Even as many investors and customers are discovering that their pet unicorns are mythical, Kylie Jenner has laughed all the way to the bank with $ 600 million for a 51% stake in her 3 year old cosmetics company. Unlike all the new digital-enabled start-ups, hers was a 12-member team running a brick-and-mortar enterprise. The marketing on the other hand was driven by Kylie’s online mega brand.
If you think about it, lipsticks are an ideal product for the age of instant gratification.
Purchase cycles are ridiculously short, as is the need for replenishment. There’s low risk to trying a new product and a lipstick shows its benefit instantly. Linked with a celeb lookbook there’s no ambiguity even about what is the desired definition of beauty.
I came across a study today which says that 77% of digital marketers are measuring ROI within a month of running a campaign, even though half of them knew that the sales cycle was longer. Why would they do that? It’s possible that it gets really complicated to isolate the benefit of a particular marketing channel beyond that point. More likely is that the boss won’t wait longer than a month for results. Or worse, if we go with this doomsday piece announcing that the new dot com bubble is digital advertising it is because we have confused correlation with causality and are fishing in high propensity waters anyway. Whichever explanation you prefer it looks like the best digital campaigns are those that are expected to deliver within a month.
Another report I had reason to look at recently is the Edelman Trust Barometer. There’s a bunch of good data on the benefits of being a trusted brand. But then comes the helpful information that only 34% trust most of the brands they buy or use. I think this would be a factor of our involvement and the risk of a bad purchase. Like I might trust the eco-friendly detergent but since I can’t immediately see the impact of my switching to a generic (untrusted) brand I’m ok to do so. Likewise I might trust a particular mobile phone to be the coolest, but, since I can’t afford it, I’ll make do with a less trusted but significantly cheaper brand. Where I’m going with this is that in categories that are either low impact or where the impact will be seen beyond a few months, trust is not that important. (For example, you may not trust the air you breathe but since the negative effects are not felt immediately you don’t feel to the hills.) I’m not telling you not to work on trust – just that it’s importance may be overrated in your category.
Back to Kylie and the lipstick. A powerful brand ambassador coupled with a successful offline retail model reminds me of Ramdev. He too was a star (albeit TV, which is still big in India) and converted his ethos into marketable products. Some showed instant results and led to a very positive brand association His current troubles are to do with expansion and portfolio management, something he could have avoided by selling at the right time. My advice to all celebrities looking to monetize their brands is to get into something which has near instant gratification – I should look good or feel good as soon as I consume it.
In other interesting news, Fred W Smith the Founder of FedEx challenged the NY Times editor to a debate after he was unhappy with their story on how FedEx paid virtually no taxes last year. While his rebuttal seems thin on facts and strong on whataboutery, it is certainly a new tactic in corporate communications!