For a year, Bobbi Brown’s YouTube channel muddled along, slowly gaining some 18,000 subscribers and around 2 million views. Then, the brand decided to rope in a few established online video personalities on I love makeup, a YouTube channel it produced with original content not solely dedicated to Bobbi Brown. In a day, the new channel’s subscribership nearly matched the total Bobbi Brown had spent a year building and quickly racked up more than 100,000 views, barreling toward its goal of at least 100 million views in 12 months.
Bobbi Brown is the latest beauty brand to discover the reality of the digital age for Millennial consumers: YouTube is the new word of mouth.
“It is peers talking to peers. I have a daughter, and she doesn’t like to be told what to do. She is her own editor,” says Maureen Case, president of Bobbi Brown. “YouTube allows women to pick and choose how they want to be entertained and informed.” Just like old-school word of mouth, the YouTube juggernaut doesn’t usually start with brands’ marketing efforts. It starts with women telling other women—in this case, YouTube personalities telling their audiences—their makeup tips and tricks, information that is summarily passed along to exponential numbers of women.
The statistics tell the story: According to data gathered by L2, while the top-10 branded YouTube channels in the beauty category, including Axe, Gillette and L’Oréal Paris, combined had nearly 173 million views as of September of this year, each of the top-five beauty vloggers dwarfed that figure on their own, and Michelle Phan, the queen of the beauty vlogosphere, had a whopping 686 million views.
Phan may be the biggest breakout YouTube star, but she isn’t alone. In the U.S., Blair Fowler, whose channel is Juicystar07, has 1,524,214 subscribers and 245,419,443 views, while Kandee Johnson has 1,650,445 subscribers and 212,096,465 views. In Hong Kong, Lindy Tsang, aka Bubzbeauty, has 2,263,309 subscribers and 308,289,757 views, and in Brazil, Bruna Santina, aka NiinaSecrets, has 328,966 subscribers and 32,768,076 views.
“Brands are being out-engaged by YouTube influencer content, and they are being completely out-produced by the influencer. These girls make excellent, authentic content,” says Stephanie Horbaczewski, president and chief executive officer of StyleHaul, a beauty and fashion multichannel network with 3,000 channels in 61 countries. “The space is growing so fast, there is so much opportunity, and video is becoming a massive part of communication for brands.”
YouTube’s reach is undeniable. The Google-owned company estimates that 1 billion unique visitors come to YouTube each month, watching 6 billion hours of video. A hundred hours of video are uploaded every minute. More video is put on YouTube daily than all three major U.S. networks broadcast in the last five years, and YouTube users are watching 50 million more hours a day on the platform today than they did a year ago. About one quarter of YouTube views are on mobile devices.
Moreover, L2 reports that while Facebook is the largest source of referral traffic to beauty brands’ Web sites, its influence is waning as YouTube’s is increasing.
“It is in our top-10 traffic generators and our top three for social media platforms. It is definitely growing,” says Bridget Dolan, vice president of digital marketing at Sephora.
Similarly, Tina Pozzi, director of social media at Urban Decay, reports, “Currently, Facebook is the number-one driver, but as users are searching beauty content more and more on YouTube, it is going to become more important.”
L’Oréal Paris was among the first to jump on board with YouTubers by developing Destination Beauty, which features aggregated beauty content, in 2010. Scores of others have since followed suit. Procter & Gamble–owned Frédéric Fekkai, for example, partnered with StyleHaul to have eight beauty YouTubers whip up celebrity looks using Fekkai products.
But it is L’Oréal’s luxury division that has moved the needle the furthest by signing on Phan to do videos with Lancôme way back in 2010. This year, the division took another exponential leap forward with the launch of Em Michelle Phan, a 250-stockeeping unit color cosmetics line that launched in September online and in its own boutique in New York City.
What makes the launch particularly interesting is that luxury brands, especially in fashion, have been reluctant to link with YouTubers. Lisa Filipelli, a director at the digital management firm Big Frame, says the difference between brands’ acceptance of vloggers and bloggers was especially blatant during New York Fashion Week. “There is not a single YouTuber in the front row at any show, but every blogger that is half the size of the YouTube people are all front row,” she laments.
She adds that luxury brands ignore YouTube stars at their peril. To make her case, she says a picture of designer Rebecca Minkoff and Ingrid Nilsen, who goes by Missglamorazzi on YouTube, taken during Fashion Week garnered 61,000 likes on Instagram, while a picture of Minkoff with fashion favorite Leandra Medine, aka the Man Repeller, got 2,100 likes on the same platform.
With a reach like that, the trend of signing a YouTube star as brand ambassador, as Lancôme did with Phan, is definitely on the rise. Such relationships, though, aren’t necessarily parallel to that of a traditional spokesperson and brand. How much control over the content of a video a brand should have has become a contentious question.
“We have definitely had experiences where they want you to run off a script,” says Stefanie Barton, one half of the popular YouTube sister duo, EleventhGorgeous. “We’ll say, ‘This isn’t the way we would do a video. This isn’t how our viewers would expect us to do it.’”
Dominic Smales, managing director of Gleam Digital Ltd., a firm that manages YouTubers, including the British makeup artist duo Pixiwoo, says, “They are trying to treat talent like it’s an advert: Can you say this and hold up the product at this point? The key is that you have to maintain trust.”
To have successful YouTube partnerships, Smales says brands have to learn “control has to be relinquished in exchange for credibility.” That means control over the script, as well as the brands and products featured in videos. Beauty brands are going to be lumped with competitors in videos. When it comes to brands and YouTubers, Filipelli says, “Every contract that we do is non-exclusive.”
With Phan, Lancôme learned early on that loosening the reins has benefits. “As a marketer, you always want to control the brand. You want the product to stand straight. You want it perfectly clean,” says Denée Pearson, vice president of marketing at L’Oréal Luxe. “One of the things that we had to do was let go of that. Michelle would use product and it would be messy and the applicators would be used, but it was authentic and it was why her community loved her. They felt Michelle was one of them.”
In terms of compensation, industry sources estimate that YouTubers with decent subscription bases will receive around 10 cents a view. Once they reach 1 million subscribers, the rate is said to range from $10,000 to $25,000 per video. (One YouTube talent manager grumbles that beauty brands often lowball YouTube stars, recalling a laughable offer of $500 to have products placed in a high-profile YouTuber’s video.)
The number of views a sponsored video should hit is a component of deals between brands and YouTubers, as are click-through rates. One source estimates that a YouTuber with some 400,000 subscribers could achieve 70,000 to 150,000 views for a video. Somewhere between 2 to 5 percent is considered a good click-through rate, but multichannel networks have maintained they have channels that can achieve 25 to 30 percent click-through rates.
As YouTubers professionalize and secure managers and agents, their rates are increasing. “There isn’t a perfect model for partnerships right now,” says Dolan. She speculates the answer could be “an affiliate program or some sort of in-between technology solution that would help retailers and brands connect with video gurus who are in the right category and have the passion and interest in those brands and can connect with them in a way that is financially viable.”
YouTube does have annotation tools that enable e-commerce, but YouTubers haven’t adopted affiliate links to reward them with commissions on sales originating on YouTube to the extent bloggers have. Going forward, shoppable videos might play a role in reducing the friction between brands and YouTubers.
TREsemmé is testing a channel gadget that is designed to connect YouTube viewers with retailers that carry products that are in videos they are watching. But Sephora’s Dolan warns it has been a challenge making shoppable videos that “aren’t too intrusive or clumsy.”
Already, brands and retailers are keenly aware that YouTube is revolutionizing shopping dynamics. “The way that Millennials shop that is unique [to them] is that they start at YouTube to figure out trends and how to demystify looks and recreate them,” says Dolan, “where the typical woman would either start where she already wants to shop, like Sephora, or at Google.”
Research put together for YouTube by Compete shows that 18- to 34-year-olds are more than twice as likely than older age groups to rely on videos to decide which companies to purchase from. Because Millennial customers watch videos before they shop, they may be extremely educated when they enter stores and brands have to adjust to their level of knowledge. “Younger women would come to the counter and say, ‘Michelle [Phan] created the midnight kiss look. Can you show us the product that she used?’ We had to educate our beauty advisers about Michelle’s videos,” says Pearson.
At NYX, chief executive officer Scott Friedman recollects that a few years ago YouTubers began mentioning the brand’s jumbo eye pencil in videos, and NYX quickly ran through the 9,000 units it had in the warehouse. That product has become a bestseller with hundreds of thousands of units being purchased. “Because the beauty vloggers talk about NYX, this will be the fourth year now where our compound annual growth rate is approximately 50 percent,” says Friedman.
Maureen Mullen, head of research at L2, contends that YouTube-watching usually doesn’t lead to sales right away, but she says, “that effect further down the purchase funnel is definitely there.” She elaborates, “If you can get a consumer to watch a 3-minute video, a Google study shows they are 40 percent more likely to go in store and look for your brand.”
Many luxury brands have been hesitant to tap into YouTube, partly because both the stars and audience tend to skew younger and prefer affordable products befitting their tight budgets. Samantha Chapman, one of the two sisters who are known as Pixiwoo, underscores that Pixiwoo does pay attention to price when picking brands to put into its videos. “It definitely plays a part. The most important thing is that the brand is relatable just like we are,” she says. That doesn’t mean Pixiwoo avoids expensive products completely. Nicola Haste, the other half of the duo, says, “If we use an expensive premium brand in our videos, then we will also use products that aren’t so expensive so there is a broad spectrum.”
Carol Hamilton, president of L’Oréal Luxe USA, compares luxury brands’ participation in YouTube to their participation in e-commerce, predicting that the initial hesitancy will recede. “I don’t think you can say that YouTube is a mass-only channel. It would be too limiting to look at it that way,” she says. “We know that the more income the luxury consumer makes, the more engaged she is in digital and social platforms.”
When luxury brands do head to YouTube, they have typically produced their own content to make sure the quality is up to their standards. Giorgio Armani Beauty is adopting that strategy. For the launch of Rouge Ecstasy this fall, the brand released a video spotlighting women’s mouths beatboxing and wearing the lipstick. It had drawn 1 million views at the end of September, and the goal is for it to get 2 million views in the U.S. (The actual beatboxer used by Giorgio Armani in the video is YouTube sensation Felix Zenger, whose channel has more than 36 million views.) “We wanted high engagement and high stopping power within the digital sphere with a video that was exciting enough for people to forward to all of their friends,” says Doreen Arbel, vice president of marketing for Giorgio Armani.
Giorgio Armani Beauty’s video—and most videos from luxury brands—looks great on a full-size computer screen. But more and more, brands should be thinking their content is going to be viewed and shared on mobile devices. Suzie Reider, director of media solutions at YouTube, says, “Imagine a world where half, 60 or 70 percent of all videos, are watched on smartphones and other mobile devices. What that means is that the commercial opportunity needs to move into that video.” As that state of affairs dawns, Reider notes: “Accept the reality that you cannot continue to market as you did five years ago because people are consuming entertainment media in radically different places.”
Not only are they consuming media in radically different places, they are doing so in more places. Because of the proliferation of screens, YouTubers are popping up everywhere from TV to print to their traditional online wheelhouse. EleventhGorgeous, for instance, was in US Weekly ads featuring Wal-Mart and Cover Girl. A non-beauty YouTuber, Joe Penna, whose YouTube channel is MysteryGuitarMan, has been in TV commercials for McDonald’s and Coca-Cola. “That was really effective because he has a global audience and, if you are not in one of the territories where the commercial was playing, you still got to see it if you were a MysteryGuitarMan fan,” says Filipelli.
The multiscreen approach also enhances consumers’ ability to recall brands. A Nielsen study commissioned by Google found that people viewing only a TV ad for a car remembered the brand of the car 50 percent of the time, while a group that saw the ad on TV, computers, smartphones and tablets remembered the brand 74 percent of the time.
Will the power of YouTube be enough to create a new category of brand superstars, as L’Oréal is looking to do with Phan? Only time will tell—thus far, YouTubers don’t have great track records as brands. (YouTube beauty aficionado Lauren Luke’s namesake brand was in and out of Sephora faster than you can wave a mascara wand.) But while there may not be a flood of Phans strong enough to carry a brand, they are undoubtably becoming a new class of celebrity in the beauty category. “I don’t think there is a likelihood that that many influencers will become that, but they are becoming mini brands as human beings,” says Horbaczewski. “The next movement that we are seeing is leveraging these people as their spokespeople. The connection between the consumer and the celebrity isn’t what it used to be when you were exposed only to celebrity through traditional media. These women are going to be the new spokespeople for the brands.”
Talk The Tube: A Glossary of YouTube Terms and Acronyms
50 Random Facts About Me
A YouTube video that gives the audience insights into a YouTuber’s life by him or her running through 50 random facts about himself or herself.
Average video views.
Shortened, trackable URLs.
A video focused on a specific challenge. The objective of a cinnamon challenge video, for example, is to watch people trying to swallow a spoonful of cinnamon in under 60 seconds without drinking anything. A chubby bunny challenge involves putting as many marshmallows in one’s mouth as possible.
A collection of videos uploaded by a particular YouTube content creator.
Cost per action. An advertiser pays when the desired action has occurred.
Cost per mille or cost per thousand views. On YouTube, CPM is discussed when brands are paying for ads on the network and also when YouTubers are being compensated as part of YouTube’s partnership program. Estimates of YouTube CPMs range widely with most between 25 cents and $9.
Call to action. Call-to-action overlays appear when a video begins and can be closed by the viewers. They share information about the content of videos. When viewers click on the call-to-action overlays, they are directed to external Web sites.
Click-through rate. A good click-through rate on YouTube is 2 to 5 percent, but multi-channel networks claim some channels will achieve 25 to 30 percent click-through rates.
Draw My Life
YouTubers literally sketching out their lives in videos.
A video showing merchandise purchased during a shopping trip. Recently, searching for “clothing haul 2013” and “makeup haul 2013” has been rampant on YouTube. At one point this year, those searches rose by more than 1,000 percent.
A homepage masthead allows an advertiser to take over the YouTube homepage for a day.
Finishing a makeup product.
Annotations allow text and links, including to external retailers, to be layered on top of YouTube videos. YouTube’s shoppable video annotation is a channel gadget that allows viewers to move from watching how-to videos to finding retailers that carry products shown, check availability, compare prices and make a purchase.
MCN or Multichannel Network
An entity affiliated with multiple YouTube channels that works with those channels on their programming, funding, promotional activity, brand partnerships, ad sales and audience development in exchange for a percentage of the channels’ ad revenues.
Outfit of the day or offer of the day.
A collection of videos that can be viewed sequentially and shared with other YouTube users.
A video concentrating on one subject. For example, a video called “Getting Ready Tag” is all about getting ready, while “Favorite Things Tag” runs through a YouTubers’ must-haves.
A video ad format used by YouTube that gives viewers control over which ads they watch. They can, for example, skip an ad after five seconds. TrueView ads are in-stream, in-slate, in-search and in-display. Marketers pay for TrueView ads only when viewers watch ads and not by impression.
Channel Changers: 5 Key Points
Millennials Heart YouTube Stars: For many Millennial shoppers, YouTube stars and videos are more credible—and more engaging—than the online efforts of mainstream brands.
Noteworthy Numbers: A superstar YouTuber like Michelle Phan has racked up more than 600 million views, while the platform’s rising stars have often reached half that number.
Letting Go: When it comes to relationships between brands and YouTubers, creative control is a contentious issue. Those with experience recommend relinquishing control for credibility.
Teacher’s Pet: Millennials are watching YouTube before they shop, using information gleaned from videos to guide their in-store shopping trips.
Sizing Down: As with all things digital, YouTube’s audience is increasingly viewing content on mobile devices—a key factor for producers to take into account.
— Asahi Sasaki
Here, a list of the rising global YouTube beauty stars.
Star Power: Tokyo native Sasaki was never formally trained in makeup. She studied to be a dental hygienist and started her YouTube career by making short films with her friends. She found herself gravitating toward makeup tutorials and decided to segue into her own channel dedicated to beauty. Sasaki likes to use affordable products in her videos, which often feature extreme beauty looks such as anime makeup.
Star Power: Kim, a Korean American living in Southern California, is a classically trained ballerina with a passion for fashion and beauty. She embraces natural beauty and likes to share tips for flawless no-makeup makeup. In her videos, Kim often uses Korean brands and recreates the looks
of Korean celebrities. She is popular in both Asia and in the U.S.
Star Power: Tsang created her first YouTube video, a montage of her and others dancing, when she was living in the U.K. in 2007. She now lives in Hong Kong, where she runs Bubzbeauty, the second YouTube channel in the fashion and beauty space to surpass one million subscribers. Tsang has launched a clothing line called Bubbi Clothing and a makeup brush line called Bubbi Brushes.
Star Power: Santina is a 19-year-old from São Paulo best known for her hair and makeup tutorials. Last month, L’Oréal announced it was launching a beauty channel in Brazil and Santina was one of the vloggers the brand chose to participate in the channel.
Channel: Dia de Beauté
Star Power: São Paulo-based Ceridono has been a beauty editor at Vogue Brazil since 2010. In 2007, she started her blog, Dia de Beauté, before branching out to YouTube a year later. In her videos, Ceridono tries to create simple and approachable looks that her audience can replicate at home. She also reviews products and shares new launches—Marc Jacobs beauty line being among the latest—in her videos.
Star Power: Coelho was born in Minas Gerais, Brazil, and moved to the U.S. when she was 14. Coelho has both Portuguese and English YouTube channels, and a blog called SuperVaidosa, or SuperVain. Coelho is working on an accessory line in partnership with Ludora, and in the past has worked with such brands as Smashbox, Marc Anthony and L’Oréal.
Star Power: Salazar works as a makeup artist for a television station in Porto Alegre, Rio Grande do Sul in Brazil. She is author of the book De bem com o espelho or “In peace with the mirror.” On her YouTube channel, she is known for creating dramatic eye looks. She also has a clothing line called Canela & Mel, which means Cinnamon & Honey in English.
Star Power: Petit created the blog Petiscos in 2007 and launched Petiscostv on YouTube two years later. She regularly posts videos that instruct viewers on how to recreate celebrity looks and runway trends. Due to the success of her videos, Petit was hired by the TV channel GNT to host a beauty and fashion show called “Base Aliada,” and she has also cohosted “Vamos Combinar,” a makeover show on the same channel.
Star Power: Bankson, a model from San Francisco who launched on YouTube in 2007, has severe acne and started uploading videos to talk about her condition in order to help other teens with acne. A before-and-after video revealing Bankson’s face with and without makeup has attracted more than 20 million views and an enormous amount of media attention, including appearances on “Good Morning America” and “The Today Show.”
Stefanie and Tracy Barton
Star Power: Tracy discovered YouTube makeup tutorials looking for tips for a Halloween costume in 2008. A few months later, she uploaded her first video introducing herself and showing what was in her purse. Her sister Stefanie followed suit. In 2011, the Bartons, who are based in Tuscaloosa, Ala., left their full-time jobs to concentrate their energies on YouTube. They’ve been featured twice in ads placed in US Weekly for Cover Girl and Wal-Mart.
Star Power: Lynn is a makeup artist and member of the U.S. Air Force who was deployed to Iraq. Lynn started watching YouTube for relief during a difficult time in her personal life, and then began making her own videos in order to vent. She recently won the NYX Face Awards and is now an ambassador for the brand. Lynn is from Louisiana and currently lives in California.
Star Power: Mota, who is originally from Northern California, created her YouTube channel in 2009. Her videos span a variety of topics from beauty to fashion to home decorating. She has worked with a number of media outlets and brands, including Forever 21, Teen Vogue, J.C. Penney, Columbia Records and Seventeen magazine. Recently, she has appeared on AwesomenessTV, an online network targeting teens and tweens with original music, fashion, sports, comedy and reality content, hosting a daily teen talk show, “IMO,” and her own makeover series called “Make Me Over.”
Star Power: Nilsen has been making YouTube videos for six years. She is known for Glam It Yourself (or GIY) videos that teach viewers how to make beauty and fashion items, like hair masks and wrap bracelets, at home. During New York Fashion Week, Nilsen created videos for TREsemmé and blogged for Sexy Hair. She has also worked with Bauble Bar, BH cosmetics and NuMe hair care.
Star Power: Before Westbrook was on YouTube, she freelanced as a makeup artist, stylist and image consultant. In her videos, Westbrook frequently spotlights affordable beauty products found at drugstores. Compared to most YouTubers, Westbrook speaks to a mature audience that includes women in their 20s, 30s and 40s. She recently guest-starred on an episode of “Brides of Beverly Hills” on TLC and won runner-up in Allure’s 2013 Beauty Blogger of the Year Contest.
Samantha Chapman and Nicola Haste
Star Power: Sisters Chapman and Haste, who live in Norwich, England, were long-time makeup artists before becoming popular YouTubers. Chapman started making videos in October of 2008; today she has a line of brushes with Real Techniques that is sold at Boots and Ulta, and is being tested at Wal-Mart. Pixiwoo also puts out a digital publication called Two Magazine.
Star Power: A mother and professional makeup artist based in London, Eldridge has worked on numerous magazine covers and high-profile names—Clémence Poésy, Georgia May Jagger and Rosie Huntington-Whiteley among them—and often shows her viewers how to get the looks she gives celebrities. Until recently, Eldridge was Boots No. 7’s creative director, but, for her videos, she maintains she doesn’t accept sponsorships.
Star Power: A makeup artist with some 15 years of experience, Goss’ makeup videos are heavy on instruction. If viewers want to learn how to master foundation or make pores disappear, he is their man. Goss has launched a namesake makeup brush collection.
Star Power: Swedish-born Jaffrey’s mother encouraged her to check out beauty tutorials on YouTube, and Jaffrey got hooked. She started doing her own videos in 2011. Although most of her videos center on beauty, Jaffrey believes strongly in sticking to a healthy lifestyle and makes videos in which she gives health and nutrition advice. She recently moved from New York to London, and has partnered with brands such as Nine West, Rent the Runway and TREsemmé.
Star Power: Sugg, who is from Wiltshire, England, started Zoella, a nickname of hers, as a beauty, fashion and lifestyle blog in 2009 and expanded to YouTube, where her first video featured things in her bedroom and had music, but no talking. She was lauded by Cosmopolitan UK as the best established beauty blogger in 2011 and the best beauty vlogger in 2012.