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In less than a decade, Michelle Phan has become one of the most successful social media stars in the world (The Richest reports her net worth at $3 million) and used her influential status to create a beauty empire and launch a makeup subscription service (Ipsy) now valued at $800 million. For brands, replicating Phan’s success means first understanding how she leverages the attention of an influencer’s large audience and capitalizes on the unique relationships social media stars have with their followers, then emulating her strategy by partnering with digital stars to increase brand awareness, boost social visibility, and drive product sales.
Though Phan is now one of the most well-known beauty vloggers/YouTubers in the world, her path to success wasn’t an easy one. An article by Inc.’s Zoë Henry describes Phan’s tumultuous upbringing in a poor Vietnamese family and how, in grade school, Phan sold candy to her classmates in order to buy herself a computer. Later, after cultivating a small following by blogging on the then-popular website Xanga, Phan began publishing dog videos and makeup tutorials on YouTube, earning 5 cents per day through the platform’s new partner program.
Needless to say, the makeup tutorials received quite a lot of attention. Four years after she began sharing her beauty secrets with the world, Phan was able to launch her own business, Ipsy, by leveraging her reputation as a makeup and beauty expert and directing her devoted followers to sign up for the company’s $10 Glam Bags. Today, Ipsy has over 1.5 million monthly subscribers and is valued at $800 million (Fast Company).
While Phan’s status as a top social media influencer may have powered Ipsy’s growth early on, the brand’s creation of Ipsy Open Studios, a 10,000-square-foot state-of-the-art production studio in Santa Monica, California, suggests that Ipsy is now taking aim at a much larger audience than Phan’s 8.5 million YouTube subscribers.
To see how social media influencers can launch new brands, see our blog post here.
To promote the Ipsy brand and encourage audiences to sign up for Ipsy’s beauty subscription service, Phan and her team have partnered with an “extended family of online beauty influencers” who are granted access to the studio’s equipment, stylists, mentorship, and publicity in exchange for making Ipsy-related videos every few weeks; according to Fast Company’s Nicole LaPorte, this ever-growing team of vloggers generates 300 million social media impressions a month for the company.
The obvious takeaway for brands, of course, is that developing branded content and creating brand sponsorship opportunities with social media influencers—especially YouTubers, Instagrammers, Snapchatters, Viners, or bloggers that regularly communicate with their followers and have a reputation as an expert in a company’s particular field—is an extremely effective strategy for generating high levels of social media engagement, expanding the brand’s message to millions of interested consumers, and (perhaps most importantly) driving sales.
Perhaps less obviously, the success of Michelle Phan’s Ipsy and the creation of Ipsy Studios highlights a growing trend of marketing de-centralization and the democratization of information through social media channels and digital influencers. For modern tech-savvy companies (especially smaller brands that lack large advertising budgets), reaching customers by collaborating with social media stars is quickly becoming the “new normal” as audiences turn to platforms like YouTube, Instagram, and Snapchat for advice, tutorials, and recommendations about what products or services to purchase.