Lily (0:25)

Hello, and welcome back to the Bareface Podcast, a beauty business podcast hosted by me. My name is Lily12tree, and I'm a beauty marketer and data science student. In today's episode, we're going to do a deep dive into celebrity beauty brands. Seemingly every other week, for, like the better part of the last decade, a celebrity has launched a beauty brand. Just this year alone, we've gotten Beyonce's hair care line, Sacred. We got the Rock skincare line. We've got Blake Lively's hair care line. Rihanna launched her third fenty beauty brand, Fenty Hair. Bella Hadid launched Aura Bella Win Beauty by Serena Williams. 1111 Beauty by Paris Hilton was announced four days ago. Khloe Kardashian launched a fragrance line. Nicki Minaj launched Press on nails. All of that has happened in the celebrity space just this year. But somehow it has felt like the celebrity beauty craze has slowed down with this. Saturation has brought so many conversations about how consumers are sick of them. They're fed up with celebrity beauty brands. They hate them and celebr listening to the public, and they need to stop. But then these brands launch and they go on to be roaring commercial successes. Take Hayley Bieber's Road, for example. Rhode was met with considerable pushback from the public. Her comments were filled with people saying that she'd missed the celebrity wave and we were frustrated by another celebrity line. But now, in 2024, only two and a half years after launch, the brand is expecting to close out the year with US 100 million in revenue. Google searches for Rhodeskin are up 82% since last year. Her lip peptide treatments are a favorite of young girls on TikTok, so much so that one user actually framed the packaging to display in her bedroom. While the rise of these brands has been well reported, I want to run through how they are uniquely structured as businesses and compare that to what other beauty brands look like. And what I also aim to focus in on this episode is getting a capture of how these brands fit into the current zeitgeist. In 2024, nearly 2025, which will mark a decade since celebrity beauty brands became prolific, how has the perception of a celebrity founder changed? Why do some brands work? Why do others fail? We'll also look into some sentiment data that I ran on Reddit to figure out which of these celebrity brands are actually favored among consumers. Then ultimately, we'll use all of that to discuss what's next? What does this all mean for the future of celebrity brands? So today's episode is Going to be broken down into three parts. Firstly, why did beauty brands take Then how do consumers feel towards celebrity beauty brands in 2024? And then finally, why do some of these brands soar and others flop? Part 1 why did celebrity beauty brands take off? So let's first gauge an understanding of the types of celebrity beauty brand businesses. On one end of the spectrum, you have traditional celebrity endorsements. When you're scrolling on YouTube and you get an ad for the YSL Libre perfume and it's a video of Dua Lipa that a traditional endorsement, that celebrity gets paid a fee to be the face of the brand, which essentially means they are used in marketing material. Think celebrities faces on buses and on billboards. That is the most common way celebrities are involved with beauty. Those celebrities have zero involvement with anything to do with the company or the product. They don't input any way creatively. They don't try and test formulas and their personal brands are just used exclusively as leverage to sell that product. And their faces are used to help personify these luxury corporations. On the other end of the spectrum is independent entities where a celebrity will decide that they want to build a beauty brand and they'll do so from the ground up, just like anyone else, like you or me would if we decided to start a brand. Minus the fact that they obviously have access to significant startup capital without having to sell equity because they're rich and famous. And of course they also have access to their personal brands for marketing and advertisement purposes, the same way a big brand might pay for that access when they're used in traditional endorsements. A great example of an independent entity is Honest Companies by Jessica Alba. But when we think of celebrity brands in a modern context, it's not usually either of these first two options. It's instead a third variation that sits somewhere between traditional endorsement and an independent entity. And that is through partnering with an incubator. Beauty incubators are companies that have access to all of the things you need to start a brand. Ingredient suppliers, manufacturers, industry experts. And all of that would cost a celebrity significantly if they were to go the independent route. What these incubators do is they partner with celebrities and give them the creative freedom to create a brand. But then they take a percentage of that equity. What the celebrity then gets from that is access to all of the incredible industry resources that that incubator brings right out of the gate. Celebrity beauty brands took off because of incubators. Previously, launching a beauty brand was very costly as you were not only forced to go down the independ entity route. But you also had to get those products into store in order for customers to be able to try before they buy. But in the mid 2010s, we were amid the rise of the direct to consumer model and also the rise of E commerce. Brand after brand was having huge financial success through selling exclusively from their own online store. Not to mention the attraction that celebrities had to beauty specifically, as beauty products have exceedingly high profit margins compared to other industries. And if you don't venture into color cosmetics, at least in the very beginning, your product can in theory be sold to anyone. Beauty has no sizing. And while there are significant nuances and differences in skin types, hair patterns, sensitivities, and of course, skin tones, when first launching a brand, you're able to dodge having to offer any level of personalization in an attempt to gain initial momentum. Which is one of the reasons beauty has had so much growth in recent years, because it is just primed for the digital landscape. Consumers were now open to buying products that they had never seen in person. And beauty specifically shifted from being a competition of best formulation to a competition of best marketing strategies. The hardest thing for brands that were launching in the E. Comm and D2C rise was reach. It was getting in front of enough people and the right people that would want to purchase and trial that product. So for non celebrity beauty brands, often a lot of their initial spend would go to advertising costs. But who had immediate access to that reach and those customers? Celebrities. A goal of many big beauty brands is to sell the brand to a conglomerate where a founder is able to build something from the ground up and maintain equity so they can go on and sell a minority or majority stake and have a big payday. The incubator model rose from business execs realizing that is a heck of a lot cheaper to pay to start and grow a whole bunch of these companies at once in hopes that just one of them goes on to become a crazy big financial success that is cheaper than buying one once they have already reached that level of success. Beauty incubators helped everyone. They suited everyone. A celebrity founder was able to hang on to equity, growing their financial portfolio if the brand succeeded, which in turn was a benefit for the incubator. As the celebrity having skin in the game was hugely beneficial to their participation and subsequently their ability to move product. Instead of getting one off payment for a traditional endorsement, the celebrity was offered revenue share and was able to use their personal brand to grow something that benefited them in the long term. It was a pretty bulletproof formula until everyone was doing it Part 2 why celebrity brands Began to Crumble now that we understand the infrastructure behind these brands, we can take a look at how consumers feel objectively about some of these celebrity beauty brands in 2024 before working backwards to figure out how we got here. So it's well understood that the Fed up with Celebrity beauty brands Every media outlet on this full scale of the media spectrum seems to have reported this from The Guardian, the ABC, the New York Times, to Vogue, the Carton refinery. 29 but where I wanted to look was the place that consumers are actually expressing their personal frustrations. So I went to Reddit, where people are known for being especially cutthroat. I analyzed 5,000 comments that included the words celebrity, beauty and brand to find a 61.2% had a positive sentiment, 18% had a neutral sentiment and 20% had a negative sentiment. Initially this felt shocking to me. I just thought the sentiment was going to be overwhelmingly negative because that is what I've continually read and seen conversations about. What makes this far more interesting is how the sentiment has changed over time. Synesthesio, an AI enabled consumer intelligence company, track the online conversations about 53 brands in the US, UK and France. They collected over 1.5 million English mentions about celebrity makeup, skincare and hair care companies. They found that from June 2021 to August 2021, so just an eight week period, the negative sentiment related to celebrity beauty brands rose by roughly 600%. According to Niq, in 2021 there were 19 celebrity beauty brand launches and in 2022 there were 18. From memory, I feel like this spike in July was Road Skin by Hailey Bieber, Skin by Kim, a skincare line from Brad Pitt, a skincare line from Jared Leto, all get announced in the space of maybe seven to 10 days. So this massive spike in negative sentiment makes sense. People were just fed up. But what is really interesting is that huge spike in negative sentiment didn't dissipate in the year that followed. By May of 2022, the negative sentiment around these brands online found a new normal which was approximately 350% higher than before this spike. So why has this negative sentiment grown so significantly? The most obvious and a very sound explanation at that is the oversaturation with those initial barriers to entry being broken down by the rise of social media and then subsequently dtc, E Commerce, and then these incubators. Celebrity brands started to feel more like a traditional endorsement than a celebrity founder. As it became increasingly easy to launch beauty brands and the formula for Success was proven time and time again. The rate in which these brands were launching grew rapidly. When celebrity brands first launched, the celebrity was given a significant founder arc. In most cases these celebrities were female, so them starting brands was also given a bit of a feminist twist which really suited the girlboss movement that was running rampant it in the mid-2010s. But now as they've become so saturated, the public has shifted from seeing celebrity founders as business people and now just a celebrity that has made an obvious money making decision, much like accepting a traditional celebrity endorsement deal. It's generally believed in marketing that consumers trust people over corporations. But as more and more celebrities launch brands, we went from personifying them as individuals that had taken a leap of faith in starting a brand and and began to see celebrities as corporations themselves. Celebrities were essentially guaranteed early success as they had access to everything they needed to go to market. What wasn't guaranteed was brand loyalty and growth. This is where celebrity brands start to show their pitfalls, as not all celebrity beauty brands are made equal and more than that is that their success is very rarely correlated to the size of their stardom. It can be really hard to understand the perception of brands outside your own areas of celebrity interest. So I use Reddit again to look into the subreddit beautygurochatter to analyze not only the sentiment of 29 different celebrity beauty brands, but also the number of comments. I did this to be able to compare not only how the public feel towards these brands, but how much noise each of those brands is able to generate, because those two metrics obviously feed off of each other. There was a caveat though. I was only able to collect a maximum of 5,000 comments for each brand. So the biggest brands, Rare Beauty, Fenty Beauty, Kylie Cosmetics, et cetera, were not able to be measured for the size of the conversation, as they all had 5,000 comments. I visualized all the findings in a bubble graph which is over on Instagram. But the discrepancy between what I thought the perception was for some of these brands verse what people were expressing in the subreddit was huge. For example, JLo's JLo Beauty and Lady Gaga's Haus Labs had nearly the exact same sentiment and number of comments, which felt shocking to me because on my side of the Internet people love Haus Labs and people do not love JLo, let alone JLo Beauty, to which I hadn't heard anything about. And then of Rihanna's three Fenty Beauty lines, Fenty Hair had the highest positive sentiment, which was somewhat unsurprising. As the number of comments was low. But what shocked me was that Fenty Skin had a more positive sentiment than Fenty Beauty. Both Fenty Skin and Fenty Beauty had 5,000 comments analyzed, so I would predict that if I could take a larger sample it would eventually swing in the favor of Fenty Beauty. But I can only speculate. Other key takeaways was the negative sentiment around Kardashian brands, while Kylie Cosmetics had significantly more comments than Skin by Kim. Both brands were in the bottom in terms of sentiment. The celebrity brands with the lowest average sentiment was Pleasing by Harry Styles in last place and REM Beauty by Ariana Grande in second to last place. The overarching takeaway though, was that the celebrity is not the key Are you signed up to the Bareface newsletter? If you work in beauty, then I am sure you are very aware of the lack of data that is available in this industry. That was until Barefaced. Barefaced is a research and insight company that specializes in beauty. We help beauty brands utilize data to understand the ever changing beauty consumer and industry. This week's newsletter, for example, is a deep dive into the numbers behind the rise in men's beauty. While it's been reported that men are increasingly open to building skincare routines, the real trend is in the male adoption of cosmetic surgery. We look at the rise in hair transplants and veneers across both male celebrities and the general public to expose what this trend means for the future of men's beauty. If this is data that you're interested in getting your hands on, be sure to head to bareface.substack.com and sign up today. Part 3 why do some celebrity beauty brands soar and others flop? The celebrity is not actually the key to the celebrity brand's success. Look at Rihanna, for example. Fenty Beauty brings in at least 500 million in revenue a year, according to Pitchbook data. It did so well that she went on to launch Fenty Skin, which clearly performed well enough as this year. They then went on to launch Fenty Hair. So you might think Rihanna is the celebrity that can sell anything. She's the reason that the brands are so successful, but not quite. If we think back to when LVMH backed Rihanna and launched their first new luxury fashion house since 1987, making history by being the first luxury fashion house to be run by a black woman. Her launch collection was huge. I vividly remember seeing the content of the Runway everywhere, yet the brand was closed less than two years into its existence. What Rihanna's clothing line couldn't do, but her beauty line could was trend. Consumers are growing increasingly tired of influencer and celebrity dynamics. And platforms like TikTok are aiding that they no longer care about who is telling you about a product. They care about how many people are telling you about a product. Celebrity beauty brands are uniquely positioned because they have access to their audience to spark an initial momentum. But after that, beauty products have to grow into a trend that exists beyond their founder. The hope of any beauty brand is that brand loyalty will be driven by the quality of a product, but it's acquiring a customer that's the hard part. All brands, no matter the founder or the industry, are now chasing virality. The shift of social media platforms away from network based algorithms where your feed is made up of posts of the people that you follow and the posts that they choose to amplify, has meant that a brand's success is less dependent on community than it once was. For example, when you think about the success of Kylie cosmetics, it was very much about being in her community. You would follow her Snapchat and see teasers of lip colors and she would show you the behind the scenes of building the brand over on YouTube. That would all deepen the connection and loyalty you had to that brand. This community element is still alive and well today like we see on TikTok founder led content, really having a moment. People are less open to listening to the struggles of a founder when that founder already has access to multiple millions of dollars because they are a celebrity now. The success of a beauty brand is often more attached to a product going viral and the FOMO you feel about not having it. For example, if I just speak anecdotally for a second, I could not give a hoot that Hailey Bieber launched a skincare line. Her being behind the brand does close to nothing for me. But now I am desperate to try Rhode specifically their lip products because I cannot escape these things. So many people are being vocal about the love of these products that I now really just want to try it for myself. When celebrity brands first came onto the scene in the mid 2010s, the celebrity founder was enough. But in 2024, a celebrity founder is no longer a big enough marketing push to sustain a brand. With social media putting so many faces in front of us each day, and as more and more public figures come onto those platforms, a celebrity face doesn't grab your attention and up the noise of social media feeds. It's in many ways the same problem that magazines are having whereby they used to be the place you would go to for celebrity intel or high fashion Intel. But now you can get that insider knowledge just about anywhere so they can't compete. How both magazines and celebrity brands are starting to get around this though is through creative and in many cases editorial creative. If we look outside beauty to some of the biggest celebrity brands in the world. Skims, for example, has built a huge, huge portion of their brand around their ad strategy while they partner with celebrities for product launches. Much like legacy brands. Where skims is different is in their visual. Keindall Cunningham wrote a piece for Vox titled Are skim campaigns the new Vogue covers? The Internet loves Kim's shapewear company, but it loves its ads even more. And she explored exactly this. Skims don't just get Lana Del Rey as a celebrity endorsement, but they get Lana Del Rey in lacy sleepwear and have an arrow shooting through an apple on the top of her head. They don't just launch winter intimates, they do a 60s style cover shoot for an imaginary magazine. Another great example is Emma Chamberlain's Chamberlain Coffee. They don't just launch a novelty graham cracker coffee blend for fall. They call it the Chamberlain Circus and have Emma dress up as the circus showman and have a giant coffee bean as the circus animal. It's bloody bizarre, but attention grabbing if nothing else. Hailey's Bieber's Road takes a page out of Jacques Mousse and Loewe's books with her beauty products frequently being photographed as food in this editorial fashion style imagery. Celebrity brands at their core are lifestyle brands which are just premium versions of products that you can buy cheaper elsewhere. But what you're paying for is buying into that brand world. What the successful new celebrity brands are doing is building out those brand worlds by creating content that no one else can create because they don't have the level of cash to spend as we've it's really an antidote to the UGC content that we see so much of online where it's not everyday people using these brands. It's highly curated estimate to the evolving dynamics of consumer behavior, social media and the beauty industry itself. Incubator partnerships made launching a brand not only accessible but highly profitable for celebrities. However, the very saturation that fueled this trend has now led to its decline in favorability. As consumers now grow wary of this overabundance of celebrity driven products. The allure of the celebrity status alone is no longer sufficient. It's no longer about who is behind the brand, but rather how that brand connects to culture, trends and creativity. Today's most successful celebrity brands manage to transcend their founders, becoming viral products in their own right. This shift signals that the future of celebrity brands will depend less on star power and more on brand creativity to be able to stand out in a crowded market. Celebrity beauty brands are far from over, but as the industry matures, the way that these brands are built, marketed and perceived will continue to evolve. And that will be reflected not just in the zeitgeist of beauty, but of culture as a whole. But that brings us to the end of this episode. Thank you so much for making it to the end. If you have and spending your time with me. If you enjoyed today's episode, please be sure to give the podcast a follow and rate it. It really helps the pod find other listeners. If you want to chat about this episode, please feel free to reach out over on Instagram, airface Media and otherwise Aussie listeners. I'll see you next Monday and everyone else, I will see you next Sunday. This episode was recorded on Ghana Country. I acknowledge the traditional custodians of this land and pay my respects to elders past and present.