75% of Estée Lauder’s Marketing Budget Is Going to Digital—and Influencers

This statistic was revealed by president and CEO Fabrizio Freda in Estée Lauder’s second-quarter earnings call this week, saying that the vast majority of its marketing dollars were going to digital nowadays, with influencer marketing being the primary beneficiary of that investment.

“Over time we have invested much more in advertising, and now I would say that every one of our brands has some investment depending on where they are,” said Freda. “These investments are mainly now in digital. Seventy-five percent of our investment now are in digital, social media influencers, and they’re revealing to be highly productive.”

Freda said that these investments in influencer marketing have paid off for Estée Lauder because it’s part of a greater strategic move toward putting marketing dollars into innovations and initiatives that prove effective when it comes to growth. Estée Lauder’s use of influencers are far-reaching, from signing big-name spokesmodels like Kendall Jenner and Karlie Kloss, to working with micro-influencers on YouTube and Instagram.

“They’re highly productive because we are doing a very good job in advertising, quality on asset, in targeting but frankly they’re very productive because we have learned much better how to focus our investment where there is growth,” he added. “When you expose your investment to growth, they have a much better rate of return. And that’s what is happening in this moment and that’s what we manage daily.”

That one of the world’s largest beauty companies—Estée Lauder owns nearly 30 skincare, hair and makeup brands, including Clinique, La Mer and Smashbox—is putting such a sizable investment in influencer marketing is a major sign of the growing acceptance of influencers in the marketing industry. Industry wide, marketers are spending $8.5 billion on influencer marketing, according to Mediakix. According to Statista, Estée Lauder spent over $900 million on influencer marketing in 2017 solely in the U.S.—a number that’s likely risen in the years since, given the company’s apparent commitment to influencers.

Overall, Estée Lauder reported positive results this quarter, with net sales of $14.86 billion, a 9% increase from last year’s net sales, which were $13.68 billion and net earnings rising from $1.11 billion at this time last year to $1.79 billion this year, according to the company.