? EXECUTIVE SUMMARYThe cosmetics industry is one of the most profitable and fast-growing industries that is slowly finding a huge market in e-commerce. The global market is estimated to be around 6.5 billion and growth 6.4% annually. The segment is separated into many categories such as- Skin Care, fragrances, makeup etc. Apart from overall sales, Online sales of cosmetics has risen by 20.7%. This rise in online shopping can be owed to the Millennial Generation and Generation Z. With the increase in use of mobile phones many marketers have resorted to mobile and display ads to capture its audience, as has the cosmetics industry. Consumers are becoming more aware of health issues and cosmetic products. The space that once was a very feminine centric market has now entered the male realm and many are as aware if not more of these products. Introduction of portable devices such as tablets and mobile phones have increased the amount of time spent on activities like on the fly shopping and other purchases. Mobile display ad views have now increased by up to 46% as compared to other forms of media. Along with the fore mentioned forms such as Display Ads and Native ads have now begun to replace banner and pop up ads. Companies are now looking at various market statistics and demographics to optimize online ad campaigns. The Cosmetic MarketThe global cosmetics market is one of the world’s most promising industries and remains buoyant. (loreal annual report, 2018) In 2016 it was estimated at a total of 205 billion euros with a growth rate of +4.0%. (loreal annual report, 2018) According to Business Wire the global market is projected to reach $675 billion by 2020, while growing at a rate of +6.4%. There are five geographic zones. (loreal annual report, 2018) Asia, Pacific represents the strongest one with 36.9% of market share, followed by North America with 24.8%, Western Europe with 19.3%, Latin America with 10.2%, and Eastern Europe with 6.0%.(loreal annual report, 2018) The market can be divided into five different product categories – Skincare (36.3%); haircare (22.9%); make-up (18.2%); fragrances (12.0%) and hygiene products (10.5%).(loreal annual report, 2018) It is a very fragmented market with the main players L’Oréal, Unilever, Procter and Gamble, Estee Lauder and Shiseido. (loreal annual report, 2018) (loreal annual report, 2018)In the past years experts observed a strong acceleration of online sales with 20.7% growth in worldwide online sales. (statista, n.d.) Particularly, the make-up market is booming by driving the worldwide sales of the industry. (statista, n.d.) This development is due to upcoming trends and a shift in the lifestyle of Millennials and Generation Z. (statista, n.d.) In this regard, the make-up sector can be considered as the most dynamic category in all sectors. (statista, n.d.) Especially the category lipstick hits the headlines and is with about 14% growth the star in this segment. (kline, 2015) Over 1.5 billion lip make-up products are sold per year. (kline, 2015) For example, women in the US are amongst the top lip product users, ranging fromcolored lip bald to lip gloss and liquid lipstick. (kline, 2015) In contrast, Chinese women are amongst those with the strongest preference for natural colors such as beige and are more likely to buy discreet make-up. (kline, 2015)This make-up boom is driven by the selfie generation and fast-growing use of social media, which focuses on appearance, self-expression, and presentation. (Launch Metrics, 2016) The new generations are reinventing uses, giving trends their own spin and creating buzz for new looks. (Launch Metrics, 2016) The make-up consumer generations can be divided in Millennials, which are born between 1980 and 2000 and Generation Z born between 1995 and 2010. (LaunchMetrics,2016) These new generations have a significant beauty spending budget as shown in the statistic below. (loreal annual report, 2018)The following is the research of top three companies in cosmetics industry, how they are using google display advertisements to market their products.1. L’OREAL L’Oréal Paris is a beauty global brand, that offers a variety of products for women, men, and children of all ages and ethnicities. Its’ major products are hair color, cosmetics, hair care and skin care. This company is committed to technology, research, and product innovation. In relation to its’ corporate responsibility, L’Oréal has two programs: Women of worth (honors and awards women who are actively making a positive difference in their communities) and women in need (which aims to support women develop their self-esteem and teach job and independent living skills).L’Oréal has shown to be one of the most innovative brand in products, it is also continuously looking for new ways to communicate with its customers. Its web page is an easy and friendly journey, where customers can find complete information about their products and customize their searches. For example, if a customer is looking for a foundation, L’Oréal has the Tools and Consultations section, where customers give information about their physical characteristics to provide Loreal with specific information to be able to recommend the perfect product to their skin or hair conditions. By this L’Oréal not only customize their products but the customer experience by given the perfect options towards their own characteristics and offering. By the mobile app customers can virtually try on makeup. The app scans the customer face, examines more than sixty features, then displays a variety of products and shades that can be used to get different looks. Then the customers can choose their favorite look and order the products by just clicking a button.L’Oréal looks for customer satisfaction in each step of their customer journey. They understand that for a lot of consumers the customer journey starts online, so they pay attention on what they look for and watch. Also, Loreal’s real find what customers are more interested on and develop videos to teach women how to, for example, make up the eyes, using people from distinctive characteristics so everyone can be satisfied. Its’ web page is not only the way L’Oréal tries to communicate towards new and acquire customers. It uses an app, Email, Snapchat lens (June 2016), Google Ads, YouTube, Facebook, Twitter, Instagram, and TV ads, to mention some.In the same way that L’Oréal wants to be a pioneer on beauty products, it also wants to find the best way to communicate with them. On the last Canes Festival, one of the topics discussed was how difficult is to capture consumers attention in their mobile phones. Therefore, one of the main conclusions was that the companies should make short ads, with six second videos instead of the thirty second standard used before. For this reason, L’Oréal partner with Google to observe how this new short-term video would work in the consumer world. They started to work in it since June 2017, and Loreal called this partnership as “Media Bets”. Correspondingly, Loreal and Google identify that short videos would not be enough to take somebody attention, and they will have to work with some strategy to really make somebody watch the ad. To accomplish this goal, they decide that they would look in YouTube, Facebook, and different social media to identify the trends that are popular at that moment and using this information to make ad six second videos related to that topic or trend.L’Oréal Media Bets is being backed out of special budget designated to experimental ad initiatives out of the Marketing budget. Loreal idea is that if this advertisement ads work, they would use the same in TV, what would decrease their costs expenditure in this media.Additionally, L’Oréal made a study on the target audience of their videos and who tend to watch what. They divide the video in the three types 2. ESTEE LAUDEREstee Lauder is one of the global leaders in prestige beauty. (market wired, 2017) The brand is creating most innovative, sophisticated, high-performance skincare and makeup products and iconic fragrances by understanding their target customers (women’s) needs and desires. (market wired, 2017) Estee Lauder engages their customers touch points from instore to digital. (market wired, 2017) These relationships are increasing woman-to-woman point of view. (market wired, 2017) It collaborated with google to offer consumers a unique in-home beauty experience with Google assistant on Google Home, offering personalized skincare solutions and beauty techniques through voice-activation across Google. (market wired, 2017) It is also connecting customers with its mobile friendly application, “Estee Lauder nighttime expert” app through voice activation. (market wired, 2017) Its ad units are also displayed on Google display networks and on its website esteelauder.com and on supporting media which includes YouTube, Programmatic and search.Combining beauty expertise with Google’s technology enhanced customer experience, building on digital evolution with latest innovation for a better customer reach. (market wired, 2017) Through the collaboration with Google, El can reach customers not only offline and online but also into their home. (market wired, 2017) This is providing their customers more personalized experience with their products. (market wired, 2017) EL is continuously increasing its advertising and promotional campaigns budget for better exposure to its customers. (Morgan, 2015) Their products are advertised and marketed through various media, television, magazines and newspapers, digital avenues, and social media. (Morgan, 2015) It also markets through direct mail and photo displays at international airports and seeks editorial coverage for its brands. (Morgan, 2015) It engages customers with its promotional activities like gift-with-purchase, purchase-with-purchase and with in-store displays by rewarding their loyal customers and acquiring new customers. (Morgan, 2015) It collaborated with brick-and-mortar, online e-commerce, and m-commerce websites to offer their customers products to their preferences. (Morgan, 2015) EL has launched several marketing initiatives through social media on Facebook, Twitter, YouTube, Instagram. (Morgan, 2015) The “Instagirl” (Jenner Kendall) gathered 30 million fans for EL according to Bloomberg. (Morgan, 2015) It also developed mobile application, Clinique “Forecast” which provides weather information and skincare tips according to the weather conditions (Morgan, 2015). Clinique also opened a flagship store on Alibaba’s Tmall which is a b2c e-commerce platform in china to penetrate major Chinese cities. (Morgan, 2015)EL took an interactive approach to sell its eyeshadow makeup on YouTube through Google’s True View video ad format, which allowed user to watch according to their preferences by clicking on the display screen, which attracted 1.6 million views. (Lau, 2013) It also introduced True View ads for desktop and mobile in Hong Kong (In-search, In-Display, In-stream) which is auction based with cost per view (CPM) rather than cost per click. (Lau, 2013)But according to the report, comparing to the traditional pre-roll ads, True View contributed 40% less instances where the viewer stops watching a video entirely to avoid the ad. (Lau, 2013)3. AvonAvon is one of the leading producers and sellers of cosmetics, skin care and personal care products in North America. Avon boasts portfolios of many award-winning products. The company also has many sub brands that include ANEW, Skin So Soft, mark., etc. The company has been in the market segment for over a 130 year. Most of Avon’s ad campaigns focuses on empowerment of women.About marketing and advertising produces around $132 billion in sales annually. A large part of their budget is focused on retail and direct marketing channels.New Avon has become a separate entity of its own that is now the American division for Avon. The company traditionally embellished the antique image of the woman. Recent campaigns have been oriented more towards the new generation of women and the budget of media advertisement has increased.Avon’s “Boss life” campaign to empower women began to use mobile optimized ads for their 2016 black Friday sales in Brazil. This format was made for smartphones and as a form of pre-roll advertising. These campaigns target multiple platforms and many features such as snap chat filters and other digital components. This campaign was to test Native advertising in the market.The goals of this were as follows1. Redirect a large part of Avon’s sales to the online markets2. Adapt and use multiple digital display channels3. Reach women in Brazil during the Black Friday promotionsIn this they implemented both Native and Digital display ads to ensure brand presence through the entire customer journey.This saw an increase in the number of the Click Through Rate by 434% as compared to standard display ads and an 88% decrease in Cost Per Click. Although the number of visits created by standard display ads were around 54% the efficiency of the Native ads far surpassed the regular display ads.AnalysisImprovements in the lifestyles of Millennials is majorly affecting the cosmetics market. Consumers have now become more conscious regarding cosmetics. Beauty products play an important role in enhancing one’s inherent beauty and physical features. Men are also increasingly using beauty products in their daily routine. This increasing demand of cosmetic products has led to the growth of worldwide cosmetics market.The 1990s was an area of transformation for the cosmetics industry. Some major trends of today had their beginnings during that time. A turn in retail was also taking place, with cosmetic specialty stores popping up in all regions. Technology also changed the way and place people shopped for cosmetics. Mobile apps and social media quickly became part of the marketing mix. The beauty consumer’s path to purchase became unclear as offline and online shopping became more intertwined than ever before. Digital shopping has moved to a priority in strategy.Digital marketing trends are changing the way the cosmetics industry reaches and interacts with consumers. In these new, digital-first age consumers are increasingly inclined to shop for products online. Therefore, a strong digital marketing and PR strategy is crucial. Some major trends include curated social content, online virtual experiences and utilization of new channels and influencer colas. Consumer expectations are changing, and brands must respond to this to stay relevant. Smaller businesses and brands are benefitting from savvy digital marketing, and with increasing online purchases, heritage brands are losing their dominance. This proves the traditional buying journey for cosmetics has evolved. In the digital age, digital campaigns need to be at the heart of marketing strategies.Estee Lauder is updating its advertising strategy according to the trend and technology evolution. It is trying to reach its target customers through digital platforms which helps in customer retention and new customer acquisition. New Google’s technologies are playing a major role in engaging the customers with customization to provide a better customer experience. But through this research there are no metrics found to measure their journey in their advertisements. So, it is hard to find where EL stands in their customer journey.Avon is also targeting its new generation customers with its digital ads on Google platform and mobile devices.FindingsOverall, the cosmetics industry can be regarded as resistant to economic downturns, even about the Great Recession in 2008. Though consumers tend to be more price sensitive during those times, they do not stop spending money on cosmetic products. That’s the reason this business is booming in today’s environment of rising per capita incomes. There are many opportunities and many trends within the industry, that are driving growth and revenue:• Organic and sustainable, environmentally friendly produced products. This was a niche market in the past, but greater information availability and the benefits of organic products are driving growth.• Anti-aging products. The increasing aging or retired population usually has and is willing to spend money on cosmetic products preventing wrinkles and crinkles.• Products focused on babies and young children. This is related to the sustainable movement mentioned before. Particularly, young parents belonging to the Millennial generation are more likely to pay a premium price to take care about their children’s skin protection.• Men’s grooming. It is estimated that over 75% of men are not using facial skin care, however their interest in this sensitive topic is growing enormously. There are plenty of products available in the market so that there is a lot of potential for future innovations. • Most interesting part of the EL advertisements are, it is adapting to its customers preferences with the new technology. More targeted display marketing advertisements helps to increase awareness and sales along with adopting to the new technologies to engage and satisfy the target market with more personalization.• Avon is targeting customers through its mobile app and on Google display advertisements with the standard display advertising to reach its customers and encourage their purchase behavior.