L'Oréal`s three advertising pillars

25 August

The Chief Digital Director, the Bulgarian Lubomira Rochet, tells “Capital” about the new advertising strategy of the cosmetics giant.

 

"At present, 8% of our revenue comes from e-commerce, and we expect it to reach 10% soon"

Born in a Bulgarian family Lubomira Rochet starts her career in L'Oréal Paris in 2014 as Chief Digital Director and Executive Committee Member in the company. Before starting her career in the cosmetics giant, she has been a Managing Director of the digital agency Valtech, where she has been responsible for Southern Europe markets. By 2010 she has managed Microsoft's start-up ecosystem by establishing relationships with young companies.

Rochet graduated in Economics and Social Sciences at one of the most prestigious universities in France, École normale supérieure (ENS) and then she got Master's Degree in Economics at the College of Europe. She also has a Master's Degree in Public Relations from the French University of Sciences Po, as well as an Economics degree from the University of California, Berkeley.

 

Few people know that the global digital link of L'Oréal Paris, the largest cosmetic company in the world, is run by a Bulgarian manager. Lubomira Rochet holds the position Chief Digital Director and Executive Committee Member in the company. Her management is dpread over some of the major cosmetic brands including Lancôme, Yves Saint Laurent, Garnier, La Roche-Posay, Vichy, The Body Shop and Maybelline. For four years since Rochet has been appointed to be the leader of L'Oréal digital innovation, the group significantly increased its investment in the sphere and changed its entire marketing model, focusing on e-commerce, opinion leaders, mobile ad formats, and acquisition of technology launches .

The native Bulgarian Lyubomira Rochet was speaker at the annual DigitalK digital conference, organized by "Capital" in partnership with NEVEQ and LAUNCHub.

Digital transformation

In an effort by L'Oréal Paris to respond to users' new habits in the digital environment, the company completely changed its online strategy based on three pillars. The first is to boost e-commerce, as Lyubomira Rochet says it is performed through partners as Amazon, Alibaba and other online platforms. "At present, 8% of our revenue comes from e-commerce, and we expect it to reach 10% soon," she told “Capital”.

The second important step towards change is the digital advertising, its share in the media mix for the past year is reaching 38%. The expectations are in 2018 L'Oréal to invest over 40% of its budget in online communication, with approximately 65% being purchased through programming technology.

The third pillar in the cosmetics company’s advertising strategy is the content marketing and opinion leaders’ marketing. "We know people trust opinion leaders, they are very authoritative in our industry, we think we've been able to embed digital models in the company and now we are in the second transformation phase, which is focused on inventing new ways to improving customer experience, through technology as an added reality", explains Rochet.

The cosmetics giant pays great attention to brand security and protection of their reputation in the digital transformation it is passing through. "We are very cautious when we use a programmer. We can precisely target audiences to make sure we're sending the exact advertising message to the right user. The disadvantages are you may find yourself in poor quality inventory, fake sites or unreal impressions", says Lubomira Rochet. In order to secure its ads, the company works mainly with Google and Facebook inventory, reducing the amount of ad positions at the expense of better quality". Our goal is not to pay less, but to have good positioning and targeting, so sometimes we pay more. We also trust third independent companies to measure the level of fraud", she states.

Fast consumption formats

The changes in L'Oréal are mainly caused by the new habits of their customers, who are already looking for product information mainly online, reviewing multiple opinions and making an informed decision. "In our industry, between the moment you want to buy a face cream and the moment you buy it, you do an average 32 actions, most of them online" says the company's Chief Digital Director. She states the users` approach starts with Google, goes through YouTube videos, Instagram opinion leaders' profiles, and reviews. "All the time our brand and products have to be anywhere along the way so there's a huge increase in the amount of content we need to produce, and in the number of formats according to the social network or websites we're positioning in", says Rochet.

According to her, online content is for fast user consumption, for people who do not stay long on a particular post. "We tell that to the company that our pitch (ad slang for competition) in Facebook to the user is 2 seconds, and 6 seconds is the new long format - we do not advertise more than that time. In Google we use the so-called bumper ads (6-second video format)", says the Digital Director.

L'Oréal's brands also rely on native formats, gif, boomerang, Instagram and Facebook stories, added reality through Facebook and Snapchat filters. An important rule for the company is that the product and brand are positioned within the first 3 ad seconds to make sure that even switching, users will have seen at least them.

Rochet states that video is a major part of L'Oréal's investment in online advertising with good return of investment. At the same time, more than half (55%) of L'Oréal's traffic comes from mobile devices all over the world. In Asia it exceeds 85%.

The new technologies

The French giant is focused on new technologies and innovations in cosmetics, and the focus on its development is the usage of the added reality technology (AR). For that purpouse, L'Oréal bought the technology-based startup ModiFace earlier this year, which develops 3D virtual beauty technologies and artificial skin intelligence products. Together with ModiFace, the group developed Style My Hair - mobile application, allowing users to see themselves with a different hair color.

L'Oréal also became the official Station F sponsor - world's largest startup campus in January. The goal of the group is to support 20 cosmetics startups per year.

"CRM (Customer Relationship Management) activities are also very important for us because we want to have a personalized relationship with each user. Machine learning is also an important technology for the company to optimize processes especially when we buy inventory in the media", she adds.

Media forecasts

Despite the steadily rising L'Oréal’s online advertising budget, over 56% of the media mix in Asia, and nearly 50% in the US, Rochet does not think the largest competitive channel - TV - will disappear. She predicts TV advertising will also be digitized, and programming technology will also get in there to result in much more accurate targeting.

"Amazon is likely to change the market too. 55% of the online product demand is emerging in Amazon", considers Lyubomira Rochet. Amazon Media Group is currently the most profitable company in the market. In her view, however, whatever changes would happen in the market, they will be dictated by customers’ habits, because brands more than ever should strive to be as close as possible to the consumers.