L’Oreal Puts Digital Media in Play

Cosmetic Giant L’Oreal has put its digital media account in play, which is currently at Moxie.

The reason given for this very public enticement to other agencies is that L’Oreal is looking to see if they can get greater ROI on their rising digital spending.

Envisage Agency were not only surprised by this move, but we were kind of expecting it to be a bit of a trend in the coming years, especially with bigger companies with wide strategic needs as L’Oreal.

Why? Expect companies that have varied needs to look for greater engagement in the digital sphere because it shows not only brand awareness but that their choices are building brand loyalty.

You might be reading this and thinking, “Ok but that is a leap.” And yes it is. But think if you were the head of L’Oreal’s account, what would you be looking for your digital account money to be achieving?

Yep. Brand awareness with the proper strategy should naturally lead to greater brand loyalty. A loyalty that digital engagement should be able to reflect.

Here’s an article by Jack Neff from Adage:

L’Oreal Puts U.S. Digital Media Up for Review

Beauty Giant Reaches Out Beyond Incumbent Agency Moxie, Owned by Publicis Groupe

L’Oreal is putting its U.S. digital-media planning and buying account, currently handled by Publicis Groupe’s Moxie, up for review. The move comes as the giant beauty marketer examines the return-on-investment its getting from digital spending, which has jumped rapidly in recent years.

Atlanta-based Moxie, which has worked on the business for three years, will defend the account. L’Oreal is reaching out to several other shops with a request-for-proposal and will identify participants later this week, said Marc Speichert, the company’s chief marketing officer for the Americas.

Although news of the review comes on the heels of Publicis Groupe’s proposed merger with Omnicom, the deal didn’t play a role in the decision to call the review, Mr. Speichert said. Another M&A-related wrinkle for Moxie came last week with the announcement that Publicis is acquiring Engauge, and that shop and Moxie are both part of a rollup of agencies under Publicis Groupe media agency Zenith.

L’Oreal spent only $17 million of its $1.5 billion in measured media on internet display last year, down 31%, according to Kantar Media. But that doesn’t include such things as video, search, social media and content marketing, all of which have been growing for the company in the U.S., Mr. Speichert said.

Digital spending has grown by double-digit percentages annually since he became U.S. CMO in 2010 and more than doubled overall, Mr. Speichert said.

Digital isn’t up to the 25%-35% of marketing that Procter & Gamble Co. Chairman-CEO A.G. Lafley recently said his company is spending in the U.S., Mr. Speichert said, “but we’re certainly significantly higher than we were three years ago, and that will continue as we go into 2014.”

Mr. Speichert noted L’Oreal also has ramped up TV and print spending. Overall, L’Oreal grew spending more than 20% from 2009 to 2012 to $2.2 billion, rising from No. 9 to No. 7 among U.S. advertisers, according to the Advertising Age Datacenter.

The review is “really to make sure we put our best foot forward” while thinking about the next phase of digital marketing at Loreal, he said. Print also has “been working very hard for us,” Mr. Speichert said, adding that the review is “also about seeing how TV and print are digitizing and those opportunities as well.”

Marketing-mix modeling has allowed L’Oreal to look at ROI “on a very granular level” in recent years, he said, showing, for example, that some digital video buys are performing well and others “have room for improvement.”

L’Oreal also has generally gotten strong results from search, Mr. Speichert said. And it’s been doing real-time bidding for other online media via Moxie, a function that also will be part of this review. Retailers, such has Walmart.com, have become “media platforms in themselves,” he said, accounting for much of L’Oreal’s display spending. He said L’Oreal has been increasing spending in all areas of digital and getting generally results that are consistent across brands.

In social media, the partnership between Lancome and video beauty blogger Michelle Phan launched in 2010 recently spawned a new L’Oreal cosmetics line, EM Michelle Phan, to be sold mainly through e-commerce but also through a standalone store in New York.

Moxie won L’Oreal’s first digital media planning and buying review in 2011, shortly after Mr. Speichert was named the company’s first U.S. CMO.

Though the review covers only the U.S., Mr. Speichert recently has taken on duties more broadly as CMO for the Americas overseeing the work of chief marketers in such countries as Brazil, Mexico and Canada.

His added duties dovetail with a broader L’Oreal restructuring that has seen his boss, Frederic Roze, exec-VP Americas similarly take on duties across the Americas and L’Oreal’s top global marketer, Marc Menesguen, become president of the global consumer products division.