If the only thing constant is change, social media has caused that change to happen at warp speed — and companies that ride it rather than resist it are poised to win.
Ipsy, digital influencer-centered beauty subscription box company and event business that held its first Generation Beauty gathering in San Francisco last weekend, is one such company that has embraced flux. With three of its so-called stylists, Katy DeGroot or LustreLux, Desi Perkins and Christina Cagle, aka Chrisspy, on the way out, it’s already reloaded its talent network that curates boxes and produces content for beauty brands with the rising influencers Gabriel Zamora and Madison Miller.
“We are investing majorly in helping them make amazing content and build their brands. They might go from an audience of 20,000 or 30,000 [YouTube] subscribers when they join Ipsy’s in-house program to the one million, two million that Desi, Katy and Chrisspy are at today. We spot who we think has potential early on and help them grow and, then, they remain friends with Ipsy. It’s a very amicable next step,” said Ipsy president Jennifer Goldfarb. “The idea is we then have the next generation that comes into the in-house platform, and we are going to focus on them being the next to get to one million, two million subscribers.”
Ipsy signs three- to five-year deals with the influencers it chooses to participate in its stylist program. There are 11 stylists in the program, but Spencer McClung, executive vice president of media and partnerships at Ipsy, projected that figure could climb to 13 or 14 in 2017. A source outside of Ipsy estimated the stylists receive payouts of 5 to 10 percent on the proceeds of the company’s glam boxes. Some 1.5 million subscribers receive those $10 boxes monthly, and they’ve driven more than $150 million in annual revenues at Ipsy, which reports it’s been profitable for more than three years.
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Ipsy scouts possible stylists through Open Studios, a division that Goldfarb and Spencer McClung, executive vice president of media and partnerships at Ipsy, chide is the company’s nonprofit arm. Open Studios has enlisted 10,000 digital content creators flocking to its tools and mobile apps, education offerings and studio access. “We make no money on it. There are no contracts, no signing for the creators and no fees,” Goldfarb said. “We use that as a system to understand who is watching whom, who is growing really quickly and resonating with their audience.”
The whole apparatus is assembled with an understanding influencers involved in it could eventually get too famous and too costly for Ipsy to be advantageous to them, at least in a similar vein to how it was advantageous when they had tiny followings. “The life cycle of creators as they grow and get bigger is that, obviously, a lot more opportunities come their way, and I think we’ve done a good job of balancing that with our creator system,” McClung said. “We invest lot of resources in them and, we know that they are going to get big and…have lots of opportunities outside of Ipsy. But that’s OK. We celebrate that. We love that. Part of our investment is knowing that there will be lots of other opportunities.”
The opportunities are indeed swelling for beauty influencers — and that means there is mounting competition for their time, social-media output and contracts. Brands like Tarte, Anastasia Beverly Hills, Benefit, Too Faced, NYX and BH Cosmetics have made them integral to marketing campaigns and often to product-development efforts, too. “When Ipsy launched, it was first to market in the sense that influencers weren’t getting paid by brands to create signature collections before Ipsy came along. Now, most influencers are doing their own deals, and they are not having to rely on Ipsy for payouts,” said Kenn Henman, founder and chief executive officer of uFluencer Group, a talent management and public relations firm specializing in YouTubers. “Based on the payouts Ipsy is offering, influencers are getting a lot more to do their own deals with brands.”
Within the Ipsy infrastructure, McClung outlined there is plenty of room for stylists to strike brand partnerships. “They can do lots of external brand deals. The way we see it is the more brand relationships that our in-house creators develop, the better it is for them, and the better it is for all of us,” he said. “We consider brands part of our community.” Perkins and Cagle linked with Quay Australia on sunglasses, and DeGroot, Cagle, Perkins and Christen Dominique, another Ipsy stylist, were featured in Benefit’s Brow Styles campaign with Sephora.
The terms of influencers’ deals with brands, though, are being modified as the power of influencers skyrockets. Christina Jones, an agent at APA Agency whose clients include Patrick Simondac and Manny Gutierrez, influencers better known as PatrickStarrr and Manny Mua, said digital personalities are aiming to secure increasingly longer-term deals. “Long-term relationships are the key to being organic and creating great campaigns,” she asserted. Gutierrez specified deals lasting at least six months are preferable. “Being almost like a brand ambassador is so much better than doing a one-off situation,” he said, chatting with WWD before he appeared with Simondac at Benefit’s Gen Beauty booth Saturday. “It is so obvious to the audience when you have one product in one tutorial, and you never use it again.”
The brass ring for many influencers is spearheading their own brand and, despite notable blunders in transitions from digital beauty content to physical beauty products, there are undoubtedly a slew of influencer-led brands coming. “I would love to have my own brand one day. It’s a goal of mine,” Gutierrez said. “The platform that I have is so great and such a blessing, why not amplify that?” Simondac chimed in, “I would love to a brand in my future, whether it is in cosmetics, fashion or lifestyle, something up that alley. But, as of now, my goal is just to grow. From our statistics online, we are popular in the U.S., the U.K. and Australia, but to [be popular] in Africa, Asia or the Middle East, that would be mean the world to me.”
Ipsy cofounder Michelle Phan’s brand Em Michelle Phan, which was introduced in 2013 with L’Oréal and taken more than two years later by Ipsy, is frequently cited as a case study for the failed promise of influencer brands, but McClung isn’t letting Em’s stumbles discourage him from touting the possibilities of successful brands from digital creators. “We haven’t done that yet, but we definitely want to,” he said, speaking of Ipsy stylists heading brands. “Launching beauty brands is a tough business, and it’s one where you have to be the at the right time, right place with the right brand for the right audience with the right messaging. People that love Desi and other creators love everything about them. That passion for the creator is unique to social, and it’s different from a traditional movie star. I think they’ve got a lot of ability to move the needle in launching their own brands.”