all of our content across channels and works in tandem with our digital team to create engaging, out-of-the-box content that is platform-specific and audience-specific. 

Facebook, Instagram and YouTube are key digital channels for our consumer, and we've made significant progress on Pinterest this year to help us achieve massive brand awareness as well as incredible consumer engagement. In 2021, we’re investing more in creating authentic and organic content specifically designed for TikTok to reach the younger subset of our audience. 

Gina Rivera Founder, Phenix Salon Suites

Nowadays, there are so many avenues for digital advertising. We develop some very good social media campaigns with our team that are quite effective. We do work with some professional firms that help us to achieve the ROI that we seek. In the event that we are not achieving the results that we anticipate, we reevaluate our approach to optimize our advertising investment.  

Further, we have developed a cutting edge app for beauty professionals called Gina’s Platform. Through the app, professionals may operate their entire business through the ease of their telephone. The app includes multiple features such as scheduling, credit card processing, inventory tracking and a variety of other important elements for business owners. On the corporate side, it’s also a fantastic communication tool where we can inform professionals of special deals, upcoming events and product sales, which have all proven to be valuable.

Erika Kussmann CMO, Paula’s Choice

As a digitally native brand, it is all about digital advertising for us, and we’ve built a robust approach to achieve the growth we’re experiencing. We employ a brand-first approach with our content and creative, personalize by audience segment, and use our data-rich capabilities as a direct-to-consumer brand to track success across all of our initiatives. We’ve built our own attribution model to measure results across channels and campaigns to ensure we’re profitably growing and, in fact, remaining first-order profitable. We are also always looking to try new things, and we have an agile test-and-learn approach for new strategies as we grow.

SIRKKU HAHN Founder and CEO, Inari Arctic Beauty

At the beginning of this year, we set up a clear roadmap and activated, monitored and optimized all our digital marketing activities across all channels. This improved setup helps us now to identify which areas are not performing as we hoped and measures general cost metrics much better. Majority of the focus lays on gaining insight through digital data. To test and gain more information about new markets, we started an international advertisement campaign last spring. 

In this digital trial as we call it, we tested various channels, forms of advertising and content. This broad digital campaign has brought visibility for Inari in the tested markets, especially in Sweden and the U.K. One key result was a clearer picture of our main target group. In the end, we did not get the exact expected ROI, but received extremely valuable data which in this campaign was the primary goal. Knowing where to put our efforts will help to improve our digital marketing ROI over time.

Junko Gomi CEO, H2O+

We have tried digital advertising on Facebook, Instagram, YouTube and various Google channels. While ROI has not met our expectations, we have seen some improvements in the last year, and continue to use digital advertising and have just adjusted expectations for each channel.

Charlotte Knight Founder and CEO, Ciate London

We work with a performance marketing agency for our paid social ad/Google Analytics and SEO strategy. The partnership is extremely collaborative to ensure we are able to be proactive with our upcoming launches whilst maintaining a reactive approach to trending keywords, makeup trends and product revivals. It does take time to build out your strategy to find your formula. You have to be prepared to try a lot of tactics in order to start seeing strong ROAS [return on advertising spend]. It has taken us a solid year of testing to grow our ROAs from an average of 1 to now just under 4 with our target ROI being 4.5 to 5.

One of the key benefits with working with an agency is we are able to tap into such a rich and wide pool of talent within their teams, and have so many eyes on each campaign at any given time to really optimize performance. Our ads really started to perform much better once we made the necessary investment into SEO optimization on our site. This has really aided conversion and user experience.

Janelle Friedman Founder, Good Janes

We market on email, Facebook [and] Instagram, and the returns are outstanding. More and more customers are buying our products through digital advertising and referring Good Janes to their friends and relatives. During the pandemic, we have found that more and more people are shopping online. 

Andreas Flohr CEO, ATP Cosmetic GmbH and LIVV

At ATP Cosmetic, we do digital advertising for our pH Plex product line. With less than one year on the market, we are still learning and continuously improving our ROI. We believe this is one of the most cost-effective ways to promote our products and we plan to continue investing in digital advertising.

LOUIS MARTY Co-Founder, Merci Handy

We have tried everything, which is what makes the digital advertising world fantastic. We can test, retest and re-retest everything. For example, in the early days of Merci Handy, we tried a test ad to launch a new product, which helped us review everything on the product mix from price, to colors, visuals, etc. In the current climate, we measure ROI differently as it changes according to the pandemic and whether stores are open or closed. But, overall, we are super happy with the brand’s performance.

ALEXANDRA DJOUKANOV Brand Manager, Orpheus Skin

We’ve been doing digital marketing since day one. In the first months, we had key objectives: We focused on identifying our core target group and defining the Orpheus personas based on their different interests, social media behavior, shopping habits and beauty goals. One could look at the brand from different angles. Some are interested in the romantic story, others are attracted to clean, sustainable beauty and clinically proven formulas. 

We then focused our digital marketing efforts in finding the right mix of content creatives that demonstrate the uniqueness and versatility of our products as well as developing our social media channels. After the first three months following the launch, we had an idea of what worked best at every stage of the customer journey, and we were confident to move forward with a set of creatives and increased ad budget. 

For a new, small brand like ours, we’re taking it slowly. The most important thing for us is that we’re seeing a significant improvement in the metrics—better performance and conversion of our ads, optimized costs, a raise in the share of loyal customers. We must be doing it right!

Kevin Sharp CEO, Trilipiderm

Being the new guy here at Trilipid Research Institute or TRI as we call ourselves, it was a surprise to see how very low key our online presence was when I joined. That is perhaps a result of its founding in the isolated arid mountains and environs of Jackson Hole, Wyo.  Since inception, we focused on personalized sales in bricks-and-mortar retail, a one-to-one relationship with our retail partners and potential customers who enjoyed our generous sample packs, [and] quickly became friends and customers. Not terribly scalable, but we thrived with very loyal partners and clients. 

With all the events of 2020, our model had to rapidly change as retailers suffered so much. This year, we continue that pivot to digital and are scaling up our presence with a heavy investment in new video, fresh imaging and some just released campaigns that will challenge conventional thinking around regimen, ingredients and hydrating the skin naturally.

As far as metrics go, we had a 7% conversion rate overall via non-Amazon sales in 2020 and nearly 9% via Google search. 53% of customers place more than one order in a year. We love our customers and try to spoil them with generous loyalty rewards, free shipping with minimum spend and other goodies, so those metrics from 2020 are a sign we are moving in the right direction. 

Of the typical platforms our customers use, namely Instagram and Facebook, despite being science-based products that mimic the cell structure and all the nerdy cool science stuff, our Instagram vibe is pretty light and whimsical. We desire to strike a balance between being engaging and educating. Being born in nature and grown with science places us in an odd space as most brands typically embrace one or the other as their reason for being. We have work to do!

In the world of e-tailing [on] Amazon, our team works the magic of building campaigns that resonate not just with the buyer and our customer, but also with those darn ever-changing algorithms. Sales via Amazon were up 70%+ in 2020, and we are looking to 4X again this year.  The ACOS [average cost of sales] is less than 15%, yet our average margin on Amazon is less than we like. We expect tuning the model there will bring better results in 2021.

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