1. L'Oreal experiments with new marketing mix*
Reuters. February 2007
L'Oreal, one of the world's biggest advertising spenders, is slowly moving its huge
promotional budget away from traditional media but said on Thursday markets should not
expect any quick dramatic shift.
The cosmetics giant whose adverts for Maybelline make-up, Elseve shampoos, Lancome
perfumes and other brands fill television screens and glossy magazine pages around the
world, said Internet spending remained for now proportionately low.
"We are of course changing the way we spend our money on advertising," Patrick Rabain,
head of the consumer products division told a conference with analysts and reporters on
the company's 2006 results.
"Typically for the retail consumer division we used to spend something like 75 percent on
TV, 20 percent or more on print and the rest on billboards, etc.," he said.
"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,"
he added.
L'Oreal's advertising and spending budget rose some 9.5 percent in 2006 to 4.783 billion
euros ($6.29 billion). A large chunk goes on point of sale promotional work rather than
adverts alone.
L'Oreal last year centralised its media buying in Europe to get more bang for its buck and is
looking at new media too.
"What we are doing is experimenting," Rabain said.
L'Oreal last year launched in France a men's fragrance for Cacharel, Amor pour Homme,
relying heavily on a blog to generate interest in the brand in order to save money, the
company said.
It said the web page generated more than 2 million visits and the perfume was able to
capture more than half a percentage point of the French market -- one of the world's most
competitive -- in a matter of months.
Rabain told Reuters after the results presentation: "We do still spend very little on Internet
(advertising), something like 1 percent. Maybe next year it will be 2 percent."
The founders of Skype recently launched a new Internet television start up called Joost
which they said had attracted interest from advertisers including L'Oreal's Maybelline.
Rabain declined to discuss what other initiatives L'Oreal may be planning.
*Marketing mix: Product / Price / Place / Promotion