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Gummy vitamins broke the internet last weekend. The beauty supplements were at the center of the feud between beauty YouTubers Tati Westbrook and James Charles that captivated social media and made its way into the mainstream.
As people Googled “Who is James Charles” and tried to figure out why he was canceled, many stumbled upon something often viewed as a niche corner of the internet, but is actually a massive market.
YouTubers and influencers can make or break a brand, like Sugar Bear Hair, the company in the middle of the drama. According to data on Captiv8, the company has received tens of millions of likes on sponsored posts, and the company's highest engagement comes from its YouTube endorsements.
When Charles posted a sponsored Instagram story for Sugar Bear in April, which experts estimate the vitamin brand could pay six figures for, he wasn’t just slighting his mentor, he was potentially taking customers away from Westbrook’s burgeoning rival company, which could cost her millions. Friendship was at stake, but so was money.
But after all of this fighting, Sugar Bear reigns as the real winner of the feud, said Krishna Subramanian, the co-founder of Captiv8, a branded content platform that connects brands to creators and influencers.
“[Sugar Bear] has gotten so much recognition, and so much earned media, all from one Instagram story James Charles posted,” Subramanian told NBC News. It's hard to even quantify what the drama is worth, he added.
The influencer market is projected to be worth $50 billion by 2020, according to an analysis by Captiv8. A sizable chunk of this market comes from beauty YouTube — the world of Westbrook and Charles.
Beauty videos on YouTube get around 4.6 billion views every month and around 18 million beauty videos are uploaded to YouTube every year, according to TradeGecko.
Subramanian said this is largely because millennials and members of Generation Z don’t typically interact with the more traditional forms of internet advertising like banner ads. Instead, he said, they’re turning to influencers, often ones like Charles, who’ve built their own brands through YouTube.
“Influencers have a really strong emotional connection with their audience. That emotional connection drives their followers to go out and make purchases,” Subramanian said. “You don’t see that with traditional celebrities.”
YouTube gives influencers and personalities, often random people who just started making videos in their home, a platform to forge that emotional connection with viewers — and build trust.
Trust, Subramanian said, is a powerful marketing tool.
“A YouTube video isn’t just someone posting a photo,” Subramanian explained. “It’s a tutorial that is going to show you how to use a product, how to make it work on your skin tone, and why you should purchase it.”
TradeGecko says 37 percent of millennials said they’re “more likely to trust a brand” after seeing it repped by an influencer.
Rachel Seo, the director of social media at JUV Consulting, which specializes in marketing to Gen Z, said influencers and YouTubers are “not only misunderstood but also overlooked.”
Seo was raised on YouTube and not traditional television. To put into perspective the power of a YouTuber’s reach, she pointed to popular 1980s sitcom ‘Family Ties,’ which peaked at about 30 million viewers per episode. In contrast, Charles’ viral apology video to Westbrook posted Friday had 44 million views by Wednesday.
An average Charles video gets around 7 to 10 million views. At its height in 2013, Breaking Bad was getting 4.32 million views per episode.
“James Charles reaches more people than a traditional news network or a TV network,” Seo said.
If you can look past the interpersonal drama between Charles and Westbrook, what’s beyond the hill is money, and lots of it.
Charles has amassed millions of dollars from his YouTube channel and subsequent brand deals. According to Influencer Marketing Hub, if Charles’ apology video was monetized, he could have made more than $80,000 from it.
But as YouTube turns toward more traditional content creators, YouTubers are feeling like they can’t make the same money they used to from views alone and are starting to move toward brand deals. At the same time, brands have recognized the power of using influencers.
“Influencers have become a line item across all marketing budgets,” Subramanian said, adding that “YouTube has by far the strongest community across any platform.”
Influencers like Jeffree Star can review a makeup primer, and hours after uploading the video the product will sell out at Ulta Beauty. Star started his own brand and business, which he’s claimed has earned him north of a $100 million — and it’s Kylie Jenner who is the richest member of her family, because of her billion-dollar makeup company.
As malls struggle to survive and some retailers are eschewing them all together, Morphe, a beauty brand built on YouTube sponsorships, is opening up brick and mortar stores in malls across the country. The company often pays stars such as Charles and Star to attend the openings, drawing thousands of devotees. “We shut down the entire mall,” Star declared in a video he made about one Morphe opening.
But as the Westbrook/Charles kerfuffle showed, pairing up with influencers can be a bit trickier than a more traditional ad buy.
“It’s probably the most complicated paid media execution," said Dave Dickman, CEO of Tagger Media, which works with companies to maximize influencer activations. “It’s risky when you hire a super influencer,” like Charles, he said. “If things go sideways, it can potentially get negative."
Still, Dickman said even if the internet turned against Charles and he lost millions of subscribers, he is still racking up views, (and has 13 million followers to spare). YouTubers get caught up in drama all the time, then they make a teary apology video, and rack up views. Big brands might be hesitant to endorse Charles now, but more views on his Westbrook apology could mean more money.
In the end, experts think all this drama is mostly just good advertising for all involved.