December 11, 2019: ColourPop drove more conversations than Kylie Cosmetics and KKW Beauty; TikTok releases TikTok 100; DTC brands rally around repeat purchasers; Snap, Inc. releases Snapchat Cameos; Facebook tests relationship between hiding likes and post volume;  Instagram tests ecommerce tools

Here’s what’s worth noting this week:

 

ColourPop Drove More Conversations Than Kylie Cosmetics and KKW Beauty

The Story

Despite not having a famous celebrity founder, ColourPop Cosmetics, funded by the same incubator that helped launch Kylie Cosmetics and KKW Beauty, earned more Likes and drove more conversations than any other brand in October. 

How? 

An always-on approach to influencer marketing, which we stan. By collaborating with influencers on an ongoing basis to promote limited-release products via giveaways and sweepstakes, the brand is able to resonate more with its followers and encourage engagement beyond just the “Like.” Additionally, the brand’s diverse partnerships make it particularly appealing and relatable to all customers. 

What about driving sales?

ColourPop credits its constant influencer collabs as a major contributor to its sales. As one of the first brands to commit to a “fast beauty” approach, ColourPop takes new products from concept to creation in as little as five days. Similarly, its influencer collabs follow the same battle rhythm, with two to three limited-edition launches released every month. In October, the brand partnered with beauty influencer Safiya Nygaard to co-create a lipstick collection that she promoted on social. Nygaard’s collection not only sold out within 24 hours, but also her post announcing products generated the most likes (900,000+) and impressions (3M+) of all posts that mentioned ColourPop, including the brand’s own. 

STC POV
Despite consumers growing savvier about influencer marketing, research shows that the majority of these collaborations still pay off. 52 percent of 13 to 37-year-olds in the U.S. say they’re more likely to purchase products recommended by their favorite online celebrities, and 56 percent of this cohort believes that influencer endorsements indicate that they truly like the brands featured.

Unlike KKW Beauty, Kylie Cosmetics, and other brands founded by and promoted by mega-influencers, ColourPop casts a wider, more diverse and inclusive net of influence. This approach to diversity and inclusion allows the brand to stand out from the “typical” Instagram shot, which, when considering the sheer number of beauty brands/products consumers see on Instagram daily, is a differentiator in and of itself. Additionally, as a result of the ongoing, frequent collaborations resulting in limited-edition products, the brand is able to move at the speed at which its products are released. 

 

TikTok Releases Year in Review Report Highlighting Top Content of 2019

The Story

TikTok has released the TikTok 100, a year-in-review list that names the top videos, genres, creators, and memes that shaped the fastest-growing platform of the past year. The list is calculated by incorporating views, likes, shares, and trends to highlight popular videos in topic areas such as beauty, style, sports, pets, and dance trends.

What’s the TLDR on the app’s most popular videos?

A science experiment by YouTube creator David Dobrik, a man doing surgery on a banana, and a #failed swimming pool stunt. Top memes on the app included #TikTokChecks, VSCO girls, and “walk a mile.” They’re worth the watch. 

Ok, so what’s next for TikTok?

Aside from the obvious (growth), Vanessa Pappas, TikTok’s General Manager of North America and Australia, says that the company is thinking long and hard about creator monetization. Pappas, who previously worked at YouTube, says she is keenly aware of the tensions that arise as a result of platforms not catering to creators’ abilities to make money on the platform (cough, cough, YouTube). 

What options for creator monetization does TikTok support?

TikTok is very much in an “exploratory phase” in evaluating different models of creator monetization. In addition to the ad revenue creators can earn on videos, the platform has also  rolled out its creator marketplace that connects creators with brands. In 2020, it’s likely that TikTok will continue to fine tune these efforts, especially as it continues testing social commerce links in videos and bios as additional ways for creators to monetize their efforts and, ultimately, keep them on the platform, stressing the importance of creators to platform ecosystems.  

STC POV

With TikTok democratizing the video content creation process by removing typical barriers to entry (i.e., video editing software, professional cameras, access to copyrighted songs), anyone can become a creator. As a result, we’re seeing the definition of a typical “creator” shift – especially on TikTok where creators are rewarded for embracing their less-than-perfect feeds. As Pappas stated, “We’re seeing this next generation of creators being born in ways we haven’t seen previously. What’s been interesting is that now anyone can become a creator. People are owning their voice, not having to express a polished version of themselves…TikTok is about being yourself… and this new generation of creators is really embracing that.” 

As TikTok continues to grow, and as TikTokers continue to rise to fame, their prowess and influence often times isn’t limited to TikTok alone. In fact, their fame often waterfalls across platforms and society as a whole, highlighting the platform’s true potential in transcending into mainstream culture and society at large. 

 

DTC Brands Rally Around Repeat Purchasers

The Story

For direct-to-consumer (DTC) brands, the cost to acquire new customers has continued to increase, especially on Facebook and Instagram. As a result, DTC brands are forced to shift away from a focus on first-time customers and cost-per-acquisition (CPA) metrics, and towards repeat purchasers and metrics that reflect the return-on-ad-spend (ROAS) needed for a business to actually scale. 

Refresh me on the situation.

With more and more brands entering the DTC space, advertising costs on Facebook and Instagram have skyrocketed, resulting in a much higher CPA. This, in turn, makes the brand’s ability to be profitable and scale nearly impossible to achieve when considering the much higher ROAS needed. 

What are leading DTC brands doing as a result?

Where a lot of DTC brands previously focused on first-time customers through acquisition, leading brands have found success by placing a higher emphasis on repeat purchases, specifically focusing on building brand loyalty and brand equity to drive customer retention and longevity. 

Do DTC brands still focus on first-time customers/acquisition? 

Yes. While the focus on first-time customers/acquisition hasn’t completely disappeared, leaders in the space have found success by creating bundles and types of products to increase the average order value, so that if they are still focused on CPA, the margins will still be there. Additionally, DTC brand leaders have turned their focus towards Snapchat, Pinterest, and YouTube, all of which have a much lower CPA than Facebook and Instagram. 

STC POV

The challenge for DTC brands is balancing direct response campaigns and acquisition marketing vs. brand marketing and loyalty. At the end of the day, what really makes one consumer prefer one DTC brand over another in the long-term? While factors such as price-point and quality can certainly play a role, more often than not those offers are not differentiated enough. Customer retention comes down to brand and loyalty. Brad Brinegar of Digiday put it best when he said, “The only way for a disruptor to win in the [DTC] clutter is to create a brand that stands above the product offering itself. A brand that… stands for the emotional reasons people come to the category in the first place.”

Additionally, if DTC brands have tapped out of their acquisition potential on Facebook and Instagram and are also facing increasing competition within those ecosystems, it becomes necessary for these brands to explore new channels to find new audiences. By partnering with influencers to create content and then amplifying that content via paid, brands can leverage influencers to drive reach and frequency in the long-term, as well as tap into new audiences that are otherwise undiscoverable simply via the brand’s owned accounts. 

 

New Snapchat Cameos Feature Allows Users To Insert Their Faces Into Videos

The Story

On December 8th, Snapchat announced “SnapchatCameos” a feature that enables users to take selfies that can be inserted into short video clips.

Continue… 

The new feature is an alternative to Bitmoji and will allow users to convey a reaction to a situation within Snapchat messages (i.e., a clip of someone eating a lot of food in response to making dinner plans). The feature is currently being tested in international markets and the feature is expected to roll out to all users in the U.S. on December 18.  

How does it work?

First, users start by taking a selfie that teaches Snapchat what you look like. Then, users can choose their body type – either male or female (noticeably there isn’t a non-binary or an androgynous option yet). Users will find Cameos in their keyboard where they can then superimpose their faces into one of 150 short looping video clips that Snapchat has created. 

Um… Is this a deep-fake?

A watered-down less creepy version – yes. 

STC POV 

As of October  2019, Snapchat has more than 300 million active users, making it the fifth most popular messaging app globally and the third most popular in the US. Cameo could help to keep users drawn to Snapchat messaging, which is critical, as that is the platform’s most popular and differentiated feature. Whereas Instagram and WhatsApp have already copied Stories (and have beaten Snap at its own game), this feature is a must-have to stay ahead in chat. That is, unless Snap gets accused of copying Chinese social app Zao, an app that lets users deep-fake their faces into videos. 

In addition to serving as a feature differentiator, Cameo could also help to bring in money for the app. Although Snap is starting to monetize a few of its messaging features (i.e., ads within social games), we could see Snap sell branded Cameo clips to brands, similar to how it gives brands the option to buy AR lenses. 

Facebook Wanted To Increase Post Volume and Removing Likes Was The Way There

The Story

Facebook is using Instagram to test its hypothesis that hiding Likes will lead to an increase in post volume. 

Tell me more.

While Facebook has claimed that the reasons for hiding likes on Instagram was to decrease bullying, protect its younger users, and eliminate the “pressure to be perfect” on the platform, newer reports indicate that Facebook’s motivation for initiating this change may have more to do with increasing post volume by taking the element of self-centeredness out of the posting equation. 

How so?

According to Facebook’s hypothesis, if people are less concerned with Likes, they’ll post more. Facebook and Instagram have noticed that, as the production value of posts increases and influencers have become more prevalent, users are more likely to archive or delete previous posts if they didn’t have many Likes. This affects the overall posting volume and, as a result, affects their bottom-line through their ability to sell and show ads. 

How are influencers affected?

Before Instagram began testing removing Likes, influencers benefited from “Like momentum,” which is when users Like a post because they see one of their friends Like it or because they see a high number of Likes on the post. This creates a mob mentality around Liking which benefits the influencer and their ability to market themselves to brands, as well as what they can charge for sponsored partnerships. 

STC POV

Regardless of Facebook/Instagram’s intention, the hypothesis sounds about right. Facebook (and by association, Instagram) is going to take whatever means necessary to maintain and increase its bottom-line. If more posts equates to more money, and removing Likes is the way there, then don’t hold your breath on Likes returning any time soon. 

The removal of Likes puts more pressure on influencers and marketers to generate creative content that genuinely engages people. This, however, is not a bad thing – this is a challenge that will ultimately benefit brands, influencers, platforms, and users. Like any other industry, as external factors shift, brands executing influencer marketing strategies will be forced to come up with innovative solutions that overcome them. 

For more on how this shift affects the industry, check out our blog post and guide on the implications of Instagram removing Likes.

Instagram Selects Publishers Like GroupNine And Bon Appétit To Test Shopping Tool

The Story

Instagram has invited select publishers to test Instagram Shopping. Before, the tool was only available to large brands and influencers such as Nike and Negin Mirsalehi. 

Can you give me a refresher on Instagram Shopping?

Sure. Instagram Shopping has a couple of layers. First, is the ability to upload a product catalog and tag products within a post, which then directs customers to the brand’s site, enabling them to complete their purchases off of the app. A second facet enables customers to check out via Instagram’s checkout tool, making the entire buyer journey take place on the app. Lastly, brands can complete a “handshake” with an influencer, which will enable them to tag the brand’s products in a sponsored influencer post. 

Ok, thanks, back to publishers getting access to it… 

Instagram is expanding access to its shop tools, which is enabling publishers like GroupNine, Condé Nast, and Highsnobiety to combine their larger followings and growing e-commerce operations. So far, brands and influencers have seen success by integrating with Instagram Shopping. For example, GroupNine’s direct-to-consumer brand, Sock Club, has seen almost half of the site traffic for the socks come from Instagram.

STC POV

Will Instagram Shopping bring a new revenue stream to publishers? While it may be too soon to tell, the feature is continuing to connect the value between Instagram engagement and revenue driven, as well as the power of social commerce As seen with Bon Appétit, every post relating to its merch has included shoppable links which, not only proves adoption of the tool but also, its continued ability to convert sales.

Also as we move into 2020, influencers and publishers alike may start demanding new commerce features such as affiliate links and expanded access to product-tagged sponsored posts to make purchasing easier on Instagram.

 

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