Learn from e.l.f. Beauty, Invest in Marketing

In a time when many brands are slashing their marketing budgets, e.l.f. Beauty stands out as an outlier. According to a survey by Gartner, marketer budgets have fallen to 7.7% of overall company revenue in 2024, down from an average of 11% over the four years preceding the pandemic. This decline represents a new low since 2021 and underscores a significant shift in how companies are approaching their marketing investments. Despite this trend, e.l.f. has taken a bold and contrary approach, significantly increasing its marketing spend to fuel growth and innovation.

E.l.f. Beauty: A Case Study in Marketing Magic

E.l.f. Beauty’s journey is a testament to the impact of dedicated marketing efforts. Over the past few years, the cosmetics company has ramped up its marketing investment from 7% of sales in 2019 to 25% in 2024. This substantial increase has coincided with remarkable business growth, including a 71% rise in net sales to $321 million in the fourth quarter of its fiscal year.

Why e.l.f.’s Marketing Strategy Works

1. Focus on High-Impact Platforms: E.l.f. has successfully leveraged popular platforms such as TikTok, Twitch, and Roblox, recognizing the value of meeting consumers where they are most engaged. Their marketing efforts on these platforms have opened new doors and captured new audiences, significantly enhancing brand visibility and engagement.

2. Bold Marketing Moves: The company’s willingness to take bold steps, such as running its first national Super Bowl ad (with Judge Judy and the cast of Suits!), has paid off. Such high-profile marketing initiatives not only increase brand awareness but also signal to consumers and competitors that e.l.f. is a serious player in the beauty industry.

3. Iterative Investment: E.l.f.’s marketing strategy relies on continuous evaluation and iteration. Starting with a small budget increase in 2019, the company observed exceptional results, which encouraged further investments. This approach ensures that marketing budgets are spent efficiently and effectively, driving consistent performance improvements.

4. Strong Product Offerings: No matter how good a marketing strategy is, it can only go so far if the products don’t meet consumer expectations. E.l.f. has consistently delivered high-quality cosmetics at affordable prices, ensuring that their marketing efforts lead to lasting customer relationships and loyalty.

5. Creative Collabs: The brand sought out unconventional partnerships with companies outside of their industry to set themselves apart from the competition and show off their personality and edge. Like this one, with marketing-darling water brand, Liquid Death.

Lessons for Other Brands

1. Investing in Marketing Pays Off: Clearly, increasing marketing investment can lead to significant sales growth. Brands should not shy away from allocating substantial portions of their budgets to marketing, especially when the data shows a positive return on investment.

2. Embrace Innovation and Risk-Taking: Trying new platforms, formats, and collaborations can yield impressive results. Brands should be open to experimenting with different marketing tactics and learning from their outcomes.

3. Continuous Evaluation and Adjustment: Marketing strategies should be dynamic, with budgets and tactics adjusted based on performance. This ensures that investments are always geared towards the most effective channels and methods.