A boom year for Australian ad bookings, direct selling - votes of confidence in Avon and Mary Kay, Drew Barrymore's Flower brand heading to Australia, and celebrity rush - Zendaya, Crystal Renn and Michael Buble.
A boom year for Australian ad bookings
Media agency bookings surged 4.5 percent in 2015 - up $338.6 million for the calendar year - to an ad spend of $7.924 billion reports Standard Media Index (SMI). Television is still the major recipient of ad dollars in Australia - 40 per cent. But with movies such as Star Wars: The Force Awakens and Jurassic World posting huge box office takings, cinema ad bookings increased by a massive 37.2 per cent last year.
Digital continued its strong momentum with ad bookings up 20.3 per cent, followed by outdoor (+16.2 per cent ) and radio (+7.8 percent). Print media was again the Cinderella with double digit drops in ad spending - newspapers down 16.4 per cent and magazines down 14.5 per cent.
With Australians buying over one million new vehicles a year, spending on car ads increased by $36.9 million. Food/dairy/produce saw the second largest upswing of $19.4 million, followed by speciality retail - up $17.8 million. By contrast, government advertising dropped by $20.8 million, followed by local banks which tightened their belts to the tune of $11.9 million on the previous year.
Direct selling - Votes of confidence in Avon and Mary Kay
The direct selling of cosmetics remains a strong force with the two market leaders - and - accounting for combined worldwide sales in excess of US$9 billion. As we reported recently, Avon sold a majority stake in its North American business to Cerberus Capital for US$605 million. The company recently denied it was exiting China - one per cent of global sales - but has announced it is looking at all alternatives for the Chinese business. Last week Avon also revealed plans for a cost-cutting drive of US$350 million over the next three years, sending share prices rocketing 13 per cent.
The strategy was prompted by Cerberus declaring that "significant operation efficiencies had been identified". A mark of confidence in the struggling giant as the private equity company moves to acquire a 16.6 per cent stake in Avon in a bid to boost its fortunes. "We see value in the brand that isn't reflected in the stock market" said Steven Mayer, Cerberus Senior Managing Director.
Mary Kay's future is hinging on the youth market. Nearly 50 percent of the company's 325,000 new recruits in the US in 2015 were aged between 18 and 34. Ethnic diversity is also on the upswing. Minorities now account for 33 per cent of Mary Kay's US sales force and last year 51 per cent of new sign-ups were Latina, Asian or African-American.
The record result marked the 15th consecutive year the direct seller has attracted more than 300,000 women in the US to start a Mary Kay business. "Our unparalleled business opportunity appeals to a wide range of ages and backgrounds, and Millennials bring a unique set of talents and expectations" says Sara Friedman, vice president of US Marketing for Mary Kay. "These young women are tech-savvy and digitally connected. They're looking for flexibility and not a 9 to 5, one-size-fits-all position. A Mary Kay business can be customised to each person's individual goals and our company's established social media presence and leading edge digital technology have also proven to be attractive business building tools".
Drew Barrymore's Flower brand heading to Australia
Over the past few years, many celebs have launched make-up and skincare brands rather than fragrances, including Iman, Salma Hayek, Gwyneth Paltrow and Drew Barrymore. The 40 year old actress debuted her Flower Beauty brand exclusively in Walmart in the US nearly three years ago and the agreement is set to expire soon. Barrymore is talking to distributors in Australia, China, South America and the UK to further grow the brand and she also plans to launch an e-commerce business.
In a rare note of candour, Barrymore spoke for many brands dealing with major retailers. "Walmart has been a great partner, but at the end of the day, it is business. It is not friendship. They will drop us like a hot potato if we are not doing well". Manufactured by the Maesa Group, makers of European brand P2 and private label cosmetics for fashion retailers such as Zara, Forever 21, Marks & Spencer and Accessorize, the Flower Beauty lineup includes make-up for eyes, lips and face, brushes and fragrances. Maesa plan to double its global sales from US$175 million a year to US$350 million over the next four years.
Celebrity rush - Zendaya, Crystal Renn and Michael Buble
The new year has seen a flood of new celebrity signings and the pace intensified last week. With Coty poised to revive the fortunes of COVERGIRL following the P&G buyout, the brand is still chasing the youth market with the appointment of Zendaya Coleman. The first commercial starring the 19 year old will air during the telecast of the Grammys on February 12th. The singer/actress/stylista famed for speaking out about photo-shopping and body image will be the face of the iconic Clean lineup and debut a new collection including LashBlast Plumpify mascara, TruNaked eyeshadow palette and Oh Sugar Lip Balm.
Hair is one of the first parts of the body to show signs of ageing. By the late 20s, most women have experienced thinning strands and the first greys. Probably one of the main reasons 29 year old Crystal Renn has been tapped as the face of Redken Chromatics Ultra Rich hair colour. The author of Hungry: A Young Model's Appetite, Ambition and the Ultimate Embrace of Curves also has a strong appeal to women of all ages because of her well-publicised battle with her weight.
Australia will be one of the first five global markets to launch Michael Buble's first fragrance in June. The Canadian crooner has teamed with Fragrance Dynamics, who worked on the One Direction and Cristiano Ronaldo Legacy celeb fragrances. A feminine fragrance aimed at Buble's core fan base - women aged 25 to 50 - the fruity/floral juice is an EDP with heart notes of rose, peony, wild jasmine and lily of the valley.
Snippets from the wires
- The popularity of cosmetic tattooing comes and goes depending on new advances in technology. Right now it's on a roll says Dr Charles Zwerling, founder and chairman of the American Academy of Micropigmentation. The number of practitioners in the US and internationally is growing at the rate of 10 per cent a year. Post medical procedures such as nipple and areola tattooing and scar revision are on the rise. But the most common area for the ink is the eyebrows - about 90 per cent - followed by eyeliner and lips.
- Caitlyn Jenner and the movie The Danish Girl have shifted transgender issues into the mainstream. CKOne was the most successful unisex fragrance ever and Coty are launching CK2 as the first gender-free scent. In the US, Ariana Grande and her brother Frankie have already debuted a limited edition gender-free fragrance just in time for Valentine's Day. Called Frankie, the fruity/floral follows Ariana's debut juice last September.
- Unilever may be anticipating a tougher 2016 but turnover spiked 10 per cent in 2015 to 53.3 billion euros ( AUD$82.19 billion).
- The number of Chinese tourists to Australia has passed the one million mark and nationals of the country where shopping is a true addiction now contribute $7.7 billion to the Australian economy. According to the Australian Financial Review, the influx will further cement Melbourne's ranking as the nation's fashion capital with 18 luxury brands setting up shop this year, including Miu Miu, Carolina Herrera, Cole Haan and Missoni.
- We're making healthier food choices. Australia has the largest area of organic farmland in the world - more than 22 million hectares. The organic farming industry is expected to grow by this year says IBISWorld to $733.8 million. According to analyst Spencer Little, the two major supermarkets, Woolworths and Coles, now stock greater amounts and wider ranges of organic produce, making the purchase of organic products more convenient.
