Celeb brands are winning without spending on ads
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Range Media Partners CEO Peter Micelli and actress-entrepreneur Gabrielle Union speak at an Axios event in Cannes. Photo: Nicolas Gavet on behalf of Axios
From Beast Industries to Bravo to the "Bring It On" fandom, celebrity and creator-led brands are cash cows.
Why it matters: Many of them attribute the lack of marketing spend as a reason for their business success.
Driving the news: In a conversation with Axios alongside Cannes Lions, Beast Industries CEO Jeffrey Housenbold said he was working with Jimmy Donaldson to build the "Gen Z and Gen Alpha version of Disney, a diversified media and entertainment, consumer products and services company" with an IPO on the horizon.
- Understanding how to tap into virality is a major advantage, says Housenbold.
- "We create endemic, intrinsic, contextually relevant ads, and we build a platform that's bounded by data," he said.
- "We look at over 800 million data points a day. We know what's going viral. We know how to engineer virality across all the social platforms.…Our lifetime value to customer acquisition ratios are so different than the industry because we don't have to spend very much money on marketing, which allows us to plow our profits back into innovation, into lower price, into faster distribution, into collabs and new flavors," he added.
Zoom in: Loverboy, the spirits brand founded by Bravo star Kyle Cooke, benefits from a similar playbook, he told Axios.
- "We've grossed over $50 million having not spent $1 on [marketing]. When you think about what brands, particularly in alcohol, spend, one of the biggest line budgets is advertising, and so to kind of think about things differently and launch brands digitally first, or in collaboration with someone who has a platform, it's kind of a game changer."
- Amanda Batula said her self-named swim line also spent very little on marketing given that the concept for the product was launched on the Bravo show "Summer House."
- "Everyone was highly anticipating this [swimwear launch]. Our third drop just sold out, which is what you hope for. We had to up our orders because everything sold out so fast the first time," she said.
Yes, but: For these ventures and brand partnerships to be successful, Housenbold, Gabrielle Union, Cooke and Batula all say authenticity is key.
- "I wanted to build a brand that actually reflected my morals, my values, and that contributes to my peace," Union told Axios alongside Cannes Lions.
- "For me, corporate values are huge. I do background checks on everybody. I'm not going to sign up for something because you've given me the whole song and dance. I need to know who's running the show. I look at board of directors. I look at the company makeup.… You have to walk it like you talk it," she added.
- Plus, it's about knowing who your audience is and activating them, said Hiltzik Strategies CEO Matthew Hiltzik.
By the numbers: 4 in 10 say they are "die-hard" or "avid" fans of celebrities or influencers, according to a recent Morning Consult survey.
- Roughly half of those surveyed say they are willing to make purchases based on the recommendations or involvement of their favorite public figures.
- And Gen Z and millennial consumers are the most likely to vote with their wallet.
What to watch: The talent to content to commerce business model is one that more public figures are looking to tap into — and Peter Micelli said he launched management company Range Media Partners to solve for this.
- "For us, it was, how do we restore equity positions and opportunities for talented people that have community and the trust of audiences? And the data we look at is that celebrities that are authentic can have more impact on moving community than the corporation does. So as we're doing content plays, we're also looking at the broader business plays and how to build communities who are eager to be consumers," he said.
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