YouTube marketing pioneer BH Cosmetics named to the Inc 500, proving the power of online brand building

YouTube marketing pioneer BH Cosmetics named to the Inc 500, proving the power of online brand building

BY MICHAEL CARNEY 
ON SEPTEMBER 3, 2013

Nearly every brand and aspiring self promoter has a YouTube channel today that they use to “engage” with their fans. But this was hardly the case in 2009 when BH Cosmetics launched their first video content marketing initiative in 2009. At the time, BH founder Fred Sadovskiy, a former ad agency owner, was well ahead of his time. This foresight enabled the founders to build a massively popular online-only cosmetics brand without ever raising a dollar of outside financing. Last week, BH was named to the Inc 500 list (No. 448) as one of the fastest-growing private companies in America, a feat that Sadovskiy attributes largely to the more than 200,000 videos his company his published and the more than 100 million total video views they have amassed over the last four years.“We give much of the credit to our products’ high visibility via social media, where beauty influencers have been demonstrating their high quality, affordability and ease of use directly to our target market,” Sadovskiy

BH Cosmetics is an edgy, value-driven brand that competes in the 13 to 25 year old demographic with the likes of MAC cosmetics. The company also has a loyal following among professional makeup artists. Its product catalog ranges from the large palette of colorful eye shadows that started it all, to lip colors, other eye makeup, bronzers, blushers, and accessories.

It wasn’t just the use of YouTube as a marketing channel that was unique in BH’s early days, but also the company decision to use stars endemic to the platform. Rather than going outside of YouTube to hire traditional celebrities or even actors to promote its brand, the company was one of the first to team up with early “YouTube stars” to make videos that would tap into their existing audience.

The company’s video content provides education and instruction on the best ways to use its products, while also positively associating the brand with up and these online celebrities. Today there’s an entire industry built around selling cosmetic, fashion, cooking products, and other lifestyle goods toaudiences on YouTube through the use of these “gurus.”

“No matter how many brands and competitors there are out there – and of course there are many – the advantage for us is that we’re really creatives,” Sadovskiy says. “For example, we just launched a new line that is theme based. We have one that’s California colors and another that is our Brazil pallette. We’re putting a story together with our product.”

But this early success on YouTube doesn’t mean that’s where the brand will stay digital forever. Sadovskiy is eyeing brick-and-mortar shelves as the next frontier in BH Cosmetics’ maturation. There is nothing written in stone today, but the founder claims that his company is in talks with several national retailers about distribution deals that could launch as early as Q4 of this year. BH wouldn’t be the first digital native brand to move offline into the world of tradition retail. Bonobos and Warby Parker are two of the most notable examples of this increasingly popular “omni-channel” trend.

If brands have learned anything over the last decade, it should be that the marketing strategy that sets you apart from your competitors one day will be a part of everyone’s playbook the next. BH Cosmetics jumped out to an early lead among digital-first cosmetics brands. Now the company will need to demonstrate the same sort of innovative thinking to maintain that leading position.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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