L'Oréal now handles 20% of its ad buying in house, and it's another sign of the growing threat to traditional advertising agencies

  • L'Oréal has taken greater control of its ad media-buying over the years, with its own programmatic trading desks, its global chief digital officer Lubomira Rochet said.
  • L'Oréal still uses agencies — but today, its trading desks manage up to 20% of its budget, she said.
  • It's also prioritizing platforms like Google and Rakuten as digital grows as a share of its media spend.
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With people shopping more online, lots of brands are scrambling to increase their digital advertising — but L'Oréal says it's already ready.

That's because the makeup giant has begun doing more of its media buying itself with its programmatic trading desks, which now buy media across 10 of its top sales-driving countries, its global chief digital officer Lubomira Rochet said.

L'Oréal joins a number of brands that have been bringing more of their marketing in-house over the past few years to combat fraud in and get more transparency from digital media — a trend that's sped up amid the pandemic — making traditional agencies more dispensable than ever.

"Media on platforms — be it Google Search, YouTube, or Facebook — is about algorithms, and you're good in media execution if you understand the way the platform works, and [that] changes pretty much every six months," she said, speaking during a Digital Media Talk virtual event hosted by the company on Thursday.

L'Oréal now spends more than 62% of its media budget in digital channels, up from 49% last year. It's also spending more on e-commerce advertising on platforms like Amazon; in SEO marketing to drive people to its own websites; and on ad formats like YouTube for Action. It anticipates that 50% of its sales will come from e-commerce by 2023.

L'Oréal still uses agencies — but today, its trading desks manage up to 20% of its budget, Rochet said. It also has an internal tool called "Cockpit" that monitors its entire ad performance in real-time to make sure they're driving results.

"With the level of expertise on our side, it puts us on par with our agency [and] creates a good constructive and challenging relationship so that we can really make the most of our media investment."

L'Oréal is also doing more with platforms like Google and Rakuten in areas beyond advertising that agencies specialize in, such as a deal to integrate its virtual try-on technology ModiFace with YouTube and Google Search, Rochet said.

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