• by Sarah Mahoney  @mahoney_sarah, December 21, 2015

A new ranking from L2 says that L’Oreal is acing the digital race, with its Urban Decay and Maybelline brands ranked No. 1 and 2 in its latest Digital IQ report. The flagship L’Oreal brand tied for third place with Lancome, also owned by L’Oreal.

L2 bases its beauty ranking on each brand’s website and e-commerce efforts (40%), digital marketing (25%), mobile and tablet (20%) and social media (15%). It says Benefit, owned by LVMH, ranked No. 5, followed by Clinique and MAC, both owned by Estee Lauder.

But despite the deftness displayed by many of the brands, the report says the real winner in digital beauty continues to be online retailers, with 70% of sales going through such retail sites as Amazon, Sephora or department stores. At L’Oreal, for example, three-quarters of online sales come from retailer sites. And Estee Lauder’s online sales are dwarfed by purchases made through such department store partners as Macy’s and Nordstrom. 

And it says the rift between retailers and brand sites is getting larger. And that means brands must achieve a tricky balancing act in their digital marketing, supplying plenty of content and connection about products, most of which will be purchased on another site. It also notes how competitive the beauty business is, with 40% of the brands on its index sold on all three “beauty behemoth” sites: Sephora, Macy’s and Nordstrom. Mobile’s impact is growing, with more than 50% of beauty keyword searches beginning on a mobile device.

L2 also takes a closer look at the social-media platforms with the biggest impact. Instagram has become both the coolest site, with engagement tripling in the past year, and also the most effective, with a correlation between engagement and offline success. And it’s key in reaching Millennials, the consulting group says. Estee Lauder posts featuring model Kendall Jenner, for example, spark 20 times the engagement level of its ads with other models.

YouTube continues to be the most meaningful platform for videos, however. And Twitter is losing ground, with its active user base dropping from 12% to 8% in the year.