L'Oréal targets US shoppers

22 February 2011

NEW YORK: L'Oréal, the cosmetics giant, is placing the US at the heart of its efforts to reach 1bn new consumers by 2020.

In a bid to achieve such a goal, and as part of a wider reorganisation covering the corporation's communications division, L'Oréal appointed its first global and local chief marketing officers.

Marc Speichert assumed responsibility for this role in the US last April, and is optimistic about the firm's prospects.

"The US is a huge growth engine for the company," he told Advertising Age. "It's one of the very few developed countries that has a really big share to contribute toward the billion consumers."

Speichert is charged with promoting active cosmetics, consumer, luxury and professional products, and argued "big growth bets" will be essential.

"In that capacity, you need to look at it universally. You need to look at those synergies where they exist and make sure there's the least amount of overlap between the brands and initiatives we're doing," he said.

While the recession caused many organisations to trim their marketing and innovation outlay, L'Oréal pursued alternative tactics.

"We continued to aggressively spend media specifically. We're now seeing a very nice kind of return on that investment," said Speichert. "We very aggressively continue to spend on R&D as well, so a lot of the products that we are launching right now were fine-tuned in those tougher years."

Print media, especially magazines, have typically generated considerable income from cosmetics, perfume and other brands keen to engage female shoppers, and Speichert stated this has delivered sustainable results.

"It's definitely going to continue to be a key medium for us. We've been able to show a relationship with print that's just very unique as far as beauty's concerned," he said.

In reflection of the changing climate facing publishers, L'Oréal has utilised iAd, Apple's advertising system for the iPhone, and further new media tools.

"We've definitely increased our spending in print, and so the digital spend didn't come at the detriment of print," Speichert said.

More broadly, the company has partnered with Michelle Phan, who rose to prominence on YouTube for her easy and effective make-up video guides.

Having long employed high-profile celebrities within marketing campaigns, L'Oréal believes this can broaden its appeal, as demonstrated by the fact each clip Phan produces for Lancome secures upwards of 2m hits.

"It's the new way of leveraging an endorser … and it's very authentic in a very approachable way that reaches a whole new set of consumers," said Speichert.

In keeping with such a shift, the multinational also runs a dedicated YouTube channel, Destination Beauty, drawing together similar content.

Speichert suggested the "paid", "owned" and "earned" media model is adopting a shape first identified by McKinsey.

This means adding "sold" media, when brands own media outlets, and "hijacked" media, when netizens spread negative word of mouth, something Destination Beauty hopes to avoid.

"That's an example of where we are creating a media platform, and obviously the challenge is: how do you make sure you manage that community and that channel in the proper way so that you don't get hijacked?" said Speichert.

Data sourced from AdAge; additional content by Warc staff