How doubling its digital media spend has transformed L’Oréal's marketing approach

Is there any stopping the rise of digital media?

In 2013, the A/NZ operation of global beauty company, L’Oréal, was spending less than 15 per cent of its media budget on digital. Fast forward to 2016, and that has doubled to 30 per cent.

It is a story repeated among numerous big spenders in traditional media markets. And it mirrors the accelerating growth of online advertising in Australia, which according to the IAB/PWC Online Advertising Expenditure Report, hit $6.8 billion in for the year to June 30 2016. This was up 29.7 per cent over the previous 12 months, and the fastest growth rate recorded since the report’s inception.

According to L’Oréal’s head of digital and media for A/NZ, Christophe Eymery, while television still plays the dominant role in its media mix, today L’Oréal’s digital spend would be on par or possibly above the market average.

“It has been a big shift,” he says. “And to achieve that, it was not about just changing the media mix. We also changed internal team structures, making sure we had more expertise in-house, and made sure we were growing the expertise externally through our creative and media agency partners. We have also had a very big focus on digital education across the board.”

That includes an annual offsite meeting that brings staff together across all functions to align around the company’s digital objectives. L’Oréal also hosts forums on a monthly basis that provide opportunities for marketers and sales teams to be trained on specific areas of digital.

Eymery expects the shift to digital to continue, although he sees an opportunity to improve tracking the ROI of that media shift.

“Today, we know that when we go big on TV we have an almost immediate impact on sales,”
he says. “At the moment, we are working to try to understand how large activation and media activities in the social or broader digital media environment are impacting on sales.

“There is 50 years’ of history leveraging TV and other more traditional media channels. You only have roughly 10 years’ experience on the digital side, and it is only for the past two to three years that we’ve reached a scale where you can really see if it has meaningful impact on sales. We are in the early days to draw that correlation and have a full understanding of the effectiveness of those channels.”

L’Oréal’s digital activity focuses around digital video, search and social engagement, and complements an emerging ecommerce capability developed around the Salesforce Commerce Cloud (formerly Demandware). Eymery says it has also taken a significant rethink for the company’s brands to adapt from servicing markets to servicing individuals.

“We try to have a dual approach, in terms of having a mass connection, but at the same having time more and more personalised communication to consumers,” Eymery says. “That is where platforms such as Salesforce help us, because we have an opportunity to, at mass, define a more tailored message.

“Once you start to have one-on-one conversations with consumers, then you understand the journey they go on, from opening an EDM to ultimately purchasing a product. Then we can be more informed in the messaging. So having the centralisation of the communication, timing and messaging within the Salesforce platform really helps to have a more informed communication over time.”

Socially aware

Given the company’s focus on mass audience, it is not surprising one of its key social properties is Facebook. But despite two years’ of engagement, Eymery says there is still much for L’Oréal to learn.

“Our business really needs to understand and better harness this powerful platform to engage with consumers,” he says. “Where we are privileged is beauty is naturally a category that is of appeal and interest for consumers. At the same time, it is still a challenge to deploy the most relevant creative in the platform to drive engagement.

“We operate a lot in that [social] platform, but it is still a work in progress to deliver the best creative and the most engaging executions in these environments.”

Pursuing mass audiences through social channels has also seen L’Oréal focus on Instagram, working with local and global influencers to create content.

“It is a very visual platform, and when it comes to beauty it is often a very visual experience,” Eymery says. “It’s really suited to our business and how we need to engage with consumers.”

The company has also begun to experiment with Snapchat for its Maybelline brand. “We are approaching it as a test-and-learn ground,” Eymery says. “We want to really make sure we have the right messaging in this channel, which is different to what we do in Instagram, Twitter or Facebook.”

A benefit of the social strategy is that it enables L’Oréal to target specific audiences that would be harder to reach through mass media. One group of focus is Chinese tourists and expats, whom Eymery says are a strong and growing market segment in Australia for its luxury division.

“It is a very significant market niche, and so we are focusing more and more on WeChat, which is the dominant social media platform for this community,” he says. “For that, we collaborate a lot with our Chinese counterparts to make sure that we utilise this channel the best way, and we are also working with specialist agencies for that channel.”

It is a long way to come for a company that three years ago was fearful of engaging through social because of a perceived lack of resources to manage social communities. According to Eymery, one of the key realisations is that engaging through social is a two-way relationship.

“Ii is relatively new for us, but we are moving step by step, and the intention is to deliver a better experience for the consumers,” Eymery adds. “To achieve that, we really need to acknowledge the information that consumers are happy to share with us, and use that intelligence to tailor our messaging to them and be more targeted in terms of timing of engagement as well.”

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