In the theater in the early twentieth century, in order to get the necessary intensity of color and texture in front of the stage lights (much like stage makeup today, which looks like everyday makeup but with much stronger coloring and contouring), performers typically used greasepaint: a literal mixture of grease/lard and paint pigments, blended to match skin tones, in sticks and pots. The earliest film actors also used it, because it's what was available!

For film, though, it was less than ideal, as it looked cakey from the closer viewpoint of the camera and couldn't hold up under the hot lights for the many hours an actor would be required to work at a stretch. In response, Max Factor developed "Supreme Greasepaint" in 1914 - a variety of paint that was more cream than grease, and correspondingly held up better over long periods of time, with a better and more flexible finish.

The name "Max Factor" became quite famous as a result of this innovation, which led to his Los Angeles store becoming a site where you could always find movie stars shopping. At the time, there were no makeup artists in trailers - the actors did their own makeup, as they had in the theater, or else went to Max specifically to be made up. He would also introduce the eyebrow pencil and eyeshadow in 1916, and standardized palettes for different complexions/hair colors soon after, which made it easier for him to make up customers and for customers to know which products to purchase themselves. (That said, people have claimed that he invented the concept of matching colors and complexions, and it's not really the case. You can find plenty of nineteenth century advice for blondes, brunettes, fair complexions, dark complexions, etc. for matching their clothes or hats or ribbons. Factor was innovative in commercializing and standardizing it.)

Initially, silent cinematographers used orthochromatic film, a type of film that was most sensitive to blues and least sensitive to reds. This meant that the makeup couldn't simply be what would make an actor look healthier or more attractive in real life - red rouge or lipstick would come out as black, and a pink-toned complexion would look very dark. Generally, a more yellow-toned greasepaint would be used as foundation in order to achieve something that looked "normal" on film, with blues and purples sometimes used for highlights. Over the 1920s, however, movie-makers shifted to panchromatic film, which was more evenly sensitive and showed more detail, which prompted a shift to cosmetic colors that closely mimicked, well, reality. Factor's Panchromatic line was developed specifically for this new type of film - a thinner formula with ingredients that reduced shine. By this point, colors would be used as you might expect them to be today.