For Digitally Native Hero Cosmetics, TikTok Is More Useful (and Cheaper) Than Instagram

But CPM rates on the platform are high

Image of someone holding Mighty Patches from Hero Cosmetics
Hero Cosmetics wants to reach 4 million users on TikTok.
Hero Cosmetics

As back-to-school season continues in full force, Hero Cosmetics, a digitally native brand that sells acne patches, is rolling out a new campaign on Gen Z’s favorite platform: TikTok.

To bring the campaign, dubbed “Get Ready With Me,” to life, Hero Cosmetics worked with about 23 TikTok creators to release short videos, with the hashtag #schoolsurvivalkit, from Aug. 19 to Sept. 19. The creators, some with more than 70 million followers, are offering viewers with a .edu email address a 15% coupon code discount to a Mighty Patch, the company’s signature product. For Hero Cosmetics, it’s yet another opportunity for the company to tap into TikTok as an acquisition channel after first launching a brand awareness campaign on the platform a few months ago—and at a cheaper rate than Instagram.

“We’re seeing a lot of just lower cost opportunity with creators on TikTok,” said Ju Rhyu, co-founder and CEO of Hero Cosmetics. “They’re just really creative, everything with music—it’s a different type of content. It’s more engaging in that way versus Instagram [where] the content isn’t as unique on Instagram.”

So far, three creators have uploaded videos, which have amassed over 141,000 views; Hero Cosmetics is estimating to reach 4 million users with this campaign. The company’s previous campaign, which celebrated the Mighty Patch arriving in 1,500 Target stores last month, saw a 12% engagement rate compared to 4.49% on Instagram Stories. Though Hero Cosmetics couldn’t directly attribute all sales at Target to the campaign, Rhyu said there’s definitely a correlation and that the company’s current sales are outpacing its set goals by twice as much.

hero cosmetics tiktok

Now, with Coresight Research estimating 28.3% of back-to-school spend is expected to occur online (a 2.2% increase from 2018) Hero Cosmetics is doubling down on TikTok with more sales and revenue-driven KPIs, such as cost per acquisition as opposed to brand awareness. Rhyu said the brand chose to work with TikTok influencers, as their rates are much cheaper than Instagram influencers—some TikTok creators charge only $200 for a post that would cost more on Instagram to work with an influencer who had the same amount of followers.

It’s also cheaper to work with creators on TikTok versus running paid media on the platform, Rhyu said, due to its CPM rates for video units, which are $10—making it twice as expensive as Instagram’s paid media rates. So, if Hero Cosmetics wanted to reach 4 million viewers with this campaign, it would’ve cost $40,000 on TikTok compared to $20,000 on Instagram. In Facebook’s second-quarter earnings report, the company stated the average price per ad went down by 4%, while number of ad impressions grew by 33%. Facebook further attributed the impression growth to ads on Instagram stories, Instagram feed and the news feed on Facebook.

“From an influencer standpoint, TikTok is definitely much more cost effective,” Rhyu said.

TikTok’s rise both as a social media and advertising channel is gaining traction with larger brands. Grocery giant Kroger is testing out a new shoppable offering on TikTok, while other brands like Macy’s, Chipotle and Uniqlo are also trying out hashtag challenges. Recently, Hollister ran in-feed video ads on the app.

For Hero Cosmetics, creating another sales channel for the company is part of the brand’s ethos and bootstrapped mission. The company first launched in September 2017 on Amazon, and then quickly entered Anthropologie stores in 2018, followed by the entry into Target last month. While most digitally native brands try to stay away from Amazon to avoid the ecommerce platform cannibalizing the business or creating a private-label brand from the sales data, Rhyu said Amazon was the best place to test out whether the company’s products were a good market fit. Rhyu said Amazon brought the brand sales and helped turn the company’s inventory “into revenue pretty quickly and very efficiently.”

“By now, everyone assumes that most Americans have an Amazon account and will buy on Amazon,” Rhyu said.

And while Rhyu said the brand’s faced counterfeit issues and does wonder if the ecommerce giant will release its own private-label brand, she’s not totally turned off by Amazon as a sales channel. But, the company did decide to get into brick-and-mortar retail stores early because it was another channel—and there’s no place easier to get a product for a pimple emergency than in-store—even if Amazon does offer free two-day shipping.  As it stands right now, the company’s sales are about 60% from Amazon and 30% from in-store retail.

“We are trying to diversify our channels and we’re not so heavily reliant on Amazon,” Rhyu said.

With additional reporting from Kelsey Sutton.

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