• by Larissa Faw , February 8, 2021

Women not having to put on makeup for work and spray themselves with perfume for date night amid continued social distancing will restrain the recovery in beauty and personal luxury advertising, according to a new report from Zenith.

Beauty ad spend will rise by 1.7% to total $7.5 billion across 11 key markets this year, before reaching $7.7 billion in 2022, up 2.6%. That growth will fall short of the estimated 4.5% increase for the ad market as a whole.

Hair care and skin care will lead this slow recovery, though overall demand for beauty will not change much as consumers remain reluctant to return to their pre-pandemic habits.

According to Zenith, most beauty and personal luxury brands will not raise budgets substantially, and will be more likely to redeploy spending from underperforming channels instead.

Traditional media still dominates this category. Beauty and personal luxury brands spend much more of their budgets on magazines and TV than the average brand. Last year beauty brands spent 18.3% of their budgets on magazine advertising, 4.3 times more than the average brand, and 42.2% on television, 1.6 times more than average.

But these media are becoming less effective as their reach continues to decline and the scarcity of their audiences pushes up prices. Zenith predicts beauty and personal luxury ad spend will decrease 1.2% a year for TV and 12.4% a year for magazines.

At the same time, these brands have been relatively slow to adopt digital advertising, spending 34.1% of their budgets digitally in 2020, compared to 53.1% for the market as a whole. This is a result of the historic lack of premium digital environments that support the high-quality brand imagery that beauty and personal luxury brands need to convey, per Zenith.

Still, the beauty category increased its spending on digital advertising 2.8% in 2020, twice the 1.4% growth rate of digital advertising across all categories, as beauty and personal luxury brands began to compensate for previous underinvestment. Zenith then forecasts average growth of 5.9% a year in digital advertising between 2019 and 2022.

“Growth in beauty and personal luxury advertising will lag behind the market while consumers remain cautious about travelling in public and meeting in person,” said Jonathan Barnard, head of forecasting, Zenith. “But by investing in digital technology that embeds ecommerce into the heart of their operations, brands will prime themselves for more rapid growth when demand picks up.”

Zenith expects France to be the best-performing beauty ad market over the next two years, growing by 13.3% a year on average. That’s a reaction to the depth of its decline in 2020, when beauty brands cut budgets dramatically at the beginning of the pandemic, leading to a 32.9% decline for the year as a whole.

India, by contrast, is forecast to grow as a result of strong consumer demand, with an average growth rate of 8.3%. Zenith predicts beauty and personal luxury ad spend in India to be 15.2% higher in 2022 than it was in 2019.

Demand will recover more slowly across North America and the rest of Western Europe, leading to annual growth in beauty ad spend of 1%-2% a year in Canada, Germany, Italy, Spain, the UK and the U.S.

The “Business Intelligence: Beauty and Personal Luxury” report covers Australia, Canada, France, Germany, India, Italy, Russia, Spain, Switzerland, the UK and the US, which between them account for 59% of total global ad spend. Beauty and personal luxury is defined as the combination of four sub-categories: cosmetics, fragrances, hair care and skin care.