Five years ago, two brothers Ari and David Goldberg founded a fashion media startup with a few friends. Today that company, StyleCaster, has grown to 7 million unique monthly visitors, up from 2.5 million last May and its revenue has doubled over the past twelve months.
Thirty percent of that revenue is coming from a source StyleCaster didn't have last year. But like many of today's digital media companies, which face low CPMs brought on by advertisers' affinity for programmatic buying, it had to reinvent its business model if it wanted to survive.
Last summer, StyleCaster's founders and management team gathered to discuss the company's future and explore its competitive advantage. They determined that the fashion media landscape was full of older private companies that act like public companies, such as Hearst and Conde Nast, and scrappier digital media companies such as Glam and Refinery29.
While StyleCaster was good at creating branded content for advertisers, the executives decided that wasn't enough to make the company flourish anymore. Advertisers were after engagement, not pageviews, so Stylecaster decided to buy a company that would help it meet the demand.
In September, StyleCaster purchased a ten-year-old company, Makeover Solutions, which was generating millions of dollars in revenue and was profitable. Acquiring Makeover Solutions has given StyleCaster the ability improve its offerings to advertisers and create an entirely new SaaS revenue stream.
Makeover Solutions is a tool that publishers or brands can implement on their websites with a snippet of code. There's a small set up fee for brands (not publishers) and then the companies pay to host the customized experiences. Users can interact with the widgets by uploading photos of themselves and "trying on" beauty products via interactive images. Ari Goldberg, StyleCaster's CEO, says the widgets increase traffic for publishers 847% and users are 60% more likely to click-through and purchase products. Users also up their time spent on the publishers' sites by an average of 12 minutes.
StyleCaster is also able to brand Makeover Solutions' widgets and put them on StyleCaster.com when its direct sales team gets Requests for Proposals (RFPs).
Ultimately, StyleCaster doesn't want to be known as a media company. Instead, it wants to be the go-to source of data for beauty brands. It collects all types of information about users – from their eye color to skin tone to age – as well as which websites yield the best engagement via the Makeover Solutions widgets.
"What Dave and I have done is position us to be a data business," says Goldberg. "We're going to be building a ComScore for beauty. If I'm a brand or retailer looking to reach beauty consumers, we're going to have the most thorough, robust beauty data out there. We have real-world actionable digestible data, and we want to be able to provide that to brands and retailers and advertisers."
Here's an example of a Makeover Solutions widget on COVERGIRL's site, powered by StyleCaster:
Here are a few widget COVERGIRL has implemented from Makeover Solutions:
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