Estée Lauder now spends a huge portion of its marketing budget on influencers

Estée Lauder now spends 75% of its marketing budget on influencers

The vast majority of Estée Lauder's digital marketing budget is now being siphoned towards influencers, according to president and chief executive Fabrizio Freda.

Speaking during the beauty giant's fourth quarter earnings call on Monday (19 August), Freda revealed that it has "invested much more" in marketing in the recent quarter, specifically digital, and called out how effective it had been globally.

"These investments are mainly now in digital," he explained. "75% of our investment now is in digital social media influencers and they're revealing to be highly productive."

Freda said influencer marketing spend was yielding fruit because Estée Lauder had not only improved the quality of its assets across its brands but also sharpened its targeting practices.

"Frankly [our advertising has been] very productive because we have learned... how to focus our investment where there is growth," he added, saying this had resulted in a "much better rate of return" for the business.

"Significant savings and efficiencies" in the group's selling model afforded it with an additional $380m to play with for the quarter, said Freda, with some of these savings earmarked to fuel growth in digital advertising, social media, and influencer outreach budgets.

The business — which owns around 30 brands on top of its flagship range, including Bumble & Bumble, Clinique, La Mer and Mac — doesn't break down its marketing spend. However, figures from 2015 pitted its budget as $2.77bn globally, and it's believed to still be in the billions range.

As well as working with micro-influencers, the group pays a number of high-profile ambassadors to promote its products globally, including Karlie Kloss who has been the face of the Estée Lauder brand since 2018.

The reveal that it's ploughing a significant chunk of its marketing spend into influencer campaigns comes as the channel faces ongoing scrutiny from marketers over its efficacy and transparency. Despite these ongoing concerns over issues like follower fraud and measurement, however, influencer spend is on the up overall – with the US and Canada noting an 83% bump in influencer investment this quarter alone.

For Estée Lauder's part, it has recently been on the hunt for a marketer to take control of its influencer spend as global director of influencer marketing and customer engagement.

According to a job listing posted in May, this remit included "accelerating the influencer marketing practice across the portfolio of prestige beauty brands". It was also looking for the new hire to develop a framework for distribution of influencer content across paid, owned and earned outlets to "yield sufficient levels of exposure to desired audiences and quality engagements".

Overall, the business noted a sales bump of 9% to reach $3.59bn in the fourth quarter of 2018. Sales for the full year clocked in at $14.86bn, again up 9% from $13.68bn in 2017.

Freda put the growth down to its skincare offering, travel retail, e-commerce and a sales boost in every market in the APAC region.

He said: "Our results were particularly impressive given macro volatility and challenges in several key markets demonstrating our successful strategy of multiple engines of growth and our agility to reallocate resources to the best opportunities."

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