L'Oréal Set to Shift Ad Dollars Online

19 February 2007

PARIS: L'Oréal is to shift a sizeable part of its advertising budget from traditional media to online. The French-headquartered beauty and cosmetics giant, whose brands include Lancôme and Maybelline, also announced a rise in profits last year of 4.5%.

The company spent €4.78 billion ($6.28bn; £3.21bn) on advertising in 2006, a hike of 9.5% over the previous twelve months. Net profit rose to €2.06bn.

Commented Patrick Rabain, head of the consumer-products division: "We are, of course, changing the way we spend our money on advertising. Typically for the retail consumer division we used to spend something like 75% on TV, 20% or more on print and the rest on billboards, etc."

He added: "We will move away from the traditional media spend, but we are being careful because you have to be sure you are being more efficient. It's quite clear ... things are changing."

Last year's launch of a new men's fragrance for the Cacharel brand eschewed traditional marketing channels in favor of heavy promotion via a blog.

Some analysts believe the company's profit growth was held back by higher marketing spend in the second half of 2006 and that top-line growth should have been higher.

Data sourced from Wall Street Journal Online; additional content by WARC staff