Building a $100 Million Brand Without Spending a Dime on Advertising

In today’s typical business models, a corporation has to spend thousands, if not millions, of dollars on advertising just to begin to build a new brand or product.  In order to get the word out about a new and upcoming idea, most companies will immediately turn to traditional advertising industries such as television commercials, online advertisement agreements, or in person promotions.  While this strategy does have a significant success rate if the product is marketed correctly, it can set the company back financially before the first item in the product line is even sold.  A recently popular brand that has been acquired by makeup giant, L’Oreal, is breaking the foundation of this idea by nearing $100 million in sales without spending anything on advertisements.  This product line is named NYX and is an extremely popular line of professional makeup products.

NYX has gained its popularity within the beauty product market with the use of global internet connections through social media outlets and independent bloggers.  This innovative business plan strategically has cornered the market of internet video bloggers, otherwise known as vloggers, to advertise the product line for their viewers.  The largest website that features these vloggers is YouTube and those who sponsor NYX on their products post videos of them using the makeup.  This direct access to consumers through social media outlets garners millions of views for their products, thus creating a free marketing opportunity.  This idea could be applied many different ways and it is interesting to see such a large company find a way around losing money through advertising.

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Sources:

http://adage.com/article/cmo-strategy/nyx-beat-acquirer-l-oreal-s-flagship-brand-youtube/293833/

4 thoughts on “Building a $100 Million Brand Without Spending a Dime on Advertising

  1. This article caught my attention because I am fascinated by marketing and advertising. In my own personal experience of watching Youtube videos, I have seen an immense amount of advertising for companies on people’s channels. NYX’s approach is different and I am not surprised that it works. It also very cheap compared to traditional ads. Nowadays, their advertising is streamlined to be very discrete to ordinary viewers. The most popular vloggers have millions of viewers.

    In the article i listed below, the Advertising Standards Authority (ASA) makes video-makers note if they are advertising a product or now. However, as an ordinary viewer, we are interested in personal gain and pay no sense to that. I do find it as an innovative way to advertise and let the vlogger do all the work. All it takes is sending the product, maybe send extra for giveaways, and/or a promo code. All in all, I think that it’s a very powerful technique in advertising but it raises questions to how well a vlogger can advertise the product. Thanks for sharing!

    http://www.telegraph.co.uk/news/uknews/law-and-order/11255077/Hidden-advertising-by-vloggers-under-the-spotlight.html

  2. To ad to that, NXY has been approached by L’oreal.
    “L’Oreal has worked hard in recent years to boost its digital and social-media presence, but its proposed acquisition of NYX Cosmetics gives it a foothold on YouTube bigger in some ways than what it’s been able to build on its own.”
    It will be interesting to see how becoming apart of a bigger makeup company, will effect both on a business level.

    http://adage.com/article/cmo-strategy/nyx-beat-acquirer-l-oreal-s-flagship-brand-youtube/293833/

  3. NYX has definitely set an example for the makeup industry. By shifting their focus, having Youtube spokespersons show consumers how to get the look, they have established a stronger connection with their audience. Rather than using models to depict looks that are often photoshopped and unattainable in commercials/prints, NYX has chosen women their young viewers can relate to. Granted NXY has spent little on traditional advertising, but this does not completely account for their wild, sweeping popularity. The affordability of their product plays a large role. Especially among the target audience: young girls who don’t have the money to spend on top designer brands. Not to mention, NYX has proved that they have a product that works. Most cheap makeup (especially shadows) performs as it is advertised, cheaply. However, NYX has figured out how to make an affordable option that maintains those strong pigments we’ve come to expect from our makeup products.
    NXY’s campaign has been successful not only because of their social manipulation, but because they have tailored their product to meet their consumer’s needs.

  4. This was extremely fascinating to read. With millions of people using the internet each day, it is very easy for a person or company to reach a huge audience. When a company is using the internet to advertise, the costs are staggering. If a company was able to reach millions of people without spending a single dollar, then that company is already ahead of the game. Their sales would be enormous because the wouldn’t have to spend anything on advertising. This business model is new and takes advantage of the internet. The company essentially has the vloggers doing all the work for them while they make the money. This goes to show how powerful your voice is on the internet if enough people care to share.

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